Structural unemployment has led to material and emotional devastation across America for more than a generation. Relentless change is impacting us in many forms, but unemployment hits hard.
Americans will meet the tests of this turning point as we have all others. But, to respond to structural change with resourcefulness and fortitude we must understand it for the unyielding reality that it is.
We could blame the profit motive, or a lack of patriotic loyalty, or insensitivity to human needs, or runaway greed. All of these things might be involved. But, the causes include major changes in the way the world operates, and these are not going away.
I expect most of us know the headline employment numbers are bogus. Most new jobs added in the past year have been part-time and low paying. Even then, the number of working age Americans employed today is equal to the number employed in the late 1990’s. And, since that time, the population of working age Americans has grown by about 30 million.
Almost none of these people are included in the numbers reported by government, the Federal Reserve, or the press.
I do not expect that this problem can be fixed by changing the leadership in Washington. Right or wrong, the causes are consequences of change that cannot be controlled by any combination of people or institutions.
Most readers are aware of the leading causes of structural unemployment in the United States:
1) The shift from manufacturing to a service economy has resulted in “skill mismatches” for large numbers of people with technical experience.
2) With outsourcing and offshoring, regular fulltime jobs have vanished. Larger businesses have moved manufacturing elsewhere in the world where workers face unsafe conditions, work for far less pay and have no workplace benefits.
3) New technology has displaced large numbers of manufacturing jobs with automated assembly lines and other forms of mechanized fabrication. Robotics is coming of age, and container ships have transformed transport.
4) The fickle and faithless specter of “financialization” now dominates the economy. The increasing flow of profits to banking, investment, and insurance firms, exponentially increasing CEO salaries and bonuses for market traders, and vastly increased financial speculation have all contributed to destabilizing employment.
Financial institutions are taking a huge and unprecedented bite out of the economy as a whole. They now contribute less of productive value than they ever have, and are instead smothering the real economy I wrote about last week.
For those interested in a thorough understanding of structural unemployment in the United States, I recommend a good book: “The Causes of Structural Unemployment: Four Factors that Keep People from the Jobs They Deserve,” by Janoski, Luke, and Oliver (2014).
The authors provide a reasoned analysis and review the resources available for communities and small businesses. Most important, they offer a strategy for preparing American working people, both younger and older, for rapidly changing work environments.
However, their proposals depend on government policies.
As long as current economic conditions continue or improve, this book offers tools for constructive action. If, on the other hand, we experience a worsening crisis, or the capacity of government is reduced still further, the policy recommendations offered here will be of little use.
Regardless of what comes next, I believe we are challenged to rebuild our economic lives locally. And, we cannot afford to wait.
I encourage working Americans and small business owners to work around the obstructions, political gridlock, and social chaos to begin building local and regional economic independence.
We will need to call on American ingenuity and put our minds to it, however limited our material means may be. I will offer a few ideas on the coming pages, but the creative details and determination must come from you.
An effective, workable economy will be based on free market principles and American values. It will need to function realistically in the real world, as a living assertion of the principles at its heart.
Next week: The Hidden Dangers of Complexity
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