Wednesday, July 14, 2010
Why Can't America Create Jobs?
Here are two very interesting (perhaps jaw-dropping) charts, the first from Daniel Indiviglio, and the second from Scott Winship.
The second one is a more concise summary of the issue. What does it say? That there are six unemployed job-seekers for each job opening in the States today.
Consider that, for a moment - in light of the people you perhaps know or have heard of who are trying desperately to find not even a career, but just work, and have been for months or years. The numbers suggest simply that there's not enough work to go around: the demand for jobs vastly exceeds their supply.
Why? The chart barely begins to tell the deeper story. For decades now, we've been replacing real jobs - those where skills can be renewed, benefits earned, and dignity gained - with McJobs: rote, formulaic tasks, where people are cogs in giant organizational machines. The purpose of these vast engines? Churning out endless reams of toxic junk - not meaningful, awesome stuff.
What this chart really shows is the decline of a Ponziconomy - one unsustainable in its deepest sense. It "prospered" by dehumanizing its "workers", literally stripping them of wealth. So, today, the tables have finally turned: stripped of wealth, those same people can't create enough "demand" to fuel the Ponziconomy - hence, jobs crisis.
On the other side of the world, the opposite effect is being felt. In China, workers are gaining bargaining power, and a middle class is rising. But this is a zero-sum game, not a sustainable prosperity: one middles class vanishes, another rises in its place. Just as America is learning, the hard-way, the limitations of industrial age capitalism, so China inevitably will have to deal with its own crisis of false abundance, and the chronic capital and labour misallocations that are its aftershocks.
That's why: it's time to reboot capitalism. What this great crisis of labor really is? A transition from one stage of capitalism to the next. The charts show, literally, the economy shedding the skin of the industrial age - one struggling to undergo a metamorphosis. The next evolution? As I've been discussing, it's one where work, life, and play are organized in radically better ways, to achieve a higher purpose, and do meaningful stuff that matters the most - to fuel a more authentic prosperity.
America needs to understand that 'Human Capital' is the biggest asset for a company.
Shocking yet eye opening article.
Many would suspect that 'reboot' is a euphemism for 'world war'.
What we fail to learn from history is that we are doomed to repeat it.
A reboot simply wipes the slate so Homo Sapiens can perform another iteration extremely similar to the last.
We insanely hope for different results, but that prospect occurs in geological time, when our bodies have become drops of crude oil beneath the ocean (may they never be so recklessly exhumed).
The US Constitution was a good effort to overrule our DNA, but it still took only three years after the ink had barely dried for Congress to unconstitutionally import the monopolies of copyright and patent from the old country.
The pinnacle of our power is not the preservation of individual liberty, but the Frankensteinesque harnessing of it into the creation of immortal golems we call corporations - already ascending in the legislature above mere mortals into superior beings.
A reboot may well be imminent (and considered by some as necessary), but it would be better (less 'interesting') if we could remedy the corruption a little less violently. Unfortunately, as with so many revolutions, the means of forestalling them are known to those in a position to apply them, but only preferred in hindsight.
Unless we start creating real value, we'll keep trending towards the center of a less-than-zero sum game. This will lead to a much lower standard of life for the haves and less of an increase for the have nots then one might expect. Gains by China's workers will be short lived as companies will look to farm the work out to cheaper locales until there are no greener pastures left. (Imagine the unrest in China that would be fomented by a mass exodus of manufacturing concerns.) And then what?
Alternately, we could start creating value as Umair has proposed, thereby creating a rising tide which buoys us all.
Personally, I'll vote for the latter option as I'd rather not be around for the final act of the former.
On top of the fact that there are 6 unemployed workers for every job opening, there are thousands of employed workers looking at that same opening. According to CNN's article, if you are unemployed, to a lot of companies you are merely trash, not to be interviewed or considered for the position.
Hard to stimulate an economy when the unemployment rate is so high and it's nearly impossible to get a job.