Friday, September 7, 2012

Where Do We Go From Here?

The Middle Class was mentioned repeatedly this week at the  Democratic National Convention. The subject will be BIG during the upcoming debates, as well it should. See my August 30, post. Both parties are in continual test-mode regarding this group because the election will come down to how, in mass, the middle-class/middle-income/middle-something segment of society votes.

The middle-class, jobs and job creation are the themes for this campaign. I get irritated and a bit ill listening to all the battering taking place over job creation numbers as if they were frequent flier miles or casino player's card bonus points. Pathetic.

This is new territory. Obama came in on the shock waves of the late ' 07 plunge. Since then the depth and severity of the situation have hit home, crossing over established social boundaries like the tsunami wave that swept across the countryside in Japan. Neither party should assume they've got a lock on how all of this is playing in Peoria.

Also hitting the media outlets this week was Labor Department's report on productivity during the second quarter. reviewed the report focusing on increases in productivity and company profits but not hiring, indicating businesses are getting more out of existing labor, capital goods and cash resources.

Companies, especially the very large, are sitting on lots of cash. Common wisdom has it they're reluctant to hire until things improve, which I guess makes sense. But don't overlook the fact that these companies have found ways to stay afloat and amass large cash piles without adding any more employees than is absolutely necessary (think automation, digitization and outsourcing).

This got me thinking and digging (again) concerning jobs, the plight of the middle-class and the housing bubble. Since the early ' 80s, computers, technology and digitization have steadily crept in resulting in thousands of disappeared back-in-day jobs, think:

- Websites/blogs and newspapers/journalists
- Online education and teachers/classroom educators
- Email/PayPal and postal workers
- FedEx/UPS (early tech innovators) and postal workers
- TurboTax and accountants
- Automated ticketing/tolls and public transit workers
- ATMs/online banking and tellers/bankers
- Online purchases/shopping cart websites and retailers/retail workers
- Web-based travel booking and travel agents/the entire airline system
- And on and on

Paradigm shift anyone? Seriously, where do we go from here?

There are so many factors contributing to the twenty or so percent of the workforce now out of work, under-employed or discouraged, a few:

- Digitization and automation
- People doing it themselves using technology (see above)
- Boomers remaining in the workforce waaaaaaaaaaaay longer
- An educational system that (apparently) doesn't produce what's in demand
- Outsourcing, globalization and the perpetual search for lower and lower costs
- Shock of $7 trillion in vanished home equity (consider 2011 GDP = $15.09 trillion)

Travel well.
John Jeffrey Lundell

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