More Bad News: Unemployment Rate is Going to Remain High For a While

Read Dan Peck's article at the Atlantic titled, "How a New Jobless Era Will Transform America". That's right, folks. This is only the beginning of the jobless era, or what the New York Times columnist and economist Paul Krugman fears to be a lost decade, and it's gonna last for a long time. The first half of the article focuses on young people like us who are just beginning our careers or were laid off mid-career and whose lifetime earnings have been greatly diminished, as much as 25 percent in the first year of employment, compared to luckier graduates who get their jobs during boom times:

People who entered the workforce during the recession “didn’t switch jobs as much, and particularly for young workers, that’s how you increase wages,” Kahn told me. This behavior may have resulted from a lingering risk aversion, born of a tough start. But a lack of opportunities may have played a larger role, she said: when you’re forced to start work in a particularly low-level job or unsexy career, it’s easy for other employers to dismiss you as having low potential. Moving up, or moving on to something different and better, becomes more difficult.

“Graduates’ first jobs have an inordinate impact on their career path and [lifetime earnings],” wrote Austan Goolsbee, now a member of President Obama’s Council of Economic Advisers, in The New York Times in 2006. “People essentially cannot close the wage gap by working their way up the company hierarchy. While they may work their way up, the people who started above them do, too. They don’t catch up.” Recent research suggests that as much as two-thirds of real lifetime wage growth typically occurs in the first 10 years of a career. After that, as people start families and their career paths lengthen and solidify, jumping the tracks becomes harder.

Graduates in the unfortunate position of not being able to find work since they've left school understand that they are viewed as less marketable with every jobless month. You become so desperate that you apply to $10/hour jobs even when you're worth at least $30/hour in a good economy. If you're lucky enough to get a job with benefits you stay there for the next 5 years making $10-15/hour because the $30/hour job just isn't there. Your lifetime wage growth is thus completely ruined. You stay in your dead end administrative or temp job when you should really be making six figures at a larger corporation or firm, except now you're considered "overqualified" damaged goods. Your chances of getting the job you want is permanently destroyed. Unsurprisingly, this can lead to long lasting damage on one's mental and emotional health (let's not forget those six figure loans you took out to get a degree you thought would guarantee you a job that pays more than a fast-food worker).

Strong evidence suggests that people who don’t find solid roots in the job market within a year or two have a particularly hard time righting themselves. In part, that’s because many of them become different—and damaged—people. Krysia Mossakowski, a sociologist at the University of Miami, has found that in young adults, long bouts of unemployment provoke long-lasting changes in behavior and mental health. “Some people say, ‘Oh, well, they’re young, they’re in and out of the workforce, so unemployment shouldn’t matter much psychologically,’” Mossakowski told me. “But that isn’t true.”

Examining national longitudinal data, Mossakowski has found that people who were unemployed for long periods in their teens or early 20s are far more likely to develop a habit of heavy drinking (five or more drinks in one sitting) by the time they approach middle age. They are also more likely to develop depressive symptoms. Prior drinking behavior and psychological history do not explain these problems—they result from unemployment itself. And the problems are not limited to those who never find steady work; they show up quite strongly as well in people who are later working regularly.

The article goes on to discuss how this recession has affected graduates as well as lower-income families, minorities, and men laid off from their manufacturing jobs. I believe a significant percentage of our generation has been forever damaged by these lost years compounded by taking on thousands of dollars in debt because of misinformation about the value of higher education. The toll this recession will have on our own families when some of us have children while only just beginning our careers and paying off massive amounts of student loans is unthinkable. I also believe that the economic and social damage our children will have to fix will be a daunting task near impossible.

What is the solution? Even Krugman doesn't have an answer. This isn't just something we can fix in a few years and everything will be back to Clinton-era employment levels. Not. Gonna. Happen. This is only the beginning of a very long decline for the United States and we may never recover within the next two decades considering that the the two major political parties in Washington have no interest in real change to our nation's infrastructure, economy, education and health care system.

I'm sure many of you won't agree with me on this. My suggestion is if you don't want to spend the next 10-20 years unemployed or temping, learn a foreign language and a skill that is transferable anywhere in the world, then consider leaving the country if you can. If you refuse or can't because of family or financial reasons, be prepared to suffer for the foreseeable future. Hopefully some of you out there will have an idea to fix America or create a grassroots network of people in your community who will come up with solutions to local economic problems. But if you aren't willing to wait, the only solution I have is to marry a Canadian or someone from a country that will provide your children with better opportunities to obtain an affordable education and quality health care and leave until things get better. If anyone has better ideas feel free to list them in the comments below because I'd sure like to know how we can get out of this mess.