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Out of Work: Transitioning to a Post-Employment America

Russell Sunshine

April 1, 2014

Category: Society > Government and Politics

Most nightly news analyses assume that America's high post-recession unemployment rate is temporary and fixable. But what if it's neither? What if, instead, America's new normal is permanent, increasing unemployment? Before dismissing this scenario as a dystopian fantasy, let's consider an accumulating body of evidence.

The non-working portion of America’s labor pool of 18-to-64-year-olds is already far larger than commonly recognized. The Government's 7% unemployment figure merely encompasses persons without work but available and actively seeking employment. If we add to that core group the laid-off workers no longer job-hunting, the disabled, and persons only able to find part-time positions, plus adult students and the incarcerated, then the current share of non-workers in the labor pool swells to three or four times the conventional benchmark.

With a quarter of working-age Americans already employed less than full-time or not at all, that portion is likely to significantly expand in the near term as the direct result of major employers' strategic plans:

  • Employers are racing to adopt and adapt automation in assembly-line manufacturing, travel and transport (trip booking, vehicle navigation, traffic control), finance (securities markets, on-line banking), armaments (drones, cyber warfare), and retailing (on-line shopping, just-in-time inventories, customer service).
  • Globalizing American companies are outsourcing manufacturing and back-office services to low-wage foreign platforms.
  • Simultaneously, these companies are hiring low-wage immigrant workers in place of more costly U.S. citizens, to perform millions of stateside jobs. Agribusiness is only the most prominent sectoral example. The hospitality, food-services, construction, and waste-management industries are equally, if quietly, promoting this shift.

All these technological and managerial initiatives increase corporate productivity and profits. But they do so by deliberately reducing and replacing blue- and white-collar American labor. No economic interests with comparable clout are countering this job-shrinking corporate pressure. Historically potent unions today represent only 7% of private-sector American workers.

To be sure, new well-paying American jobs are being advertised daily. But many of these are specialized positions in high-tech, low-labor-intensive industries. Nationwide, employers consistently complain that applicants lack necessary qualifications to fit the jobs on offer. Lending credence to this complaint, more than 70% of the graduate students enrolled in American universities in the STEM disciplines best qualifying candidates to compete for these plum positions are foreign nationals. For most Americans, a university diploma is no longer an assured ticket to a job, much less a career. 

This quick sketch of unemployment’s present scope and future potential has limited its focus to the labor pool. But America’s population also includes pre-employment youth and post-employment retirees. Already, unemployed members of the labor pool, when combined with those youth and retirees, constitute a majority of total citizens. When the above employers’ strategies plus seniors’ expanding numbers are factored in, it’s not unrealistic to project a near-term future in which that non-working majority increases to two-thirds or more.

As explored in a companion piece, this projected transition could have positive, as well as negative, socio-economic impacts. But its public-policy implications are volcanic.