Thursday, February 11, 2010

America the Jobless

To keep clients from giving up, career counselors need to appear optimistic. And to avoid our feeling disingenuous, in reading the tea leaves, we unconsciously tend to overweight the positive.

But I just read the cover story of the March 2010 issue of The Atlantic: "How a New Jobless Era will Transform America." (Thanks to reader Scott Steinbrecher for emailing it to me.) After reviewing a wealth of research, it concludes that, especially for men and for people without a designer-label sheepskin, ever fewer people will be earning a middle class living.

The article's negativity somehow gave me license to, for this article at least, to replace my optimistic bias with a truly honest appraisal of America's job future.

My career counseling clients, especially the men, are having a helluva time landing a decent job. Perhaps I'm a lousy career counselor or my clients are a bunch of losers but I don't believe either. I think the unemployment rate and even the underemployment rate grossly underestimates how difficult it is to land a white-collar job that pays a middle-class wage.

The severity of the problem is made clear from an example cited in that Atlantic article:
Last spring, an organization called JobNob began holding networking happy hours to try to match college graduates with start-up companies looking primarily for unpaid labor. Julie Greenberg, a co-founder of JobNob, says that at the first event, on May 7, she expected perhaps 30 people, but 300 showed up. New graduates didn’t have much of a chance; most of the people there had several years of work experience—quite a lot were 30-somethings—and some had more than one degree. JobNob has since held events for alumni of Stanford, Berkeley, and Harvard; all have been well attended (at the Harvard event, Greenberg tried to restrict attendance to 75, but about 100 people managed to get in), and all have been dominated by people with significant work experience.When experienced workers holding prestigious degrees are taking unpaid internships, not much is left (for everyone else.)
And it's not surprising. Unless absolutely necessary, why in the world should an employer pay an American $50,000-$100,000 a year, plus benefits including health care, social security, disability, retirement, worker's comp, 12 weeks unpaid (and some in the Obama Administration want it to be paid leave.) unemployment insurance, fear of wrongful termination suits, etc., etc.? Increasingly, employers are choosing to get work done by automation, part-time/temp workers, and offshoring. The latter is becoming ever more prevalent even for the previously thought-to-be-immune knowledge work, as Asian universities are revamping their curriculum to emphasize creativity, entrepreneurship, etc. And all those Asian workers can be hired for a fraction of the cost of an American.

Too, the uncontrolled inflow of illegal immigrants exerts downward pressure on salaries. The average illegal immigrant has little education and poor English skills and so is willing to do low-level jobs, on which they pay little or no tax. That floods the market of applicants for higher level jobs thus driving their salaries down, and making it harder to land a job at all.

I don't believe there's a solution that won't require decades. In a previous article, I've touted using K-16 schools to create a nation of entrepreneurs, but that would require a generation or two. Until American wages and benefits decline to near the world average, unless you're a star, the main source of well-paying jobs will be self-employment (often risky) and the U.S. government. And those jobs will dwindle as there's less worker income to tax and the government must stop going deeper into debt and printing more money lest China and other lenders deem the U.S. utterly credit-unworthy and/or call in their existing loans to us.

For the foreseeable future, ever more Americans will have to settle for $10-an-hour jobs, living very modestly, paycheck to paycheck, with little or nothing saved for retirement. We'll work 'til we drop...if we're lucky enough to have a job. It's part of the decline and fall of the American empire.


Anonymous said...

Wow, Marty, this is bleak. But I appreciate your honesty.

One thing that is sure...anything that can be outsourced overseas for cheaper will be. It started with factory work, but now it's the white collar paper pusher jobs too.

The U.S. definitely can't compete, and I'm not sure we'd even want to. People who do the office work we outsource to India and China are making dollars an hour with no benefits. The American lifestyle is not sustainable on such wages.

What's the solution to all this? I have no idea, but thanks for telling the truth. All any of us can do is face reality and try our best in a tough world. I am so thankful to have a job now, I can't tell you. I don't make great money, but at least I have a roof over my head and food to eat. Combine that with good friends, good books, music, and trying to improve the world in small ways and life is still worth living.

Anonymous said...

As usual, Marty Nemko is "spot on." He has been predicting this for many years. By the way, could you please fix this link:

"1/31 Al Bernstein, author of Am I the Only Sane One Working Here, on becoming aware of and dealing with liars and crazies in the workplace."

Anonymous said...

Thanks for your honesty. I think you are spot on. There will be an upturn eventually (and it will be touted by many) but the bottom line is exactly as you describe, I fear. If there is a lifecycle for rich nations, we are on the downslope.

Marty Nemko said...

Thanks, Anonymous. I believe the link to that show should work now. Thanks for bringing it to my attention.

Jeff Y. said...

Mr. Nemko, you are perfectly correct.

There is also the huge issue of H-1B non-immmigrant visas. These visas allow huge numbers foreign workers to work here, increasing the supply of workers, decreasing wages overall.

Worse, the US government has issued over one million new green cards for foreign workers during the worst unemployment rates since the Great Depression.

The US government appears to hate its own citizens.

H said...

Do you think that nations like Canada and Australia would become better than the US in terms of jobs and pay or would they also spiral down with us?

Marty Nemko said...


I must plead ignorance I barely know enough to opine re the U.S. But while as a country, I believe there will be a slow spiral down in high-cost countries, it may be most prudent for individuals to ignore that and instead figure out how to do relatively well: be an entrepreneur, have dual skillsets--e.g., computer science and molecular biology, or an expert repairer of industrial or medical heavy equipment, for example.

Anonymous said...

Dear Marty,
What a breath of fresh air YOU are! My "ex" company paid for a one year subscription to a job club with two choices: conference call EST, or job coach (8 visits). Although I understood the coach's need to be upbeat, I felt there was a great disconnect from reality. My entire working life, I've never seen anything like this. Sure, networking is important, but its also true that plentiful jobs of the past was no longer true. And, it was time to go to plan B (think outside the box: retrain or reinvent career). So, again, you are at least talking about the good, the bad, and the ugly -- todos!

I do take exception to one point of view I've seen mentioned again and again, and that is the assumption that aliens are preventing Americans from jobs. Although, I do see the point in policy of hiring H-1B non-immmigrant visas and feel that should be revised, it is my strong belief that the lowest paying jobs (agricultural, meat packing, housecleaning, etc.) that Aliens perform ARE open to any American willing to do the work for the same pay. I do NOT believe Americans are willing to perform those jobs. Also, here in the Bay Area, I regularly hear of immigration performing sweeps, ripping apart families of workers who've lived here for many years -- and yes, performing those jobs Americans will simply not do for any pay! Anyway, aliens taking away jobs is not the issue. You only have to look at the World economy to see we are all suffering from a major toothache!