New York Post: The dead end kids:
The unemployment rate for young Americans has exploded to 52.2 percent -- a post-World War II high, according to the Labor Dept. -- meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time.
posted by Helen at 10:38 AM
44 Comments:
The mandated higher minimum wage probably isn't helping any. Don't know if the article went into that, though, having broken the cardinal rule on your blog by not reading said article before commenting.
On the other side of that though, a brand new Dunkin' Doughnuts and Chick Filet have just been built side by side, near the ever expanding university down the street. Oddly, they are both having trouble hiring enough employees.
The higher min wage hardly makes for decent living. That is not the cause.
White collar jobs now get outsourced to India.
Blue collar jobs get outsourced to China.
Remaining possible jobs: hands on work, ie, nurses, cab drivers, cops, funeral workers, etc.
If you believe in globalization that is good for the market and for corporations and the free market, then this is the future.
If you owned a company and could have your work done much cheaper outside the country,would you outsource? Of course you would.
Wonder if these young people still like that 'change you can believe in' that they voted for?
Never a good thing for a society to have a majority of unemployed youth. I wonder what will manifest.
What, you mean you can't spend four to six years getting a liberal arts/humanities or generic business degree and expect to get a $50k/year or better job handed to you on a silver platter?...
The higher education bubble is going to obliterate a lot of universities when it finally bursts. People are being forced to realize that just having a college degree is not a meal ticket to the American dream. To get a good job out of college you have to actually learn something that the market wants and guess what? You can't party it up and carouse for four years while studying Computer Science, ** Engineering, Medicine, Law, some of the specialized business majors and things of that nature unless you're extremely good and decently organized.
The higher min wage hardly makes for decent living. That is not the cause.
One of my nieces is married to a man who manages several pizza shops. Every time they raise the minimum wage, he has to terminate some employees. Is that because he's hard hearted? No, he's a good man who cares about his employees. However, when you raise the cost of labor - especially unskilled labor in bad times - then it's hardly surprising that employers have to cut the number of employees. Raising the minimum wage is only part of the increased cost. The employer has to also pay more for Social Security and Medicare taxes (a flat tax directly tied to income). It wouldn't surprise me if the costs of unemployment insurance and workers compensation also increase.
MM--
simply silly and not at all useful to now blame Obama (cange you can believe in) for what corporations are doing to hire those from other nations and dump American workers, or to outsource white and blue collar jobs. Blame the companies, the stock holders, the CEO's--but plain silly to blame Obama for what had been begun some time before he got his start in politics...just a useless remark that tries to blame a guy who won instead of facing up to the real problem that confronts all your young people now and in the future.
Would McCain and Palin have given us full employment?
Fred,
While Obama and the Demonrats aren't totally responsible, they're not helping matters any. Whenever you increase taxes, regulations, and generally make the environment unfriendly to business, of course they'll dump American workers. Now, with the Lilly Ledbetter pay act, a woman now can sue for pay discrimination YEARS after the fact! Thanks to sexual harassment law, a company can be forced to pay out TENS of thousands of dollars just because some bitch 'feels uncomfortable'. I could go on, but you get my point. For me, it's easy to see why companies are canning their American workers, and moving overseas; they don't have to worry about all this BS that they do here! This BS was brought about by liberal, PC fascists like those in charge of the gov't today...
MarkyMark
This comment has been removed by the author.
For many years, we have had business and government working together to move jobs out of the US. Additional regulations, taxes, union demands, etc. have increased costs, while the government has done absolutely nothing to protect American workers by keeping jobs here. The government has actively aided the few remaining companies to bring in foreign workers to replace American workers at lower wages with H1B visas, etc.
In short, in order to keep the cost of manufactured goods low while cleaning up the American environment, we have allowed the export of our manufacturing industry, just about all of it, away from this country. This is everything from heavy smokestack industry to textiles to electronics, aviation, you name it we have shipped it off-shore because it is cheaper to do it there. This was a short sighted, foolish approach, and now we are going to pay for it dearly.
The US is in serious decline, and may well be split us, taken over by an outside power, or some other disaster. We have thrown away the strength we had because we were arrogant. Now we will pay.
The required skill (none) doesn't support the wage, fred. It raises the employer's costs of doing business, which increases the price we all pay for a good or a service. The idea is to work your way up and out of it. To make room for another kid working his way up and out of it. A job requiring minimum skills, paying minimum wage is a temporary position. It doesn't pay enough to live on, and it shouldn't. Attempting to make it so cheapens learned skills, diplomas, and sheep skins. Even if you can't read or write, you get minimum wage. Don't you expect a cashier at Ace Hardware or a stock clerk at Safeway, or a burger flipper at What-a-Burger to be a 16 to 19 year old kid still living at mom and dad's, instead of a 34 year old with three kids?
Dr. D, you are pretty damned right on the mark there as well. I work for a manufacturer of hard items that supplies needed equipment to other manufacturers of hard items - steel and other primary metals, chemical, power generation, shipbuilding, automobile manufacturing, appliance manufacturing, lumber, cement, other building materials, minerals, coal, gas and oil mining and production, many more items. Yes, it's all going away, leaving behind nothing but lower paying service jobs for most. The difference between your point of view and mine is that you see it as short sighted, while I see it as intentional.
@ br549
You said, "The difference between your point of view and mine is that you see it as short sighted, while I see it as intentional."
I think we are probably in complete agreement. It is a matter of whose short sight or intentionality we are talking about. When I said short sighted, I was thinking of the American people as a whole and their acceptance of this destruction of our industry. When you speak of it being intentional, I think you mean on the part of companies who see greater profits by shipping jobs overseas. These are both true.
The great mystery to me is why our government allowed this to be done. Why did Congress allow our nation to be destroyed? I suppose the answer is that Congress was bought, one Congressman at a time, by special interests. They could each rationalize that they were only doing a small thing, nothing really significant to hurt the country in each small step.
We've sent corrupt people to represent our interests. Like F. Herbet said, its not that power corrupts, its that it attracts the corrupt. It seems to be the achilles heel in all Republics.
And the People are not blameless. Consider the common refrain: "all those congress-critters are corrupt weasels, expect for mine - he brings home the pork."
That, and the Socialist Left has been undermining this country since the end of WW2. Helen's advocacy of Real Men is simply a response to the socialist plan to destabilize family units and replace the father with the State.
/edit: Frank Herbert
Yes. Unless some of them figure out to do it themselves and stop waiting for a literal job. Make work, be creative, and get going. No one handed out jobs when people first got here, it was survival. And look where that got us. Then again, they didn't have school holding them back, false expectations for a secure growing American as a foundation, and weren't indoctrinated to believe the world was about them.
Still, this might be what is needed to get some things going again. At least, if the rest of us grow up and decide to keep the 900 pound gorilla that is the government off their backs so that they have a chance.
Just look at how the US government and unions ruined GM. Crikey. That was a banana republic style nationalization.
That stuff scares the hell out of owners of capital. After that, who _wouldn't_ try to move their business out of the country?
Also, the H-1B program has decimated the science, technical, engineering, and mathematical fields. This was an intentional policy of the National Science Foundation to reduce corporate R&D expenses.
We have more H-1B visa holders than unemployed technical workers. Think about that.
Young graduates get squeezed. Older, more expensive, workers are priced out of the market.
http://javelineer.com/end-h1b-and-other-non-immigrant-work-programs/
Read about law firms teaching businesses how to use fake job ad to _avoid_ finding qualified and interested US workers. Defrauding US workers, so companies can get a foreign H-1B visa holder.
We live in a country that hates it's own citizens. It's insane.
Just look at how the US government and unions ruined GM. Crikey. That was a banana republic style nationalization.
At any time, GM could have built a factory here... a factory there... over 20 years from the 60s-early 90s in the South where collective bargaining is just as illegal as price collusion.
You know who did that instead? Honda, Toyota and Hyundai. GM and Ford were too arrogant to start moving all of their production out of the unionized North when they had the chance. They enabled the UAW.
***They could have done it over a 20 year period any time from the 50s to the present. 20 years is probably all the time it would have taken to subtly build up the infrastructure without the UAW seeing the big picture.
"The higher education bubble is going to obliterate a lot of universities when it finally bursts. People are being forced to realize that just having a college degree is not a meal ticket to the American dream."
I'd like to think this is true, but the college bubble won't burst until employers stop looking for any kind of degree, no matter what subject or how poorly acquired, in their recruits.
"To get a good job out of college you have to actually learn something that the market wants and guess what? You can't party it up and carouse for four years while studying Computer Science, ** Engineering, Medicine, Law, some of the specialized business majors and things of that nature unless you're extremely good and decently organized."
The extended immaturity of American young adults and the aforementioned a-degree, any-degree mindset of corporate America ensures lots of kids will go to college for the piece of paper, not be capable of considering what they actually want to do, do the minimum possible, run up a lot of debt and have as much fun as they can.
Also, people who could study hard subjects and party (or have extensive hobbies) were incredibly gifted people, which lends credence to the idea that even mediocre grades in a challenging college subject combined with lots of activities (service, sports, travel, playing in a band, a job, even president of the frat house) shows a person of great versatility who is valuable in a business.
I'm gonna play devil's advocate on Fred's side for a moment. Can a small business owner step forward to PROVE that the higher minimum wage forced him to lay off employees that wasn't motivated out of greed?
"Also, the H-1B program has decimated the science, technical, engineering, and mathematical fields. "
I wouldn't say that it has decimated it; rather, I'd say that that's what has kept it alive. Consider this: among our current youth, interest in the sciences and engineering (other than among first-generation children of immigrants) is very close to zero. Engineering schools have for years had slots going unfilled, and up until the current recession, engineering-heavy firms were having a difficult time finding qualified employees in the U.S.
I trace this back to the '70s leftist radicals, who were very successful at demonizing the hard sciences and engineering as being the source of most of the world's problems. Today, parents discourage their children from going into those fields, because of their belief that it's unethical in some undefinable way. Engineers have never been held in lower regard by society than they are today. Every other profession makes more money, enjoys higher social status, and doesn't have to work as hard or scramble as much to stay employed.
Dave - I'm a software engineer and I have to say that you're right depending on what region you live in. If you live in the Silicon Valley or Seattle area, techies are a lot more respected then say Harvard, CT.
"Today, parents discourage their children from going into those fields, because of their belief that it's unethical in some undefinable way. Engineers have never been held in lower regard by society than they are today. Every other profession makes more money, enjoys higher social status, and doesn't have to work as hard or scramble as much to stay employed."
Engineer here...I agree with your basic premise, although I don't agree that sci/eng/med/tech is seen as "unethical." Not where I came from at least. I do agree that engineers are held in low esteem, because geeks aren't cool like guys in suits. (I'm an engineer who wears a suit to work.)
What's ironic is that technical thinkers, from Steve Jobs and the Google guys on down, are changing society faster than ever before, and they are still seen as geeks in tattered clothes rather than polymathic visionaries. You get what you emphasize, so everyone in America wants to be on a reality show or a borderline-disordered celebrity. In China and India, they are pumping out scientists and engineers like no tomorrow. It's valued more in that society.
"doesn't have to work as hard or scramble as much to stay employed."
This seems to contradict what you just said about firms having trouble finding technical employees - if the firms need labor, engineers shouldn't have that hard a time finding work, am I missing something? I find that people with generic humanities degrees are having a much tougher time than my technical friends finding jobs they can interview for.
I should also add that (save ubiquitous exceptions) American education structure is soft and though it punishes "square pegs," it also rewards extroverted act-outs and bullies by simply refusing to deal with them. More importantly, things that are hard are just not seen as worthwhile. Times tables are too "rote" and denigrated by advocates of hip educational fads.
Consider the following:
"Football may me the best taught subject in American high schools because it may be the only subject that we haven't tried to make easy"
Kids who can't produce a halfway-decent analysis of a youth novel in high school can perform a complex, interlocking sport with close to perfection (95% mistake-free) on a good day.
fred doesn't get it, either unintentionally or worse, intentionally.
Massive government intervention in the auto businesses, bank pay, banks themselves, healthcare (1/6 of economy!), repeated statements about upcoming tax hikes on businesses and individuals.... all create a very unstable, uncertain environment where businesses have no idea where and how to plan for their futures, particularly employment needs. These things can easily be laid at Obama's feet as the main protagonist for susch business starving conditions.
"Would McCain and Palin have given us full employment?"
- Ridiculous non sequitur, and not the paradigm at all. There's never been full employment, so trying to set that as the standard is fallacious bullshit, not to mention diversionary.
Whether or not minimum wage supports a decent lifestyle is beside the point. When government fiat raise operating costs, employers must adapt. It's not just the hourly wage but the additional Social Security, unemployment taxe and worker's comp taxes due to the higher wage.
Outsourcing has hurt many jobs, especially middle class jobs whether blue collar or white collar. So far, the Bush/Obama response has been to bail out the rich guys and stupidly short-sighted programs like Cash for Clunkers. Contrary to the Democrats meme of being "for" the little guy, they seem more interested in helping the wealthy, elite than Bush ever was.
The guy at the NYPost doesn't know the difference between the unemployment rate and the proportion of 16-24 year olds who are employed. Dr. Smith's own husband was in school until he was about 25 and he seems to be doing just fine. It's what happens when you get a post-graduate degree, y'know -- you're generally counted as not employed, which is different from unemployed.
Dave Cornut wrote: "Consider this: among our current youth, interest in the sciences and engineering (other than among first-generation children of immigrants) is very close to zero. Engineering schools have for years had slots going unfilled, and up until the current recession, engineering-heavy firms were having a difficult time finding qualified employees in the U.S. "
All of that is provably false. All of it.
Interest in science and engineering is flagging (not close to zero) because unemployment in the tech sector is so high. Competitive intensity for jobs is astronomical because of H-1B. You have reversed cause and effect. Students interest flags because engineering prospects are poor, not the other way around.
See:
Silicon Valley unemployment rate
There has never been a shortage of students for engineering programs. There has never been a shortage of engineers.
See:
National Academy of Sciences report, Where the Engineers Are
FAIR's excellent summary of the problem
You're off base on this Dave. Employers had a difficult time of finding tech workers AT LOW WAGES, but that's not a shortage. In economics that just supply and demand. The H-1B program is a direct intervention into the tech job market to advantage big companies against workers by increasing worker supply.
When the NSF intentionally sets out to lower engineering and tech wages, when the government intervenes against its own citizens - of course interest in engineering is going to flag. Duh.
Alex said...
I'm gonna play devil's advocate on Fred's side for a moment. Can a small business owner step forward to PROVE that the higher minimum wage forced him to lay off employees that wasn't motivated out of greed?
Not a small business owner but I'll attempt an answer anyway.
Consider a small business like a pizza shop. Suppose it has gross revenues of $30,000 a month/$360,000 a year. Sounds pretty successful, right?
Well, before you have any profit, you have to pay your expenses, such as:
1. Materials to make the pizza, say $10,000 a month.
2. Cost of the restaurant lease, say $1,500 a month.
3. Cost of utilities, say $500 a month.
4. Cost of labor, say $15,000 a month.
So, your revenues are $30,000 a month and your revenues are $27,000 a month. For all the risk and work of running a restaurant, the "rich, greedy" business owner makes a whopping $3,000 a month, before taxes.
Now, if you raise the minimum wage, you've raised the cost of labor. Unless you can raise your revenues, your $15K for labor buys less labor each month. To raise revenues, you'll have to increase sales and/or increase prices, both of which are hard to do during a recession. What is the "greedy" business owner to do, take a pay cut himself to make up the shortfall or cut employment? In the end, the owner ends up cutting employment (either through layoffs or reducing hours) and ends up working longer hours himself.
The numbers are hypothetical but the matter isn't - when you raise the cost of labor, employers buy less of it. Unlike government, business owners can't simply print money or borrow forever when revenue is insufficient to cover their expenses.
Larry - the leftist argument is that the pizza owner should take a pay cut to be altruistic to his wage slaves...
@ Jeff Y
Thanks for your answer to Dave Cornutt. I fully agree with your answer, but I did not have the backup items at hand that you used.
American students have looked at the engineering curriculum for many years and said, "why should I study that hard, only to have my job go to a foreigner?" and then they prepare to go to Law School instead. American students, the ones that could have gone to engineering school, are not dumb, but they don't want to waste their effort either.
It is a fact that you get the kind of response that you encourage. We, as a nation, have be trying to stop our kids from going into engineering, and guess what, they are not going into engineering! Just like, if you tell them all about sex and hand them condoms, guess what they do? It really works the same way. If we valued engineering, then we would do things to make it a valued and worthwhile career. We don't.
Dr.D, thanks. Although I think Dr. Helen's husband, Glenn, favors H-1B, he wrote something that applies quite well to our discussion.
"America rewards people who cut pies not people who make pies."
DaveC..."trace this back to the '70s leftist radicals, who were very successful at demonizing the hard sciences and engineering as being the source of most of the world's problems"...there's a lot of truth in this, although some of the demonization actually goes back further.
From the late 1950s through maybe the mid 1980s, there was extreme demonization of mass-production manufacturing in many intellectual and journalistic circles. The "good manufacturing jobs" about which there is now so much nostalgia were then seen as boring, dehumanizing, and "anomic."
Larry - the leftist argument is that the pizza owner should take a pay cut to be altruistic to his wage slaves...
Yeah, and then they wonder why the owner decided to close the business because it was too much work for too little money...
Gentlemen and Ladies,
This situation is far more insidious than you give credit to. Let's see if I can't weave the picture I see.
Basically, it's not just the science/engineering that's getting hosed with too much supply and not enough demand. For instance, if you're a Law School grad, you'll be lucky to find a law job that earns 30k a year in a major city. It's just the mechanism that they used is different depending on the field(H1B for Sciences, the humanities/social sciences/Law where already being overfilled by Americans).
Basically, Washington made it so corporations here in the US have extremely cheap labor force(for their friends in major corporations and also a continuous supply of students for Academia) for the simple reason of greed of the top(and I don't mean small business owners but corporate officers of some major corporations, the top of the law profession, politicians, bureaucrats, lobbyists, professors, Higher Education Administrators, Union Leaders).
Basically, the top is cannibalizing this country's ability to create commodities and trade them so they can make some short term gains(and maybe make a de facto aristocracy). Basically, the the end result is a reduction of this country's middle class(professionals, small business owners) so that those who are born poor can never become part of the rich.
This is of course how this would work in theory. In reality, it makes those who where from middle class families incredibly angry when they can't land a middle class job. This gives a political base for demagogue politicians( Communistic or Fascistic) who promise these disenfranchised young money, freedom from their debt, and a "righteous" cause to fight for.
Yeah, and then they wonder why the owner decided to close the business because it was too much work for too little money...
But you see this gets to basic Communist ethics/morality. They believe that one man pursuing his own selfish interests comes at the expense of others(i.e., pizza workers working for min wage). In an ideal society, we would all work for the great harmony of the greater good and worship Big Brother.
It's just another evil conspiracy to increase military recruitment. Hey kids...We have a great job for you here in the Army.
truth is out of style is a song and video from mc 900 ft. jesus. check it out. mc 900 ft. jesus handles the truth as most of america sees it.
where did the middle class come from in the first place?
jobs created by industry and the mechanisms of wars.
there is no real attack on the middle class conspiratorially, merely as an effect of the de-industrialisation of north america.
the invention of the car and the aircraft and the building of railways and industrial infrastructure pushed industry to new hieghts of production, producing millions of middle income jobs.
some of those jobs are shifting into services, but not enough to preserve the middle class as we have come to know it.
hamilton ontario has been a microcosm of the greater effect to come in north america, with poverty, crime, lack of jobs and the government`s weak attempts at re-education in the face of the greater picture occuring.
and i understand that many post-industrial cities in north america are suffering a similar fate.
places where cars and aircraft used to be made, i would guess.
this may be seen as simplistic to some,a nd not political enough for others, but the fact remains that we aren`t making cars and planes here with anything like the numbers we used to.
and everyone who still has a decent job drives a toyota, a lexus or an infinity...though i did just buy a chrysler, but i think it`s a mercedes in diguise.
My son is in this boat. Graduated high school last spring and can't even get interviews. (He has made the comment multiple times that "the problem is that I'm not a pretty girl.")
One huge factor in this is the worship of university as an avenue to wealth, yet there are many jobs, some good paying, that simply require learning a trade that can't be taught in college.
(Incidentally, I can't be the only one fed up with MBAs who drop into management positions and totally fuck up companies.)
Joe, It's true. Women bring a value to a company that a man cannot bring: women reduce regulatory risk. That's worth money to a company. Add in the looks factor, and it just gets worse.
A man cannot compete with a woman in the workforce. Women have the laws on their side, and most men on their side too.
Disengage. Your son should start his own business, avoid hiring women, and just move on.
Men can't win. You have to find a pace on the edges so you can eek it out.
I'm gonna play devil's advocate on Fred's side for a moment. Can a small business owner step forward to PROVE that the higher minimum wage forced him to lay off employees that wasn't motivated out of greed?
You have pre-supposed a leftist/ socialist Utopia, where profit and greed do not matter or exist. And, that is why socialism invariably fails. It postulates that man is easily perfectable (if under sufficient duress, which is one reason that socialism breeds totalitarianism). But man is, by his very nature, greedy and self-centered. And that is why capitalism works, and socialism does not.
So, yes, the owner of the pizza place lays off one or two minimum wage employees (when the minimum wage is increased) in order to keep taking home enough money to support his family. Yes, that is greed, and that is being self (or at least family) centered. And, yes, that is human nature. But also keep in mind that ultimately the owner of that pizza place will shut down his business and do something else, if he can't make a living running that business, and that will lay off even more people.
As some above have suggested, what is esp. insidious about minimum wage increases in the midst of a major recession is that those are the entry level jobs that kids need to get started in the work force. Not to support a family on, since they pretty much live communally at that age, either with their families, or other (hopefully) singles. But to get started.
I would guess that many of us here started that way, with minimum wage jobs, and then slowly at first working your way above that. I can remember my minimum wage jobs, and then how happy I was when I made another $.25 an hour. Then $.50, then $1.00 an hour above minimum wage. After college, I worked at a ski area for the winter, starting just above minimum wage. But I was so excited in late spring when I was able to bump my pay by $.25 an hour several weeks in a row by threatening to quit before the end of the season (since a lot had already done so). And, then one day, I found myself making $5, and even $10 an hour more a year, year after year. (Not all that hard, any more, as my California billing rate nears $400 an hour, though most of my work is still in the mid to lower $300 range).
The other thing to keep in mind is that raising the minimum wage also compresses the wages of those earning just above the minimum wage. Yes, their wages get pushed up a little bit, as a result, but typically not as much, resulting in a smaller differential. This also puts people out of work.
Finally, the absurdity of ObamaCare is that it is precisely those who are entering the work force who are going to be hurt worse (except for those on Medicare, etc.) by the current plans. Why? These people entering the work force constitute a large percentage of those who don't have health insurance, and don't have it because they really don't need it. So, we are going to force them to buy something with their minimum wage jobs that they don't need, at a time when they can least afford it. And, of course, if there is an employer mandate involved, that just means another cost of employment, further pushing people with lower marginal utility to the businesses out of jobs.
greed? i think we have to use a different word for the need for people to store more than they can use.
common sense.
rainy days are here.
the reason why some survive during difficult times it that they plan for them to happen and make provision.
cutting back on creeping minimum wage positions is mostly done to save the ability of the company to function....not so the owner can buy another ferrari.
as regulations on small business become more stringent, small businesses will disappear.
simple rule; tax something and it eventually disappears.
let`s face it, the word tax means to limit, to burden or to tire. why call it that unless that`s what you plan to do?
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