Confront the brutal facts of your current reality,
but never doubt that you will prevail
—Admiral James Stockdale,
Viet Nam POW for eight years
Michael is fifty-four today. He is a cashier at Target and the guy he’s checking out wants to know what it’s like to work there. “It’s just fine,” he said, smiling ever so slightly. He is asked this several times a week, usually by someone who looks about his age. He’s worked for the company part time for over a year now, and is no longer surprised at the question.
Two years ago he was called into the office of his boss at the construction materials manufacturing company where he was a middle manager and told that his job was being eliminated. His choices were termination with six months pay, or he could stay, becoming a part timer in the customer service center. He would get about half his present pay and lose his health care plan and company contributions to his 401k. It was Friday and he was told to think about it over the weekend and let the boss know his decision on Monday.
Shaken, he went home and told his wife. He had no idea what the job market was like for someone his age with his skills, but what he’d heard was not encouraging. He decided to take the part time job, figuring he’d buy time to find a full time job elsewhere. Twelve months later, having sent out dozens of unanswered resumes and followed up every possible lead, he gave up and settled for a second part time job. Now he works sixty hours a week in two part time jobs, pays for his own health care, and has no idea where this is leading. It is certainly not taking him to a comfortable retirement.
And yesterday he heard that the U.S. had added 236,000 jobs last month and that the unemployment rate had dropped to 7.7%. How had he managed to miss out? What was he doing wrong?
Nothing. The job report is bullshit. The economy added 446,000 part time jobs and lost 276,000 full time jobs. There is other math involved, but the net of it is that almost all of the job growth came in part time jobs and, insult to injury, a big chunk of the growth of the part time jobs number is redundant–it’s jobholders with multiple part time jobs. So, our guy is just an early participant in a growing phenomenon–downsized middle agers doing the work of two teenagers to scrape by.
For years, I’ve written about the coming deflationary depression with a detached attitude, but no more. For many, it is already here and it has no end game other than to play itself out with the pain likely to ultimately touch almost every family in the land. The Dow Jones Industrial Average exceeded its 2007 high this week. So did the number of people unemployed–12.3 million versus 7.2 million in ’07. There are more Americans on food stamps–47.7 million vs. 26.9 million at the old high. How do these numbers improve? They don’t anytime soon.
The most obsolete thing in the economy is the job market for average people with average skills. It is on its way to zero. Automation, robotics and computer based artificial intelligence are taking over not only mundane work tasks, but processes of ever increasing sophistication. Robots don’t need time off, health care or retirement programs.
But, robots are not consumers, either, and seventy percent of the country’s economy is based on the consumer. No jobs, no consumers. No consumers, no economy. How do you get out of that dilemma? I have no idea, other than to raise extraordinary children, hoping they can compete in what promises to be a vicious work environment for much of their lifetimes.
Now you ask me why I write about this without offering solutions. I do so because identifying what I believe is our brutal current reality starts us on the way to assessing our individual situations so that each of us can try to figure out what to prepare for.