Millions of educated, experienced workers are tossed aside by a strong economy
washingtonpost.com
washingtonpost.com
Most American's can't afford a $1000 emergency [1].
Wages actually went down last month [2]
78% of Americans are living Paycheck to Paycheck. [3]
Nearly half of all Americans are low-income or in poverty. [4]
1/5 of children in USA are living in poverty [5]
I want someone to explain to me how this is a "good economy". I keep hearing it. It's total nonsense. I'm glad WaPo is bringing up that workers are still struggling despite these claims of a "strong economy".
[1] https://www.huffingtonpost.com/entry/most-americans-cant-aff...
[2] https://www.washingtonpost.com/news/wonk/wp/2018/06/15/for-t...
[3] https://www.cnbc.com/2017/08/24/most-americans-live-paycheck...
[4] https://kairoscenter.org/wp-content/uploads/2017/02/Poverty-...
You can finance an enterprise with debt because it may produce income, and the debt will be repaid. But financing consumption with increasing debt is... dangerous at best.
It takes 20 years of nothing going wrong to escape poverty [2]. Imagine how easy it is to get back there.
[1] https://news.ycombinator.com/item?id=17594826
[2] https://www.theatlantic.com/business/archive/2017/04/economi...
I mean, if you buy your 100" TV with debt, it's that not great, but if you buy your daily bread with debt, you're in a big trouble.
That's the problem. People are funding survival on credit.
How do you fix that? Raise wages. How do you raise wages outside of macro supply/demand factors (interest rates, employment slack)? Politics.
Raise (net real) incomes on the bottom end. Doesn't have to be wage increases.
But, yes, politics.
Next, for medical care, we need to overhaul the laws that govern medical insurance. Once again, if you try create your own affordable medical insurance that only covers in-expensive treatments, legally it's not allowed. Furthermore, there's a lot financial liability with going to a hospital. Gov't could enact laws that prevent the end customer from being financially liable above a certain amount per treatment: and force the hospital cartels to pay for it. I'm guessing that'll help hospitals become more cost effective in a hurry and prevent all that price gouging.
And third, consumers need to learn to spend within their means. There's so many things you can do to reduce your monthly costs, that most people haven't even begun to scratch the surface. Does your car really need an oil change every 3k miles? no do you really need an 80$/month cell phone bill when a 20$ one can do? do you really need to pay 100$ a month on cable when youtube gives you all the entertainment you could already want for free? (or just go to the library) etc, etc. And stop thinking that McDonalds is cheap. 8$ a meal (24$/day) is not cheap (you could eat oatmeal, beans, rice and bananas for just 1.50$ a day) there's countless more examples of this.
People need their incomes to rise (after stagnanting for the last four decades), period.
This basically introduces gov't-supported insurance for treatments above that sum. If they would say that hospitals should just eat the cost, the hospitals will have to put a large part of this cut into increased cost of other, cheaper treatments.
Not that I know the fix for the cost disease in US medicine. But likely it lies somewhere allowing hospitals compete on price.
This is why I'm usually skeptical of most claims that point to inequality as proof the economy is doing poorly. In absolute metrics, people's lives are usually getting better. The Economist ran an article a while ago that measured standards of living in absolute metrics (% of households without electricity or plumbing, whithout an automobile, that sort of thing). Almost across the board, everyone's situations are better. The main downturn is home ownership and apartment situations - but that's more to do with cities' housing restrictions rather than the economy.
Maybe today you get the benefits of new tech and it's and improvement, but tomorrow is a vote on if you get healthcare or not and you have less influence in society so you have less say in your destiny and things that affect you directly
(I agree the economy still isn't good for many people.)
In a truly booming economy people, bodies, matter more than skills. Skills can be trained after employment. I would expect companies to be paying more regardless of background. Any lesser pay for new people would/should be balanced by greater pay to retain trained people. None of that is happening. Wages are up a tick here and there, but not substantially. It will be booming when I see wages growing as a percentage of profits, when companies start tightening profit margins to retain people.
#1 and #3 are both symptoms of a common cause- essentially zero savings rate for a wide swath of the American population. For the large fraction of people, failing to save is a behavioral phenomenon. For many people, doubling their income would still result in them living paycheck to paycheck.
For #5, 17% of canadian children are living in poverty, 1 in 5 French children live in poverty, and poverty affects more than one in four children in the UK today (https://globalnews.ca/news/3739960/canadian-census-children-...) (http://www.france24.com/en/20150609-unicef-report-france-chi...) (http://www.cpag.org.uk/content/child-poverty-facts-and-figur...). Of course, each country sets its own poverty line to represent a socially-empathetic income level, resulting in pretty-even levels of nominal poverty across countries. It is not that surprising that expanding the scope of headline-worthy impoverishness to be "low-income or in poverty" would result in headline #4.
I don't have a solution. I just see that I know plenty of people who have GREAT degrees, are very intelligent and are working in a field where their success is more defined by who they are then how they were educated. I think whatever solution we do have, needs to take a look at both the economy as well as the education system and how we prepare our young for a life in the workforce. Because at the end of the day that's what we're doing, we're educating our young to be able to step into our economy and profit.
Again, I don't know the solution. Regulate the number of graduates within a certain degree field? Regulate jobs so that we force jobs to accomodate the degrees? Unionize alternate jobs so working at walmart / factories becomes profitable again? I don't know I just worry about what my children will do when they enter the economy and how will they stay in the middle class.
Educators are effectively trying to project 12 years out and try and guess what the market will demand so that they can provide the minimum skills necessary to provide a modicum of middle-class life.
That's the problem, though. Some companies, and many parents and students, no longer see it as that. They see secondary school as a place to train their future employees. And, because parents so often have to work multiple jobs, kids often come out knowing nothing about finance, so they complain about having to take classes like Algebra II.
To be honest, I feel like a lot of the problem could be solved if companies would actually go back to investing in employees. They want their employees to come fully-trained nowadays, and then don't really care about keeping them or their development. It pushes everything off onto the schools, which is also why so many feel like they have to attend university.
Stop providing loan guarantees for all students regardless of the marketability of the degree they've chosen?
If bankruptcy could fix student loans, then the ones giving out loans would be a lot more careful, schools would stop wasting hundreds of millions on new buildings that that are 80% empty, and we wouldn't have a large segment of the middle class population in indentured servitude.
Seems pretty simple to me.
Maybe make schools take some brunt of the loans. If they feel so strongly that their degree is worth it, its like they should back you as an investment.
[1] https://www.inc.com/salvador-rodriguez/long-term-coding-scho... [2] http://time.com/money/4568213/income-share-agreements-colleg... [3] https://www.economist.com/finance-and-economics/2018/07/21/i...
Full stop.
Need-based public aid (whether it's the recipients financial need or societies workforce need, or both) should be grants, and there should be broad opportunities for public civilian service that provides service-based grants not based on specific need, too. The former should have payoff considerations, the latter should not.
The idea of there being too many jobs that require degrees (but really don't utilize them) is touched on, and the proposed solution is for positions to not be allowed to ask for degree status. Instead, they would have to test for aptitude. The whole article is worth a read.
I went from a D high school to a straight A student in college. I found the freedom to choose to study what I am interested in ( Computer Science ) extremely liberating. I found the respect shown by the faculty to the students refreshing compared to my high-school. I found that being able to leave, take a nap, and then come back for my next class much more tolerable. I found that not being locked in a building for 9 hours a day freed up time to actually study and get your homework done.
Basically, I discovered what everyone else already knew: Current schooling is intended to keep kids in child-jail while their parents are working. Most schools do not have the resources to cater to bored gifted students, so we are cast aside with the understanding that "we'll be fine" while sitting through remedial classes where we have to read out loud because some of the students in the classroom are illiterate.
People claim college is a waste of time? HA. HIGH SCHOOL is four years of my life WASTED that I will never get back.
Let students set their own pace for education. Have them take responsibility for their own lives and future at a younger age. Let the children out of child jail.
I'd like to go back to a system where we look at what the job actually requires, and set the level there. Then educate people to that level. In this way we aren't allowing colleges to tell us what level we need to educate people to, but instead letting it become a hybrid.
The required education for your basic job should be free. But I also don't want to write a blank check for people to go to college for the college experience. I don't think that's necessary.
>Levi was laid off from her job at a law office during a merger in early 2015, and has struggled to find long-term work. In late 2016, she filed for bankruptcy."
How do you go from director at 59 to filing bankruptcy in fewer than two year after losing your job? Fiscal irresponsibility
To assume financial irresponsibility is to grossly misunderstand the issue.
This is a very entitled and selfish statement. The act of simply existing is very expensive in the USA, and if you have children or have unexpected medical bills that can be tens of thousands or even hundreds of thousands, you can easily eat through all of your savings very quickly and not be able to pay back debts I'm sure they could pay before they were laid off.
Someone who lives a lifestyle one typically associates with someone who's employment can be describes as "own office, secretaries and assistants, along with titles like “director” that spoke to her decades of experience" will become impoverished if they lose and do not quickly replace that job on any continent. It's not just a US thing.
It doesn't take a huge imagination to realise the unexpected could happen, especially at that age. If you have had a reasonable career in a well paying job then it is irresponsible not to put something away for a rainy day.
I'm not sure using the lack of socialised health care as an excuse for not managing your finances is sensible. It's only a minority that need expensive health care before 65 but it seems it's the majority who aren't managing to live within their means.
After seven years, we had never really had two incomes, only one.
So when we had a kid, all of our expectations were built on one income. We maintained those - my wife has been a SAHM now for almost three years. She's going to go back when he starts pre-school one or two days a week, but she'll be choosing satisfaction over money, and only to keep skills relevant (she still gets job offers). If I ever lose my job, she can make a call, get a job (she's privileged in her field), and pick up 80% of my slack. We did this so that we never have to be too worried about my team scaling down.
It helps me sleep at night.
https://www.fool.com/retirement/2017/05/01/this-is-the-no-1-...
Or you know, fiscal responsibility, but a health issue or two in the house, and there goes your money...
Simple example: The real, measurable costs of pollution - illness, polluted drinking water, etc - are externalized and so companies doing said polluting are "profitable." Would they still be profitable if those costs were not externalized? I suspect not.
Similarly I suspect there are externalities not being accounted for, for self-interested reasons on the parts of those collecting the profit, when assessing which types of work are profitable or not.
And we should subsidize vocational training to a greater extent so that students aren't forced to take on financially crippling loans.
The biggest issue with your proposal is that if those employees paid by the government to do these jobs are paid less than the private sector, you'll put the private sector out of business. If they're paid the same or better, you would need strong incentives to make them go find a different job instead of keeping a market rate job that is assured to never go away.
I would propose that the temporary government employees be paid minimum wage. This isn't intended to be permanent.
There's quite a few jobs for which the government rightfully has a monopoly. I certainly wouldn't want the fire/police forces to be private. We had that and saw the problems it created. Same goes for the military. I'm not aware of an example of a private IRS or judicial system at a national level but I can't possibly see that going well either.
So yes it's a matter of degree but I disagree with you strongly on where to draw the line.
There’s no credit given for having a tidy business with steady profit. Instead you have to have “growth” and other this-quarter-must-be-better-than-last-quarter-or-else crap that “investors” want.
Small businesses are often able to get credit in the form of bank loans once they have established a track record of profitability.
You are in a tech bubble. Absurd profitability is not required elsewhere.
Please define what "making full use of it" means, without referring to profit.
Because without that definition your sentence doesn't actually say anything.
What US currently lacks is the entrepreneurs who would come up with new products and services and then employe the unemployed, old people etc. But given the restrictions on immigration of highly skilled individual this is going to be tough to achieve.
The problem with the second half of your comment is its multiple applications of the magic dirt theory, in that somehow there exists a magic dirt in some countries that grows great entrepreneurs who are also magically forbidden from success in their own lands, yet supposedly magic dirt in other countries produces the opposite effect of people who cannot create business while in the conditions for great success. And somehow the solution to this magic soil fertilization issue is to take a solution that works for 1 person, such as moving around the world, and scaling it by 7.6 Billion to move the entire world population to Silicon Valley. The exact biochemistry is also mysterious, in that moving people around is implied to be a perm fix, although its more likely that moving people from "where X is broken" to "where Y is broken" will merely result in a larger quantity of "where Y is broken" people after a short amount of time, essentially re-enacting the slave trade to harvest a perpetual supply of human capital. Or maybe its a weird varient of old fashioned imperial era colonies complete with mercantilism. Move all the unemployed orange growers from Florida to Alaska, the only economic result will be a larger number of unemployed orange growers in Alaska rather than FL. Likewise there is no number of experienced profitable Maine fishing boat captains adequate to import and create a lobster fishing boom in Nevada, South Dakota, or Wyoming. Problems that don't scale have to be solved at the root of the problem, rather than brute force. On an individual basis, of course its nice when immigrating entrepreneurs work out, but for a variety of reasons it's not a scalable or long term solution to the very large scale overall economic problem.
That pretty much describes most of humanity, resource extraction to landfill with a brief stop off in our living rooms.
The only way to become an owner of a company is by being an employee. Essentially, all companies become co-ops. Investment of capital would happen through long-term relationships with banks, not through selling pieces of the company off to creeps who want outrageous returns at the expense of the employees/customers.
Instead of short-term gains, people now focus on 10, 20, and 50-year plans. Employees can democratically elect their leadership (or any other internal system can be set up).
The stock market and public ownership in general seems like an incredible waste of resources and focus.
Taxes should be lower for the poor who would thus spend more and keep the economic engine running and create jobs.
Taxes should be much higher for the rich so that that money is used by Govt to do infrastructure work (create jobs) or pay down debt (and thus provide services and create jobs).
Lowering taxes for the rich just allows the rich to seek investments that will increase their own wealth, not necessary creating jobs (Some VCs are an abberation to this).
Some of it's just failings of a two party system. You vote for the one you like better, but given a binary choice it's a fairly non-specific vote.
Whatever the candidate says, fact check it and display a few important impacts to people directly. Economic is the easiest. Another good one is jobs, taxes, quality of life, debt, inequality.
For example I see that there is one graph with part-time, full-time graph. The full time employment has increased rapidly while the part-time graph remains the same. How is that possible ? Also, sharing economy is a new thing where a lot of people who would be "unemployed" in past are now doing part time work. A lot of work can be done online today staying at home and hence more people might have taken up part time work.
Another graph shows how part time and full time wages have grown and it claims part-time wages have been stagnant. The graph does not show that.
-- “I’m overqualified for these jobs, but they don’t think that I would be happy to do them,” Corcoran said. “I’m not finding any interest in a 60-year-old guy with gray hair and, honestly, kind of a limited shelf life.” --
Aren't these people actually the perfect candidates for part time experimental work positions where you could fire them easily ? (In almost all countries old people have hard time finding new employment)
Also, being forced to take on a massive amount of debt just to have a chance to get a certain job makes that job less valuable overall. A company can still boot you out in less time than it takes to pay off debts so you’re really trying to find continued employment to justify an investment such as having to move or obtaining a degree. And of course you might acquire new debts while paying off the older ones.
These situations tie the hands of so many, and that’s not a “strong” economy. If there’s no truly disposable income, you’re essentially expecting people to set aside their basic needs to raise your stock price.
“When he first started working iron, Hartnett was making about $43.90 in today’s dollars. On his last project, he made $16.93.”
What I'm curious about these statistics is: how do the statistics track the self-employed?
Seems to me the gig-economy is not about part-time jobs but about part-time self-employment.
So, if you are self-employed and you pay your taxes, from the government's point of view you are OK. But that doesn't mean you are profitable or making a living wage.
In IT, if you are 'benched' the employer pays you regardless. But a 'benched' self-employed person is basically an unemployed that is burning through cash paying taxes, health insurance, etc.
These statistics are tracked to a pedantic level of detail by the BLS. You can get numbers of people by industry and zip code and earnings bucket and quarter for most categories of self employment going back to the early 1980s. Moreover, unemployment isn’t mean to measure if people are getting a liveable wage. It measure if they’re getting any wage. The problem you cite is an issue, but it would quickly resolve itself into unemployment as the cash stores ran out.
Indeed, at some point the money runs out and that will become actual unemployment, but it will show up in statistics with a rather long delay or not at all.
In the mean time, you have people doing literally nothing while on paper the economy is overheating.
Of course, I'm sure it's a small percentage of the population... so probably not very relevant.
As people age their skills and acuity decrease, so while some may want to continue working its not at all a sure thing they'd be able to even if 2008 hadn't happened. I can't think of a good statistic to capture this and we're both looking at second derivative statistics.
https://www.wsj.com/articles/retiring-baby-boomers-leave-the...
There's this. This doesn't exactly back up the claim - there are a lot of reasons people might not be participating.
25-54 year Labor Paticipation Rate is those that you'd expect to be working but aren't.
And there is a statistic that does capture those kind of discouraged workers, it's the U6 unemployment rate. https://www.investopedia.com/articles/investing/080415/true-... And like I said, the U6 numbers do not reflect your original statement that millions of people gave up during the recession and have not worked since.
In other words, you began your research with conclusion already in mind, and then looked for a way to present this data to show this conclusion.
Excellent statistical work. That's exactly how such research should be done.
There can be additional cost savings in UBI (and even in existing social programs) if it is structured to incentivise people to work. Many existing social programs actually disincentivise people from working because they lose the income from the social program if they work (too much) and it results in a net loss for them, so they don't bother working.
If a social program is structured so that people don't lose all of their social program income when they work, then they realize a net gain in their income and they continue working. The longer they continue working, the more likely it is that they will gain experience allowing them to make more income on their own, resulting in a further reduction of their social program income.
A very simplistic example would be to remove 50 cents for every dollar they make at their job. If they received $500/month when not working, by the time they're making $1000/month at their job, they're receiving no social program income anymore.