The Ugly Truth: What the Drop in Unemployment Doesn’t Tell You.

ratrace

It’s the same game, only harder!

The truth is out.  We are living in a time when a shocking four out of 5 U.S. adults will struggle with joblessness or poverty.  This revelation not only flies directly in the face of another drop in unemployment, but reconfirms what many of us had already known, we’re in trouble.

If you find yourself looking for a job, you’re in an over-crowded market where the young and educated are relegated to jobs well below their intellectual station. This is due in part to the heavy competition at the of the top of the job market among the highly-skilled.  Basically, those left out of the jobs they really want are knocked down a peg, creating what Economist Paul Beaudry calls “cascading.”  The top pushes down on the middle and the middle pushes down on the bottom, burying those who are most vulnerable and under-qualified.

This phenomenon stems from what’s been deemed  The Great Reversal.”  That is, there used to be an over-abundance of high-paying jobs that required skill, intellectual capital and education, but now there just aren’t.  In fact, demand for those types of jobs peaked all the way back in the year 2000.  That’s right, even with all this talk of a “skills gap,” the need for high-skill jobs actually stopped growing 13 years ago.

xzhibit

In light of these findings, we must rethink our attitude toward education.  From the time we can speak we’re taught that a college degree leads directly to stability and comfort, but clearly that’s no longer true.  Yet we are certainly continuing to operate under that assumption, considering there are more people attending college than ever before.  So what do we do, stop going to school?  That’s not the answer either.  You’re still (usually) in more trouble if you have less education. 

You're still (usually) better off with more education.

You’re still (usually) better off with more education.

If you’re looking for a silver lining, good luck.  (if you listened to the Freakonomics link above, you’ll know what I’m talking about).  Times are just different now. The days when a college degree alone meant stability may be fading fast in the rear-view, but if we look down the road, where are we headed? The answer is a bit murky because it’s somewhere we haven’t been before, but we can certainly take hints from what’s on the horizon and what’s all around us, technology.

Regardless of how many companies are hiring, technology will only become more ubiquitous, leading to an untold level of symbiosis between it and the humans that rely on it.  Right now, we typically think of tech savvy people as having a leg up when you’re looking for a job, but the truth is, if you want to succeed in the future you’ll need it.  Paradigm shifting technologies will create, destroy and augment entire industries, just as they have before.  This type of change and instability always leads to tremendous opportunities for those who keep their knowledge and skills up to date, or better yet, a step ahead.

Conjecture about the future aside, let’s not forget there was also a time when mastering a skill alone was enough to make a comfortable living.  Sure, an untold number blacksmiths and data company engineers found themselves out in the street after the industrial and PC revolutions, but some individuals and companies managed to not only escape obsolescence, but adapt and flourish.

Unlike their contemporaries, IBM managed to (narrowly) survive the PC revolution.

Unlike their contemporaries, IBM managed to (narrowly) survive the PC revolution and achieve explosive success.

One thing is for sure; a passive approach is not the answer.  We can’t sit around wondering when it’s going to get better.  We must be proactive, self-reliant and adaptable, yet specialized in a particular area.  If we are to thrive in this new paradigm where nearly everyone struggles, we certainly cannot count on traditional power structures or degrees to prop us up or keep us afloat (just look at the mess that Spain and Greece find themselves in).  For our generation, there’s no factory job to fall back on and there’s no safety net waiting to catch us when we retire. We must simply adapt to a new reality, and not lose sleep over the fact that things are different now.  If we want to be rewarded, we must stay hungry (figuratively) and forward-thinking.

(Originally posted on midwestreal.net follow us on twitter @midwestreal and @midwestmike__)

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  • Haystack

    It always frustrates me when people who came of age during the 60’s – 80’s condescendingly tell you that if you’re not making enough, it must be because you’re not doing something (working harder, learning new skills, whatever.) That is, “it was easy for me in 1973, so if it’s not easy for you, it must be because you’re lazy.”

    The older, economically comfortable generation still haven’t figured out that the stuff that worked when they were young doesn’t work so well now. Good jobs are in much shorter supply. Education is undervalued, but far more expensive. Wages are not keeping pace with inflation.

    But I like the thrust of this article. It’s time to explore new ways. We just can’t expect help to come from the generation running the go’vt, because they still don’t get that the world has changed.

    • Ted Heistman

      Yeah, that’s so true! You used to be able to go from high school to IBM and live a middle class lifestyle and then retire with a pension.

      • alizardx

        Engineered social change sucks when the the people who are doing the engineering are incompetent and don’t like you.

        Aristocracies who want to pass on their wealth and position intact to their kids invest in whatever makes for social stability. In post WWII America, this was infrastructure, education, jobs in America.

        They decided that buying social stability was too expensive and cut too much into the rate of growth of their bank accounts. So infrastructure is allowed to crumble, jobs get shipped out, and money to education not for their own kids gets cut back. They try to keep the lid on with information control and repression.

        History shows the outcome of decisions like that.

    • Bo

      David Foot PhD at Harvard , 1990, University of Toronto , “Completely Predictable People” :”The lucky few men who were born
      then(1920-30) are now running our corporations, universities ,civil services,
      and governments. They seem to think their success is based entirely on their
      merit . First, Depression babies were too young to go war so they watched from
      sideline while the group just ahead of them got decimated. They entered to work
      force during the boom of the ‘50s when anyone with a pulse and grey flannel
      suit could soar up the corporate ladder . They bought a big house in the
      suburbs for peanuts , and traded in their big cars every year. Now they sit
      on their lofty perches bemoaning
      the fact that their kids haven’t had the spunk to do as well as they have”

  • Chugs Rodiguez

    Maybe the solution is to move to countries where there are skills gaps?

    • BuzzCoastin

      Mars?

      • InAwe

        of course. where else :)

        • Bo

          David Foot PhD at Harvard , University of Toronto ,1990 , “Completely Predictable People” :”The lucky few men who were born
          then(1920-30) are now running our corporations, universities ,civil services,
          and governments. They seem to think their success is based entirely on their
          merit . First, Depression babies were too young to go war so they watched from
          sideline while the group just ahead of them got decimated. They entered to work
          force during the boom of the ‘50s when anyone with a pulse and grey flannel
          suit could soar up the corporate ladder . They bought a big house in the
          suburbs for peanuts , and traded in their big cars every year. Now they sit
          on their lofty perches bemoaning
          the fact that their kids haven’t had the spunk to do as well as they have”

      • Chugs Rodiguez

        If we had Project Orion (nuclear pulse engine) tech then sure.

        But seriously there are heaps of countries running low unemployment rates – take Australia, almost parity (and in some months valued over) the US dollar, low interest rates and is running 5% unemployment.

        Beaches are great, beer is cold (and far better then the slop in the US), drugs are plentiful and the music is pretty good.

        • BuzzCoastin

          Australia’s jobless problem, as its mining boom winds down, is a major issue heading into elections on Sept. 7.

          True, unemployment in June stayed flat at 5.7%, according to statistics released Thursday. But that was a result of fewer people looking for work, not a rise in employment. The number of those employed fell 10,200 in the month, most of them full time positions.
          http://blogs.wsj.com/economics/2013/08/08/australian-unemployment-big-issue-in-elections/

          jobs are not the answer
          there are no more “real” jobs to be had
          even now machines are replacing people in all walks of life
          except government

  • Ted Heistman

    We have to create a new economy that cuts the old one out of the loop.

    • BuzzCoastin

      there are ways out
      unfortunately it requires thinking outside the box’s box
      a willingness to tolerate the unknown
      for what seems like long periods of time at the time
      and being able to gnaw off the connection to normality
      that shackles most peoples minds

    • InAwe

      yes. and it has to be set up in parallel to the existing. The end goal of course is to remove any dependency on the current pathetic system completely.
      I was thinking..hypothetically of course…what if we could draw up a ‘new system’ plan – the entire thing. All of it…from methods of generating energy to figuring out a waste removal system for each ‘city’.
      Then we should be able to add up the costs – monetary and/or human skill. But that figure up on the internet and crowd-fund it till we have the resources at hand to make it happen.

      • Rhoid Rager

        In which fiat central-bank-owned fractional-reserve currency do you plan on divvying up the costs?

        • InAwe

          all or none? depends if other currencies come to play?

      • http://hormeticminds.blogspot.com/ Chaorder Gradient

        I smell a witch hunt brewing or is it a genocide, I don’t know anymore.

  • BuzzCoastin

    jobs have been passe since about 1990
    I had my last yob in 97
    if you don’t get creative, kick it freestyle & use a little magic
    you’re pretty much screwed
    especially if your trying to capture the aMerkin Dreamed

  • bobup

    “If we want to be rewarded, we must stay hungry…and forward thinking.”This reads like the most traditional of American metrics. It’s Ben Franklin. It’s Horatio Alger. If things go to crap, don’t get angry or indignant or throw up a barricade, just adapt and work really hard to get a leg up on the guy next to you. Out-compete them before they out-compete you. Competition being the most natural narrative in the world.

    • alizardx

      Compete with the kid whose mother knew the IBM CEO because they just happened to work on the same charity projects? (his name was BIll Gates) Compete for startup funding with alumni from Stanford and these schools? (guess where VCs generally went to college) http://minimaxir.com/2013/07/alma-mater-data/ (see also Silicon Valley meritocracy)

      Compete with the kids whose parents spent tens of thousands on coaching to get them into elite kindergartens? Outside the world of media propaganda designed to preserve faith in the system, the deck is sort of stacked against anyone born outside at least the upper middle class.

  • Rhoid Rager

    Time to start flipping things: a job is actually undesirable in the long term because it is wage slavery; it follows that the unemployment rate is a measure of progress towards mass realization of the nature of ‘a job’.

    • Ted Heistman

      like burgers?

      • Rhoid Rager

        Reality could just as easily be flipped as a burger.

  • rhetorics_killer

    The whole thing is same old stuff wrapped in new technophile vocabulary. It is common for youth today, or rather for those addressing the youth, to state: ‘things were much easier twenty to thirty years ago, now it is all crappy jobs, crappy diplomas and anxiety lurking around to ruin everyday’s mood; so change on, become a performer, try to get better and always try harder, otherwise..’ Of course change is good, and do things differently may let people imagine new ways of life. But now be sure, for every youth hearing this refrain, the same song was already being played thirty years ago. Actually since I was politically aware, by my early teens, this has always been the discourse: we live in a world full of changes, full of threats, a constant pressure upon our minds, compelling obedience and productivity gains, rather than the so-said ‘creativity’, initiative, etc. Mainstream media is a tool at the hands of the powerful. Every ‘awareness’ this thing produces is the quality those who govern want us to acquire. And their minds always care to give people a frightened ‘understanding’ of their lives. The world will always be taught as some weird and dangerous place to be, so better watch out your step, better be ‘creative’ the way power wants you to be.

    • Ted Heistman

      Collectively its just simply a fact that service industry jobs don’t pay as well as manufacturing jobs. And that the wages in service industry jobs have been stagnant. So the high paying jobs left and now the majority of people are forced into lower paying jobs.

      On an individual level, people are capable of almost anything. Lots of bright young entrepreneurs are starting successful businesses.

      But to say that everyone should start a successful business so then everyone would be rich is really confusing the issue. Its not going to happen. Everyone is not going to be a doctor or a lawyer either.

      I think Trader Joes is a good model in comparison to Walmart. What we need are other metrics to be valued besides efficiency. I think we need more human values injected into the economy, more conscious choices.

      Valuing efficiency and individual profits over all else is what got us here, IMO.

  • HanShan Tempel

    “Theres room at the top they are telling you still.
    But, first you must learn how to smile as you kill
    If you want to be like the folks on the hill.
    A working class hero is something to be.”

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