Never again will traditional industries sustain the whole middle class. But the new jobs in old trades are smarter—and pay better—than in 1980
…blue-collar workers have taken a beating, but what remains of them is more sophisticated, more skilled…
—Wired Magazine, June 2011
Mave is a lovely lady because she just is. And, she can afford it. “I went to work for the phone company after high school,” she says, “It was never a glamorous job, but, oh, do I love my pension check!” Time was when everyday grunt work at a fortune 500 company brought with it job security and a nice pension at the end of the line for millions of average Americans. In 1980, eighty percent of American workers were employed by corporations. The numbers have declined every year since then, and the cradle-to-grave care of lifelong employment is gone from the scene.
What are the chances that corporate employment returns to 1980 levels? None. The economy’s renaissance is unlike anything that we’ve ever seen. The strength in corporate profits today is due largely to the elimination of “average” jobs and “average” employees from the employment base.
The change is happening in every sector, including the most basic industries. Even cotton production is rebounding in America. Wired reports that one farmer in America today can plant, tend, and harvest the same number of acres as some 800 farmers in India, China, or Africa. He plants new versions of seeds every season. These are hybrids developed by Bayer and Monsanto to produce fluffy fibers requiring little water. The chemical companies employ 29% fewer workers than they did in 1980, but the workers make 62% more money. Our farmer plants and picks the cotton using $700,000 combines manufactured by John Deere or Case IH. These companies have 52% fewer employees, but wages are 12% higher than 1980. Processing, spinning, Knitting and weaving and the finished textiles and apparel makers have similar situations: fewer, more highly skilled employees producing better products and making better wages.
The reality, then, is that jobs are good but scarce, and are going to people with very high capabilities. The result is segmentation in the labor pool between those who can master what Wired Magazine calls “smart jobs”, and a growing underclass of people who are unemployable at anything like what used to be an “average” paycheck. The older employees don’t have what it takes and the younger prospects need lots more education than the system now delivers.
It will probably take half a generation to work through this. Until then, consumption, which is seventy percent of the economy today, has nowhere to go but down. My reader, the real estate pro, says every shopping mall in the country is overstored.
You can try making a case for a bull market in stocks out of this situation if you want to. I sure can’t. Not for a while.
Meanwhile, the market tries to rally and economists, a fraudulent profession that needs to disappear-and soon, say silly things like, “If we get the deficit down, businessmen will be confident and start hiring again.” Bullshit. Mario has the ice cream shop in my neighborhood. “Mario,” I say, “You waiting for the deficit to go down to hire more kids for the counter?” “Geddoudahere,” he growls. “I’ll put more kids on when more ice cream eaters come through the door.”
Maybe Mario should take food stamps.
Jim Kunstler writes: “We need a financial convulsion to sweep away the accumulated debris of poor choices, false hopes, squandered resources, frauds, swindles, and lies. Such an event can’t help but set off a true political convulsion. Let the banks eat their own tails and strangle to death.”
It’s gonna happen. But along with the calamity, I look for reason to be restored in various quarters. I look for students at MIT and Harvard to realize that a job at Goldman Sachs might possibly make them rich, but it will certainly make them part of the bloodsucking, sociopathic financial sector that has bilked the economy out of billions. They will come to properly regard that as a disgusting career choice. Instead, I look for college students everywhere to do what they have done in past upheavals: split themselves between idealists who will set about with great energy fixing the educational system and scientists who will go to work in industry to make things instead of shuffling pieces of financial paper around. And, in doing so, make America a great place to be middle class again.