Thursday, February 11, 2010

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.


  1. I sadly have no better ideas, because I did what you suggested: married a Frenchman. As soon as my son from a previous marriage (my law school marriage) is grown, we are moving the entire family (hopefully including oldest son if he wants to go) back to the home country. We have about 8 years to go. Time enough for me to figure out what kind of job I can do there. (Hopefully just write briefs for American lawyers! God bless the Internet.)

    Sadly, hubby has no younger brothers for my more recently graduated friends. : (

    It's actually sad. I love America, I really do. It makes me sad to think of ending my years (a long time from now!) in a strange land where I'll never really speak the language or be "home" and if I do get a job there, it will probably be the kind of job my immigrant relatives did when they first came to America. But children have no future here. I can't imagine how much worse things are going to be for people just starting out in life 10-20 years from now. 75 years ago my people came HERE for a better life. Who'dve thunk it would come to this?

  2. Come on - have you lived in other countries??? Living in the U.S. in a recession is still better than living in some other countries. Trust me, I am a journalist and travel the world. You don't have to spend the next ten years unemployed or temping. There are plenty of jobs - you just have to get out of New York.

  3. This is Hardknock's post.. not mine. I don't think she lives in NYC. Soooooo... I'm sure she's looking in places other than NYC.

  4. I don't live in NYC but I think it would actually be easier for me to get a job in NYC than in Podunk where I currently live. At least in NYC there is a lot more temp work. Folks who don't have the good fortune of living in a big city with plenty of opportunities to hustle won't find a lot of part-time and temp jobs in a small town or a city hit hard by the recession.

    This is not an anti-USA post. It's just a reality that the unemployment rate here will remain high and maybe I'm more pessimistic than you are, anon, but I don't see anyone taking the lead to fix the situation. For people who don't have a job and health insurance it wouldn't be such a bad idea to consider moving to a nearby country like Canada where there is a good national health care system. Of course, it is very difficult to just up and move to another country nowadays. Usually you have to marry someone or have a unique skill to offer a foreign employer.

  5. Hardknocks is all about hard-hitting reality! I love the writing style. I agree with the depressing analysis - we are witnessing a fundamental re-structuring of the U.S. economy.

    I suppose the only practical solution I see is attending trade school, learning a skilled trade that requires the physical presence of a human being, and learning to live frugally. For those who just MUST go to college, should attend a community college for 2 years and then transfer to a cheap, in-state university.

    My impractical, totally-implausible solution is for everyone to descend on their respective statehouses and Congress and smash their elected officials' fingers and toes with a sledgehammer!

  6. I agree. I think this recession is going to last a very long time. I've always wanted to get a sleeve tattoo and I think I'm gonna finally do it.

    We really are going to have a lost decade

  7. You know, you have a lot of valid points - your first years are very important - but that does not mean that if you haven't established yourself by age 22-23 you are out of the running. My mother and my aunt were both immigrants and my mom didn't get her first "real" job until she was around 30 and now she's 55 and doing pretty well in consulting. My aunt didn't get her first good job until around 46 - around 10 years ago - and she moved up the line from lab technician to research director - basically coordinating clinical studies.

    One thing to note is that they are both in scientific careers - these may be more merit based than a typical business career.

    I do believe, however, that unemployment in your 20's creates a positive feedback cycle. Every month of unemployment has a corrosive effect on self confidence and job skills. My stutter came back! There's nothing to bolster my feelings of self worth like an emerging speech impediment.

  8. nice post. I posted my thoughts on this article in a long reply to the JDU thread on this article.

    I agree that the opportunity is overseas. However, some of that experience may not transfer back to the USA when you decide to move back

  9. Oh I don't think marriage is really that much of a problem, especially for unemployed men. Most women aren't exactly knocking doors down to marry men that are heavily in debt and in terrible jobs, that is a reality. Of course, that means that an entire generation will probably never have families, or start them very late, but that's a different, possibly more depressing problem, entirely. Studies show that about 90% of marriages where the wife is the higher earner end badly, because the wife doesn't respect the man and comes to resent him. I guess there is that 10%, google to find the studies if you care.

    The debt is really the major problem, not having a huge salary if you don't have the debt isn't the worst thing in the world.

  10. I blame Bill Clinton.

  11. Anon @11:10am, I agree that having a middle income salary is not so bad if you're doing something you enjoy and making enough to pay the bills and have a roof over your head. It's the debt that makes a middle income salary seem unlivable for a lot of students with six figure private loans (thank goodness I'm not one of those people). You're right, no one wants to marry someone heavily in debt. Getting married could mess up one's ability to qualify for the Income Based Repayment plan too.

  12. I agree with Nando. We are undergoing a fundamental restructuring. The rules are changing. Which makes the title of this blog more apropos than ever.

  13. The sense of entitlement oozing from this article is beyond disgusting. Millions of people in the United States were having their lives destroyed by poverty everyday long before the recession came around. Oh right, but because they weren’t born into middle class families and didn’t work really hard in school, those people deserve it.

    Now that it’s happening to you though, it’s an existential problem so severe you’re actually advocating moving to a different country. Jesus Christ. Where does this belief that you ever deserved middle class lifestyle come from? Is it because other people have it, or your parents have it, or you just really really want it? Well guess what, you don’t deserve anything. You’re not “worth” $30/hr or a six-figure job at a larger firm; you’re just another body in an ocean of humanity.

    How many people in the world live on less than $100/month? What are they worth, why are you different? If you wind up with a great job and lots of money, congratulations you win. But the fact that you believe that being born in the United States and attending school should “guarantee” you anything, let alone a six-figure career proves you’re too stupid or self-absorbed to be employable in the first place.

    Your suggestion about marrying a foreigner and leaving the US is a pipe dream. Foreign men from wealthy western countries in a position to marry foreigners are not gong to want 25-30 year old educated American women. Why, because they want wives not partners, and they will go to Thailand or the PI or anywhere else first because 99% of educated American women are toxic, and we all know it. I got some more bad news sweetheart, in the rest of the world, the women chase the men, and gorgeous 19 year old Asian girls are a dime a dozen.

    You’re lucky though because you have a vagina and will always be able to find some American dude to trap, allowing you to play the face-saving trump card of motherhood, keep your middle class existence, and never have to admit to yourself that you didn’t succeed.

  14. The Obama administration said a while back: If we don't pass the stimulus, unemployment will reach 10 percent.

  15. There are no guarantees in life, but that's not to say that we shouldn't be calling out the power brokers and charlatans who dominate the media, government, business and academia each day.

  16. What a great article. As the author of the analysis of Peck's article, learning a foreign language is an great idea. I speak English, Spanish, and Portguese (Brasilian) and plan to use these skills for seeking employment in South America, yet plan to retain my US citizenship. In my opinion, skills are more important than degrees.

  17. Some people will wait until the water is up to their necks to understand that the ship is sinking. The party's over boys and girls. Good night and good luck.

  18. Once again, as is the threads, comments and posts on other sites, boards, blogs and what not.....It seems that folks don't wish to address who are those that create, maintain and benefit from the current socio-economic set up. The elite, investor class who runs this country is hell bent on rendering all who are not they as useless. They are hell bent on destroying all who are not from their class and background. You know who they are and what they do. They are not faceless corporations. They are not the politicians but they own them. Including the formerly alleged "magic kneegrow" who is the current and very temporary occupant of the 'white' house. Funny and apropos name for that house.

    This country is going to hell in a handbasket because of the wickedly vile, racist, classist and elitist investor class (Its not P.C. to mention their ethnicities or religous backgrounds, but you know who they are) that have nothing but contempt for all who are not they. Face this fact and then try to work your way around it somehow.

  19. Oh, so THE JEWS are the reason I'm unemployed! Thanks for the heads up. I was raised Jewish, must have slept through that one class where they taught how to rule the world.

  20. You said it. Not me. But they are not the only ones. Their WASPy former overlords and current underlings also still figure in the equation although their influnce is waning. Along with their daughters, golden tokens and their gay sons and daughters among other minions.

    Not all jews and WASPS are members of the elite but most of the elite are either Wasps or their jewish overlords. The rest of the elite is comprised of the few golden tokens...i.e. Obama....and or their daughters and gay white or jewish underlings.

    Jews who are not elite are most unfortunate. It must be very painful to not be born behind the 8 ball of non-jewishness and yet still fail. Must not have been born with the normally inate ruthlessness, racism and classism.

    It does happen. They might have suffered from psuedo liberal guilt. Might be of hippy type free spirit born of guilt over the wickedness that so many have done. Or out of a misguided desire to secure goy approval in a deep seated notion of attempting to pre-empt the nazi like hate that so many no jews have shown towards them. Such liberal, hippy like free spirit is heavily frowned upon by the elite when it comes to treatment of the non elites.

    I actually feel pity for the failed jew. It must be really harder for them to be outcast like the typical black man or blue collar types. They were born to a superior class and yet they are cast among the untouchables. It can't be easy being born of that which usually puts one on 3rd base upon birth only to be sent to bench without an at bat. Like so many of the rest of us.

  21. anon @ 12:08AM: Please don't assume you know where I come from. If you bothered to read my last post on education you'll know that I was raised in a working class home (and that's being generous, my mother worked for minimum wage for most of her life). I and many thousands of other children from poor and working class families invested thousands of dollars into an education as a way to WORK our way into a middle class lifestyle. No one here expected to get handed a six figure paycheck. Go to another law blog if you want to lecture people on what it's like to experience poverty.

    anon@11:52AM: No one on this blog has ever blamed the Jews or any other ethnicity for the unemployment rate. Please go elsewhere with your ad hominem attacks.

  22. Dear 9:28 P.M.

    Die slowly and in great pain.


  23. I hope this is not to un P.C. for the censors here...But.....The article also points to an all too much ingnored aspect of the unemployment situation. The unemployment of straight, non elite, males. As they are now being marginalized, much in the way blacks have been historically, the unemployment of regular, manly man, non elite, straight males rises while mostly white and or jewish women and their male and female gay white allies' seem to be taking over the professional and work world.

    Soon enough, men will not be welcome in upper management anymore and they are already a minority in many middle management situations.

    To all the ladies out there: Who will you marry up to if you or your gay allies put all of the eligble men out of work? Who will you be able to trap into the grift a man scam known as marriage if men no longer are allowed to make a decent living? Who will pay your bills so that you can keep your money to yourselves? Will you marry down? Can you accept daddy daycare? Stay at home daddy? Is men being marginalized and or put out of the workplace what really suits your have your cake and have a man's cake too agenda? How can you achieve that agenda if there are no more men making more money than you or your gay allies?

  24. To the poster above, why don't you just accept that your life situation, whatever unfortunate circumstances that may entail, is really just your own fault, and blaming women, gays, Jews, etc., is really just an excuse for you to fail to admit to yourself and everyone else that you just aren't good enough. Period.

  25. Though one is responsible for one's behavior and efforts, one should not let the racist, classist, sexist, wicked and evil discriminatory acts of those who control most of society pass without mention. One should not ignore the devastating consequences that such acts can bring to them. One should not ignore the dreams, careers and lives that are often crushed as a result of those acts by the powers that be. See the world as it is and not as many of the fairer gender and their gay allies wish it would be. Know the true landscape of the world and then negoitate through it accordingly. Call a spade a spade. The wicked, the wicked. Not only is there nothing wrong for seeing power for what it is and calling it what it is, but, rather, for one to survive, it is incumbent upon a prudent one, in order to survive or excel, to deal with reality.

  26. Um, I'm not sure why the commenters have taken a turn like this on here. I hope the trend doesn't continue. I'd just like to add my honest reaction to this article, it depressed the hell out of me. I mean, truly made me more depressed than I already am. It essentially is saying I've ruined the rest of my life. I guess seeing my suspicions confirmed in print was just too much.



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