Monday August 9, 2010
The Headline in the WSJ reads that companies struggle to find workers at 9.5% unemployment. Employers wonder why they are not doing any better than when unemployment was under 5%. But the line that really caught my eye was this one.
The difficulty finding workers limits the economy's ability to grow. It is particularly troubling at a time when 4.3% of the labor force has been out of work for more than six months—a level much higher than after any other recession since 1948.
1948 was my birth year. In other words we have three generations now facing an event for the first time in their lives. Yes this time it is different. This links to my comment in the previous post that stock options, yesterday's version of the business lottery ticket, are now often worthless. The 'dream' of home ownership' has people tied to under water mortgages. Remember the character in UP?
Note the retiree spends his 'adventure' tethered to his floating house wherever he goes. This is a pretty good metaphor for our time, now thousands of people are tethered to homes they cannot sell to move to another location.
In a cycle of business stagnation one can depend on the government to do the wrong thing. This of course extends the cycle that might otherwise right itself.
Since everyone in the Administration is a college graduate, usually in liberal arts, their solution is, you guessed it, to produce more liberal arts graduates. But as one reads the first article about employers trying to fill jobs, this is precisely the wrong solution. We need lawnmower mechanics and flight attendants in the short term. Now it is true that we are falling behind other countries in college grads, but that statistic does not tell the full truth. We are falling behind in engineering and science. We are doing quite well however in political science, sociology, and oh say, recreation (yes that is a current major).
And so more debt will be piled up 'training' students for non existent jobs or jobs in government that depend on a growing economy to fund them, which of course is what we do not have. The stimulus has only grown government and not done that very well. Newspapers now detail lists of 'shovel ready stimulus jobs' that have yet to begin.
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