Underemployment

[MGDJ]

If you pay attention to the major news outlets, you would think the economy is getting better (http://tv.msnbc.com/2013/02/01/unemployment-ticks-up-to-7-9-but-sig...).  Most of the news organizations ignore the net job losses, workforce participation rates and most of all, the level of underemployment in the United States.  There are strong indicators that things are getting much worse in America on the financial front if you look at some statistics.

Underemployment is a real problem.  A recent study found that about half of the workforce is underemployed (http://centerforcollegeaffordability.org/research/studies/underempl...).  One of the main contributors to the study was my student advisor, Richard Vedder at Ohio University.  15% of New York City cab drivers have their undergraduate degree.  60% of the new jobs have been created in the $7-$14 an hour range (http://seekingalpha.com/article/1151881-2013-market-outlook-optimis...).  Personal income is down 8% since 2007 on an inflation adjusted basis (http://seekingalpha.com/article/1151881-2013-market-outlook-optimis...).  Personal debt is at an alltime high and savings rates are going down (http://oneinabillionblog.com/2012/08/13/2-personal-finances-the-sec...).

You can pick out a few statistics that show some slight improvement, but all signs point to disaster on the horizon.  I don't have all the answers, but a change is needed.  As I see it, first of all, Government investment in jobs that make sense needs to take place.  It seems that manufacturing and pro-union jobs are all jobs that are supported at the Government level.  Regulations need to be lifted for companies where they discourage job growth.  This leads to the workforce participation and underemployment problem.  We are more concerned with resticting business in America than working with them to see how they can create more jobs.  Personal income, debt and savings are in part a matter of responsibility.  I don't know how we get back to personal responsibility as a measure of success in this life, but one step is to not see those who abuse their consumer rights, going into debt without saving money as victims.  Again, this is the way I see it and have no clue if we can reverse the trends.  I personally do not start cheering (news outlets) every time there is modest uptick in one section of our economy.  I think its time we start really seeing the big picture.

[Mandy Muffin]

Doomsday came on several occasions in our country's history when we were warned that the stock market was oversold.  We only took heed when $trillions were lost in equity and people's futures were compromised.  We were warned the housing market was fragile with millions of homes sold to buyers who didn't have the wherewithal to pay their mortgages.  We are still in the tail spin from that fiasco.  And to continue a federal government that exceed it revenues by overspending  40% or so per year is a sure path to ruin. it will happen sooner or later.  The current administration hopes it is later.  You can't violate the laws of economics and survive in the long run.  Right now many are happy that the stock market is doing well, but that is the result of companies downsizing and getting more efficient to meet the demands of the consumer.  Companies are programmed to operate at a profit and they will always strive to do so. 

Here is a chart that shows what has happened under the Obama Administration:  http://blog.heritage.org/2011/02/22/federal-workforce-continues-to-...  Growing jobs in the public sector while shrinking jobs in the private sector is not a formula for success according to any economics I have studied, except that of Karl Marx. 

[exedir]

What we are seeing is effects of structural change in labor and employment.  And yes, it is disintermediation that is the cause, the wiping out of the middle of the employment sandwich.  And all has to due with productivity gains, gains in removing the need to have middle management organize and coordinate what is done, except in government.  With computers, robots and technology what was done, does not need to be done by people now, or in the future.  

And this will continue, where those that were needed, and needed certain levels of education and experienced, aren't needed anymore, as being obsolete and redundant.