I have been very concerned of the rising tide of two kinds of unemployment: The college kids and the middle aged boomer. Two groups seemingly book ended on a dead end for financial security.
While one group is starting out with immense debts already acquired, the other is trying to maintain a lifestyle no longer affordable or attainable. Each see each others as enemies and rivals for the few jobs and wages available.
I have written about the group I call the Shadow People - those too young for Social Security/Medicare but too old to be desirable in the marketplace. This is due to a series of reasons I call "the over/under" phenomena - "over" experienced and too old to be "under" paid - people who still have "overwhelming" and immense skills, talents, and resources but cannot afford to work for subsistence "under" wages. In a country where most of the wealthiest are all over 50 its ironic to think that over 45 you somehow you become stagnant and useless, well unless you are wealthy then be 80 and people call you an "oracle".
I was listening to a interesting Australian Economist, Steve Keen, discuss the problems in our current economy on BBC America and he has some interesting real truths about our current global realities regarding this collapse. And one is simply we are heading to a long term decade or longer Depression if we don't start reducing debt - both on a micro and macro level. And we hear a lot "of eat our "peas" and "tighten belt" talks but in reality comparing the two types of economies is always challenging. But how Mr. Keen proposes this debt reduction is by a simple "write off" of debt on a massive level; this move would require the banks to take the loss. And across the board you can see in the US and Europe that has been the last tool in the equation. Everyone must suffer for the banks fraud, duplicity in greed, so much for "everyone"
We are facing massive crisis in hope, future of the economy globally and yet the arguments still seem about "austerity" but the only one's feeling that are the 99%.
Simple facts about wage inequality are this.. (as taken from Paul Krugman's column in the NY Times)
According to that report, between 1979 and 2005 the inflation-adjusted, after-tax income of Americans in the middle of the income distribution rose 21 percent. The equivalent number for the richest 0.1 percent rose 400 percent.
For the most part, these huge gains reflected a dramatic rise in the super-elite’s share of pretax income. But there were also large tax cuts favoring the wealthy. In particular, taxes on capital gains are much lower than they were in 1979 — and the richest one-thousandth of Americans account for half of all income from capital gains. (not from inventing or creating jobs or "working harder" all myths perpetuated to build a class warfare that is INTRA not INTER - more confusions such as comparing micro to macro economics)
For who are the 0.1 percent? Very few of them are Steve Jobs-type innovators; most of them are corporate bigwigs and financial wheeler-dealers. One recent analysis found that 43 percent of the super-elite are executives at nonfinancial companies, 18 percent are in finance and another 12 percent are lawyers or in real estate. And these are not, to put it mildly, professions in which there is a clear relationship between someone’s income and his economic contribution.
Executive pay, which has skyrocketed over the past generation, is famously set by boards of directors appointed by the very people whose pay they determine; poorly performing C.E.O.’s still get lavish paychecks, and even failed and fired executives often receive millions as they go out the door.
The reality is that this current model of economics is not sustainable. While Capitalism is certainly demonstrated success its not working any longer and its time for a change. Perhaps we are leaving the Guilded Age to the Age of Equity.
To understand the long term affects and results another editorial in the NY Times clarifies what long term unemployment and income inequity results.
The Age of the Superfluous Worker
By HERBERT J. GANS
Published: November 24, 2011
AMERICA, like other modern countries, has always had some surplus workers — people ready to work but jobless for extended periods because the “job creators,” private and public, have been unable or unwilling to create sufficient jobs. When the number of surplus workers rose sharply, the country also had ways of reducing it.
However, the current jobless recovery, and the concurrent failure to create enough new jobs, is breeding a new and growing surplus pool. And some in this pool are in danger of becoming superfluous, likely never to work again.
The currently jobless and the so-called discouraged workers, who have given up looking for work, total about 15 percent of the work force, not including the invisible discouraged workers the government cannot even find to count.
In the old days — before Social Security, welfare and Medicaid — poverty-caused illnesses killed off or incapacitated some of the people who could not find jobs. Even earlier, some nations sold their surplus workers as slaves, while the European countries could send them to the colonies.
In addition, wars were once labor-intensive enterprises that absorbed the surplus temporarily, and sufficient numbers of those serving in the infantry and on warships were killed or seriously enough injured so that they could not add to the peacetime labor surplus.
The old ways of reducing surplus labor are, however, disappearing. Decades of medical and public health advances, as well as Medicare and Medicaid, have reduced the number of poverty-related deaths. The Iraq and Afghanistan wars have left many more service members injured than killed.
Over the past quarter-century, one very costly way of decreasing the surplus has been the imprisonment of people, mostly dark-skinned men, for actual and invented offenses. Felons are not often hired when they leave prison. Many, at least those who do not become recidivists, become surplus and then superfluous labor. As incarceration becomes less affordable for financially strapped states, inmates will reach surplus or superfluous status at a younger age.
Meanwhile, new ways of increasing surplus labor have appeared. One is the continued outsourcing of jobs to low-wage countries; the other is the continuing computerization and mechanization of manufacturing and of services not requiring hands-on human contact. Continuing increases in worker productivity add yet more to the surplus. So does the unwillingness of employers to even consider hiring people who have been unemployed for a long time.
When the jobless recovery ends and the economy is restored to good health, today’s surplus will be reduced. New technology and the products and services that accompany it will create new jobs. But unless the economy itself changes, eventually many of these innovations may be turned over to machines or the jobs may be sent to lower-wage economies.
In fact, if modern capitalism continues to eliminate as many jobs as it creates — or more jobs than it creates — future recoveries will not only add to the amount of surplus labor but will turn a growing proportion of workers into superfluous ones.
What could be done to prevent such a future? America will have to finally get serious about preserving and creating jobs — and on a larger, and more lasting, scale than Roosevelt’s New Deal. Private enterprise and government will have to think in terms of industrial policy, and one that emphasizes labor-intensive economic growth and innovation. Reducing class sizes in all public schools to 15 or fewer would require a great many new teachers even as it would raise the quality of education.
In the long run, reducing working time — perhaps to as low as 30 hours a week, with the lost income made up by unemployment compensation — would lead to a modest increase in jobs, through work sharing. New taxes on income and wealth are unavoidable, as are special taxes on the capital-intensive part of the economy. Policies that are now seemingly utopian will have to be tried as well, and today’s polarized and increasingly corporate-run democracy will have to be turned into a truly representative one.
Whatever the costs, they would be a small price to preserve America as a healthy society. A society that has permanently expelled a significant proportion of its members from the work force would soon deteriorate into an unbelievably angry country, with intense and continuing conflict between the have-jobs and have-nones. America could become a very sick society, just when it needed to be stronger than ever to flourish in the global economy.