Peter S. Goodman states in his New York Times article, "Despite Signs of Recovery, Chronic Joblessness Rises," that there are millions of Americans unemployed and they have spent most of their savings. This new poor class comes from the American middle class which is accustomed to the comforts afforded by its society. The new poor class is now forced to rely on public assistance for now and the undetermined future.
Not Enough Jobs Being Created
Economists say that it takes 100,000 new jobs a month just to take care of the new job entrants into the labor market. Unfortunately, there are currently over 15 million existing people unemployed in the U.S., states Goodman.
A big reason for the scarcity of jobs is the way businesses and corporations are being managed these days. Most corporations take their marching orders from their board of directors who are directed by their shareholders to show a profit. This means payrolls are often cut. Unions have lost their power and presence in many industries. Part time and temporary workers are being hired to meet additional production demands.
Additionally, jobs in factories and white collar work are outsourced to Asia and South America. Most significantly, automation has cut 5.6 million jobs since the year 2000, points out Goodman. These were the kind of jobs for which low skilled workers received middle class wages.
Job Growth is on the Decline
During the 1950's, 60's and 70's, the economic expansion produced approximately 3.5 percent job growth annually, according to a study of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During the 1980's and 90's, jobs grew 2.4 percent annually. This last decade showed job growth decline to 0.9 percent annually.
34 million people were hired into new jobs in 2000 according to the Labor Department figures. During the recession of 2001, hiring for jobs fell off to 31.6 million. In 2003, the economy was picking up, but hiring fell off to 29.8 million. This was a jobless recovery.
Job Prospects for the Future Don't Look Great
Goodman mentions the fact that normally an economy that recovers from a recession is led by homebuilding, banking and automobile industries. This doesn't appear to be the case this time. Homebuilding is in a decline. People aren't buying houses these days. The depressed economy and the negative impact of foreclosures certainly hurts homebuilding.
The banking industry isn't getting any more buyouts from the government. Most banks are not giving a great deal of credit to small businesses which hurts job creation. People simply don't have the buying power or confidence to buy many new cars these days. With the primary industries, which normally lead the economy out of the recession, in stagnation, it is unlikely new jobs will be coming soon.
Job prospects for older less educated people are not good. Employers often feel that older unemployed people have a disadvantage of not being current in technical skills, which are required in today's competitive work force.
A New Poor Class is in the U.S.
The Great Recession has created a new poor class in the United States. This new poor class consists of former middle class citizens that have both age and low work skills working against them. Additionally, the social economic structure of America is changing dramatically. That is, globalization, automation, outsourcing and corporate shareholder pressure for profits are contributing to the creation of a new poor class in America.
John A. Marinchek - John is a student and writer of Social-Economic issues, the Human Potential movement, and Martial Arts. His specific interests deal with ...
