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November 14, 2006The Musical-Chairs Economy
Michael Mandel
Here's the question for today: If the unemployment rate is only 4.4%, why do we all feel so dang nervous about our jobs?
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06:58 AM
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There has as well been a shift due to globalization away from higher paying jobs to lower paying ones. Manufacturing and back office work is being offshored while truck driving and restaurant and hotel work are being created. Energy and healthcare may be growing but take different skills and education than most that would lose their jobs. Not only will you go longer before finding something, but it will likely be further away, pay less, offer lower benefits and pensions, and probably be a worse place to work to boot.
Posted by: Lord at November 14, 2006 12:38 PM
Regarding musical chairs and will you have one?
Peter Drucker put it best. The average company lasts about 30+ years yet knowledge workers retire after 50+ years. You, therefore, have people who have outlasted their company and they have their SEP, Keogh, and Roth accounts which they must administer in their retirement years. That鈥檚 the real Rub.
Good chance you will be writing for another Magazine before you sit down. I hope you find a chair, or a place to sit.
Posted by: Frank Drake at November 14, 2006 06:45 PM
May be . . .the off-shoring, out sourcing quotient.
Growth in the unemployment rate
Underperforming companies, International competition.
All this leads to competition for jobs, and therefore excessive demands for better performance. .
I think its called the multiplier effect
Posted by: Tirath Muchhala at November 15, 2006 09:40 AM
No way to regulate?
Posted by: Will Castillo at November 15, 2006 11:09 AM
Lord has it right. Not all jobs are created equal. There are huge numbers of persons in today's economy who are underemployed. I know software engineers who are working as janitors, software designers selling tours, mid-level managers selling time-shares on the street, etc. All of these folks are nominally employed but none of them feel employed. The economy is very sick from their point of view. In spite of the inadequacy of our educational system, our economy can't even provide proper jobs for the limited number of quality workers that do graduate from the system. For those who have suffered a 75% reduction in their wages, the economy is already in a depression and their disillusion infects the rest of those who still have well-paying jobs. One wonders what will happen to them when they lose their jobs and all of the low-end positions have been taken. Perhaps they'll become nannies and gardeners, if they are willing to work for less than the illegal immigrants who already have those positions.
Posted by: Frans Bouman at November 15, 2006 12:11 PM
Frank,
I just checked my chair, and it has wheels! Do you think BW is trying to tell me something?
Posted by: Mike Mandel at November 15, 2006 12:43 PM
All this is anecdotal, which fits into pessimists' self-pity.
Fine, if we exclude government hiring, the unemployment rate is 4.8% at most. Still better than it has been for 35 of the last 38 years.
Most of the job losses to outsourcing have already occurred. In India, salaries are rising 15% a year due to shortages, and India itself is outsourcing o Bangladesh.
The pool is filling up.
Posted by: Kartik at November 17, 2006 03:02 PM
Michael, that's terrific that BW believes in you.
Your column remains consistently interesting but you still play it too safe. (Smart if you wish to stay at BW).
How about predicting where the US will be 25 years from now, how technology will change our World, will culture interfere with Man's Creativity or will Man's Creativity interfere with culture?
Let's start easy.
Maybe listen to three top futurists to see what they believe rests ahead in Man's future.
Next look at several Economic Disasters the US has faced in the last 150 years. What major changes have become commonplace since then?
If I didn't believe in you, Michael, I wouldn't write.
Posted by: Frank Drake at November 18, 2006 09:57 AM
Maybe it has something to do with the fact that one of the nation's historically most prosperous cities/states is having such a hard time right now. I'm in school pursuing an MS in Finance. When I'm done, I don't think there will be a job here for me. I plan to sell my condo at a loss (I'm not sure how I'm going to pull that off yet) and move to another state, where I don't know anyone, to start over. I asked a girl in my class what she is going to do and she said she is leaving too. We are literally in a depression here. I think if it were West Virginia or Mississippi that were in trouble, it wouldn鈥檛 be such an issue.
It鈥檚 funny someone mentioned truck driving. After spending about 6 months looking for work I got a call from a trucking company. I took the job. As a truck driver I make about $7.50 to $11 an hour, depending how the week goes. We work a lot of hours so it seems like we make more money than we do.
Posted by: Joe at November 18, 2006 11:19 PM
Mike have you seen the new studies that take a swipe at "dark matter", I would like to see your take on them. http://www.econbrowser.com/archives/2006/11/rip_dark_matter.html
Posted by: Phill at November 20, 2006 03:12 PM
I don't feel nervous about my job :)
Posted by: Kevin at November 27, 2006 01:22 PM
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