Hard looks at joblessness, retirement funding, and Generation Jones

Many members of “Generation Jones,” that span of late Boomers and early Gen Xers who are in their middle years, face tough times right now. This cohort has been hit especially hard by the ongoing economic crisis, with many losing jobs in mid-career and finding it difficult to obtain new employment and to save for retirement.

Decades ago, many Gen Jonesers confronted a rough economy while launching their work lives. During the late 70s and early 80s, the economy was in severe recession, inflation ran very high, and employers were cutting back or eliminating pension plans. Academic studies indicate that graduating into a recessionary economy can impair earning power for years. So this group has been unlucky in terms of both entry-level and mid-life labor markets.

I concede my bias on this topic. I’m a member of Generation Jones, and these realities are hitting many among my age group. As the following pieces indicate, we’ve got a lot of work to do in order to rebuild both opportunity and a safety net. Here goes:

Huffington Post: Why Worrying About Retirement Is Actually A Luxury

Ann Brenoff, blogging for the Huffington Post, says that she’s bombarded by advertising appeals from retirement planners, but the real problem is that most people lack sufficient funds to invest for retirement, period:

My inbox is bombarded daily with pitches from retirement planners who claim to hold the secret to my “dream retirement.”

…Here’s the problem I have with them: They ignore the elephant in the room, which is, it’s too late for most boomers to join their party. Spending less and saving more — if even possible — won’t close the gap between what we have and what we will likely need.

…What I don’t understand is why everyone isn’t talking about the crazy awfulness that awaits us — and by us I mean the vast majority of people who are woefully unprepared for retirement.

New York Times: Retirement May Be Even More Expensive Than You Think

How much money do we need to save for retirement? Paul B. Brown, writing for the New York Times, discusses a new book by finance professor and investment expert Richard C. Marston, Investing for a Lifetime:

Although Fidelity Investments garnered a lot of attention two years ago when it declared that you would need eight times your current salary to “meet basic income needs in retirement,” Mr. Marston disagrees. “Despite the fact that it is very difficult to save eight times income, the goal the company proposed seemed too low to me,” he says.

If you thought eight times current income was daunting, Mr. Marston’s default position will stun you. He says it can easily come to 15 times what you are earning now.

Okay, so Prof. Marston recommends saving fifteen times one’s current income?! Only the tiniest percentage of U.S. workers have retirement portfolios on track for that. The gap between the realities facing most Americans and the numbers being recommended by personal finance experts is bonkers, simply mind blowing.

Next Avenue: Reflections From The “Over” Generation

Kevin Kusinitz is a 58-year-old writer who has been unemployed for nearly two years. In this piece for Next Avenue, he reflects upon being part of an age group being passed over for jobs but too young (and broke) to retire:

Like a lot of people around my age, I really didn’t pay close attention to the unemployment situation until I was in the thick of it myself. It was only then that I started reading the heartbreaking stories of perfectly good workers in their 50s who, like me, were shown the door by middle managers all apparently sharing the title: Executive Vice President of Keeping My Own Job by Any Means Necessary.

After decades as a right-of-center kind of guy, I was shocked to wake up one day thinking, “Oh my God, now I know what Michael Moore has been talking about all this time.”

…I’m no sociologist but I predict if this trend keeps up (and, frankly, why shouldn’t it?), the next decade is going to see a spike in older people moving in with their adult children, becoming homeless or even committing suicide because they will have no other options.

Harper’s: The End of Retirement (subscription necessary)

Jessica Bruder, writing for Harper‘s, explores the subculture of older American workers who have lost steadier jobs and who now roam the country in vans and camping vehicles in search of extended part-time work such as seasonal tourist sites and warehouse gigs. You’ll have to get a copy of the August issue or subscribe to access the online edition, but here’s the lede from her story:

On Thanksgiving Day of 2010, Linda May sat alone in a trailer in New River, Arizona. At sixty, the silver-haired grandmother lacked electricity and running water. She couldn’t find work. Her unemployment benefits had run out, and her daughter’s family, with whom she had lived for many years while holding a series of low-wage jobs, had recently downsized to a smaller apartment. There wasn’t enough room to move back in with them.

“I’m going to drink all the booze. I’m going to turn on the propane. I’m going to pass out and that’ll be it,” she told herself. “And if I wake up, I’m going to light a cigarette and blow us all to hell.”

Her two small dogs were staring at her. May hesitated — could she really envision blowing them up as well? That wasn’t an option. So instead she accepted an invitation to a friend’s house for Thanksgiving dinner.

Associated Press: Where have all the missing American workers gone?

Tom Raum, writing for the Associated Press, examines the flattened “workforce-participation rate”, i.e., the total number of employed + job seekers, and reports that many of the long-term unemployed are simply dropping out of the labor market after efforts to obtain jobs have been repeatedly unsuccessful:

But perhaps the most significant factor is unemployed workers “who just drop out of the job market after one, two or three years of looking for work and not being successful,” said Carl Van Horn, a professor of public policy at Rutgers University who studies workplace dynamics and employment trends.

Recent surveys suggest more and more long-time unemployed workers are abandoning the search for another job and leaving the nation’s workforce.

“And they are disproportionately older workers,” Van Horn said. “We have a large number of older (unemployed) workers who are not old enough to retire, yet they are facing discrimination in the workplace and have found it nearly impossible to get another job.”

YES! magazine: Why Social Security’s Not Going Broke: A Nonhysterical Look at a System That’s Working

Is the Social Security system about to go under? You might believe so if you listen to hard right pundits who demonize anything to do with a government safety net, but in reality Social Security is doing much better than many private and public pension and savings plans. This article in YES! magazine offers a more sensible look at the situation. In an excellent set of infographics, managing editor Doug Pibel explains that the Social Security Trust Fund has sufficient funds to pay out expected benefits for the next two decades and that relatively manageable tax fixes can ensure its longer term viability:

Social Security will never “go broke.” As long as people are working, Social Security will have money. . . . There is now $2.8 trillion in the Social Security Trust Fund, which will fully cover expenses for about the next two decades. To make it work after that is pretty painless — we just have to decide who pays.

FiveThirtyEight.com: Cutting Off Emergency Unemployment Benefits Hasn’t Pushed People Back to Work

So far, Congress has refused to extend unemployment benefits for the long-term jobless, a policy choice that disproportionately affects older individuals who have been experiencing severe difficulties re-entering the workforce. In a piece for FiveThirtyEight.com, Ben Casselman explains that arguments against such an extension aren’t panning out:

The case against extending unemployment benefits essentially boils down to two arguments. First, the economy has improved, so the unemployed should no longer need extra time to find a new job. Second, extended benefits could lead job seekers either to not search as hard or to become choosier about the kind of job they will accept, ultimately delaying their return to the workforce.

But the evidence doesn’t support either of those arguments. The economy has indeed improved, but not for the long-term unemployed, whose odds of finding a job are barely higher today than when the recession ended nearly five years ago. And the end of extended benefits hasn’t spurred the unemployed back to work; if anything, it has pushed them out of the labor force altogether.

AlterNet: The Terrible News Economists Are Trying to Hide About American Jobs

The so-called economic recovery isn’t that for millions of Americans. Long-time populist political commentator Jim Hightower takes issue with, among other things, the positive spin being applied to new jobs created since the worst of the meltdown:

So, it’s interesting that the recent news of job market “improvement” doesn’t mention that of the 10 occupation categories projecting the greatest growth in the next eight years, only one pays a middle-class wage. Four pay barely above poverty level and five pay beneath it, including fast-food workers, retail sales staff, health aids and janitors. The job expected to have the highest number of openings is “personal care aide” — taking care of aging baby boomers in their houses or in nursing homes. The median salary of an aid is under $20,000. They enjoy no benefits, and about 40 percent of them must rely on food stamps and Medicaid to make ends meet, plus many are in the “shadow economy,” vulnerable to being cheated on the already miserly wages.

WBUR: Amid, Long-Term Unemployment “Crisis,” MIT Project Lifts Jobs Seekers

MIT’s Institute for Career Transitions conducted a pilot project to coach and advise the long-term unemployed, with hopeful results. In order to measure the potential benefits of providing this assistance, the three-month project included a group who received help and a control group who did not. WBUR’s Benjamin Swasey reports:

Long-term unemployment — which, according to [MIT professor and Institute director Ofer] Sharone, disproportionately affects older workers — is at 2.3 percent of the nation’s workforce, a historically high level. More than 38 percent of America’s unemployed job seekers have been out of work six months or more.

. . . “We have a ton of studies showing that once you hit the six-month [jobless] point, by so many indicators it becomes a real crisis,” he says. “It’s a financial crisis. It’s an emotional crisis. And then when you get to this scale of numbers, it’s a social crisis. We’re losing out on a whole cohort of workers.”

. . .Of the group that got support, 30 percent obtained a full-time job or contract work of at least four months. That compares to just 18 percent from the group that received no aid.

“It clearly shows that the job market is very, very tough, even for someone in an ideal situation,” as “most people did not get jobs,” Sharone says. “On the other hand, I think we can say that there’s a meaningful difference to getting support.”

Boston GlobeHow will historians view us? (registration may be necessary)

How do the challenges specially facing this age group connect to other social and economic policy issues? Here’s one article that helps us to grasp the bigger picture: In an op-ed piece for the Boston Globe, writer Neal Gabler predicts how historians of the future will regard the current American era, and his assessment is not a positive one. Here are a few snippets:

Historians will wonder…how the gains of social and economic equality that were a century in the making were reversed, and, above all, how the country actually became less democratic, often with the acquiescence of many ordinary Americans.

The first thing historians are likely to fasten on is the historic economic inequality in America today.

…They will look at the nation’s…reluctance to embrace health reform that would provide insurance to those who cannot otherwise afford it, its willingness to cut benefits, like food stamps, that primarily help the young and the elderly, its grudging extension of unemployment benefits to people afflicted by the economic downturn.

…I suspect that historians will view this as a terribly bleak period — another Gilded Age but worse.

…And they will wonder: Why there was so little resistance?

What to do???

If any of these articles offered clear-cut, comprehensive solutions to the crisis, I would be highlighting them. Unfortunately it appears that we’re flying without radar here. Furthermore, as Neal Gabler’s Boston Globe piece suggests, I don’t think the American public is sufficiently aware of the systemic nature of this crisis to be able to connect the dots in ways that lead to political consensus. Right now, employment and retirement remain individual challenges rather than shared priorities, reflecting the social and political ethos in which Gen Joners have spent their adult lives.

I do think that reorienting our views on community and society is an important, necessary start toward addressing the situation. Last week I wrote about competing visions of the future, one being a “technological, top-down, service society,” the other being a world of “useful work, peace, self-fulfillment, and appropriate technology leading to harmony with the environment.” We need this latter view to take hold if we are to reverse the rampant individualism and selfishness that soon may resemble passengers on a sinking ship fighting over too few spaces on the lifeboats (with a small few already having reserved seats). Either our better natures will rise to the occasion, or history will judge us harshly, and deservedly so.

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Related posts

I’ve been writing about the burgeoning retirement funding crisis since the first year of this blog. Go here to start scrolling through those articles. In addition, here are three pieces especially relevant to this post:

The three-pronged political attack on the very notion of retirement (except for a few) (2013) — “In America, the very notion of a relatively safe and secure retirement is under relentless attack…. This is not by accident. Only when you connect the dots do you see a unifying force, and it’s very, very political. We haven’t been comprehending how the pieces come together….”

My Labor Day 2013 wish: Good, stable, bully-free jobs for Generation Jones (2013) — An extended commentary, echoing many themes raised here, covering topics such as age discrimination, workplace bullying, and mental health impacts relevant to Gen Jonesers, as well as potential public policy responses.

Suicide and the Great Recession: Will we heed the tragic warnings? (2013) — “In this era of the Great Recession, suicide has become a leading cause of death in America, especially among the middle-aged, and it is to our shame as a society that this reality is not an ongoing, dominant focus of our attention.”

Blog subscriptions

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Exorbitant student loan debt: The biggest “duh” crisis ever?

Natalie Kitroeff reports for the New York Times on the impact of student loan debt on the ability of graduates to rent or buy real estate in New York City:

For young people, moving to New York City hasn’t made much mathematical sense for decades. The jobs don’t pay enough, the internships don’t pay at all, and the rents are prohibitive by any sane standard.

But now add a new economic fact of life to that list: soaring student loan debt. More students are taking out bigger loans than ever before, and in the last 10 years alone, education debt tripled, reaching over $1 trillion. A record number of college students are graduating knee deep in a financial hole before they begin their adult lives.

She adds that some big-name economists are weighing in on the broader implications for the economy:

Economists are worried. Last month, former Treasury Secretary Lawrence Summers said that student loan debt was taking the life out of the housing recovery, and the Nobel laureate Joseph Stiglitz called the rising debt “an educational crisis” that is “affecting our potential future growth.”

I’m not criticizing the article — a good piece that includes profiles of recent graduates struggling with NYC’s real estate market and their student loan payments — when I say this:

We are at least two decades late in labeling the student loan debt situation a “crisis.”

Today, you’ll find plenty of news and commentary covering the student loan debt crisis. Elected officials are considering policy options as well. But the problem was in the making years ago, and the implications were clear to anyone who was paying attention.

In the 1980s, tuition levels began to soar above the rate of inflation, while grants and scholarships gave way to student loans as the primary form of financial aid, often at high interest rates. These trends continued largely unabated through the current economic meltdown.

Yeah, I take this one a bit personally. Over the years I’ve experienced a lot of eye rolls and sighs in faculty meetings when I’ve warned about a looming crisis in student loan debt and the role of legal education in stoking it. I’ve also been vocal on the impact of heavy debt on graduates who want to enter public service.

As with most overlooked crises, so much of the damage already has been done, placed on the shoulders of heavily indebted graduates. We’d better act quickly and meaningfully if we want to stop this one from getting even worse.

The dignity of a living wage

Across America, labor activists and other progressives are calling for a higher federal minimum wage, often citing the personal financial challenges that confront low-paid retail and fast food workers. The current minimum wage is $7.25/hour, though some states have adopted a slightly higher one. Advocates are calling for a new minimum wage ranging from $10.00 to $15.00 an hour.

Whenever a minimum wage hike is proposed or debated, opponents claim that doing so will reduce jobs. At the far end of that spectrum, virulent opponents of any minimum wage law claim that such government mandates are “job killers.”

Yes, I suppose if you got rid of the princely $7.25/hour minimum wage, you could take the same hourly rate and pay three people $2.00/hour and still have a $1.25/hour as a bonus for the CEO. But that’s not “job creation,” it’s exploitation. Take away the minimum wage and you get a labor situation like that in Bangladesh, where wealthy corporations pay factory workers a pittance and subject them to dangerous working conditions. (After all, American factory jobs moved overseas to avoid paying workers good wages and benefits!)

Current minimum wage and low-wage earners often find themselves having to access public benefits such as food stamps to get by. The low minimum wage means, in effect, that American taxpayers are indirectly subsidizing corporations such as Walmart and McDonald’s and their shareholders by supporting living expenses for workers who can’t afford to live on their paltry paychecks alone.

Above all, we need to frame this debate in terms of human dignity. Okay, so maybe that high school senior from an upper middle class family who works part-time to earn spare cash can get by on $7.25/hour. But for those supporting themselves and others, a full-time job at least should pay for the basics. In fact, let’s remember that Congress’s intent behind enacting the federal minimum wage law during the heart of the Great Depression of the 1930s was to provide a living wage. It’s a shame that we have to invoke the hardship of our last systemic economic meltdown to remind ourselves of that.

My Labor Day 2013 wish: Good, stable, bully-free jobs for Generation Jones

On this Labor Day 2013, I feel a special kinship with those of my generation — late Boomers and early Gen Xers born roughly from 1954 to 1965, sometimes referred to as “Generation Jones” — who have been pummeled by this meltdown economy and who have faced age discrimination and bullying in their efforts to get jobs and keep them.

Journalistic set piece

Just last week, the New York Times ran an article by Michael Winerip that represented a common, set piece example of current American journalism, a profile of a once-secure middle aged worker for whom the bottom has fallen out. In this case it’s a man who was earning a very good salary as a mid-level executive for a supermarket chain, until he lost his job last October. While he was still working, he created a support group to help laid off workers get back on their feet. Now he’s taking part in the same group, except in a very different role.

And to make things worse? The man recently suffered a heart attack. Having lost his health insurance with his job, he now owes the hospital over $170,000 for a six-day stay.

Facts and figures

The Times article further gathers some key figures from the Bureau of Labor Statistics, showing that:

…while the economy may be improving, a substantial number of older workers who lost jobs — even those lucky enough to be re-employed — are still suffering. Two-thirds in that age group who found work again are making less than they did in their previous job; their median salary loss is 18 percent compared with a 6.7 percent drop for 20- to 24-year-olds.

The re-employment rate for 55- to 64-year-olds is 47 percent and 24 percent for those over 65, compared with 62 percent for 20- to 54-year-olds. And finding another job takes far longer: 46 weeks for boomers, compared with 20 weeks for 16- to 24-year-olds.

Age discrimination

There’s a ton of age discrimination occurring these days, but employers don’t have to worry much about facing liability. Here’s a piece of what I wrote earlier this year on this subject:

The Age Discrimination in Employment Act and its state law counterparts prohibit employment discrimination against job applicants and workers age 40 or over.

The excellent Next Avenue site recently ran a piece by Penelope Lemov titled “What It Takes to Win an Age Discrimination Suit,” but in reality it’s actually a sobering assessment of the difficulty of prevailing in such a claim.

Lemov notes that age bias claims have been on the rise since the economic meltdown in 2008…. Nevertheless, she aptly points out that “it has gotten harder and harder to win an age discrimination suit,” thanks to a combination of narrow interpretations of the law by federal courts and employers who are good at covering their tracks.

Bullied at work, too

Many middle aged workers who are fortunate to have jobs face what appears to be disproportionate levels of bullying at work. Earlier this summer I reported the results of a Workplace Bullying Institute instant poll that illustrates the problem:

The instant poll asked visitors to the WBI website who have experienced workplace bullying to respond to a single question, “How old were you when the bullying at work began?” WBI collected 663 responses and reported the following:

The average age was 41.9 years. Targets in their 40’s comprised 30% of all targets; in their 50’s were 26.4%; under 30 years of age were 21.3%; those in their 30’s were 18.9%. The prime productive years are also the prime years for being [targeted] for bullying.

Mental health impacts

The mental health impacts on middle aged workers have been significant on an individual and collective level. As I wrote last spring, suicide has become a leading cause of death for middle aged adults, and rising prevalence rates are correlated with the severe downturn in the economy.

Unfortunately, these extraordinarily disturbing statistics have rotated off of our news cycle, when instead they should remain front and center as an example of what these years have wrought.

A Gen Jones Agenda

I feel like a lot of people in my generation have been thrown under the bus, through no fault of their own. Unfortunately there is little recognition of this looming tragedy in the halls of government or boardrooms of America. If they want to start paying attention, an agenda awaits them:

First, we need more good jobs at good pay. Large corporations currently are sitting on piles of cash. Corporate America, you see, has recovered from the recession, and then some. But this bounty has not translated into the return of jobs. The choice is clear, as I wrote earlier:

It’s not as if we’ve run out of important, meaningful work that needs to be done. If corporate America and Wall Street won’t create jobs despite their abundant earnings, then let’s tax their wealth and use the proceeds to put people back to work, fixing our bridges and roads, building connective public transportation systems, educating our children, providing affordable health care, safeguarding our communities, and caring for our elderly.

Second, we need to revive the labor movement. Good jobs at good pay have never come by accident. They often are the result of worker advocacy and negotiating, and labor unions are in the best position to provide that needed countervailing power in the workplace.

Third, we need innovative programs to help the long-term unemployed transition back into the labor force, such as this pilot program described by Adam Wahlberg for MinnPost.com:

The City of Minneapolis said this week that it is partnering with a Connecticut-based group called The Workplace to launch a job-training initiative geared toward helping veterans and unemployed individuals age 50 and older.

Called Platform to Employment (P2E), the program, which started in Connecticut in 2011, is now in 10 markets, including Chicago, Dallas, and Denver. P2E is designed to provide life skills in such areas as financial counseling, resumé writing, self-marketing, and stress-reduction, over a five-week period, before placing enrollees in jobs for an eight-week trial run.

Finally, we need to strengthen our age discrimination laws and to enact the anti-bullying Healthy Workplace Bill to provide legal incentives for employers to act better. Too many aren’t doing so on their own.

Repairing the damage done by the last five years won’t be easy, but these measures will put us in the right direction.

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Note: I fully realize that my age cohort is not the only one to be heavily impacted by our current economic state.  In particular, I remain very concerned about the prospects of younger folks who are graduating with heavy student loan debt, only to be offered unpaid internships rather than decent entry-level jobs. I’ll continue writing about that during the months to come.

 

Witnessing the “split-screen American nightmare”

In a New York Times online op-ed essay, “Crumbling American Dreams,” political scientist Robert Putnam (Harvard) returns to his hometown to assess the current state of America:

My hometown — Port Clinton, Ohio, population 6,050 — was in the 1950s a passable embodiment of the American dream, a place that offered decent opportunity for the children of bankers and factory workers alike.

But a half-century later, wealthy kids park BMW convertibles in the Port Clinton High School lot next to decrepit “junkers” in which homeless classmates live. The American dream has morphed into a split-screen American nightmare. And the story of this small town, and the divergent destinies of its children, turns out to be sadly representative of America.

The rest of his essay describes a familiar set piece for middle America, featuring the disintegration of manufacturing industries around his hometown that once provided sources of steady, decent-paying jobs for high school graduates. The disappearing industrial base has translated into human want and suffering on a significant scale.

My hometown, too

I’ve seen a Port Clinton-type scenario before.

My boyhood hometown of Hammond, Indiana was a busy working class and middle class city during the 1950s and 1960s. During the heart of those years, the area’s steel mills served as a reliable source of steady jobs for (mostly male) high school graduates. And thanks to high demand for steel and to collective bargaining, it was possible to raise a family on a mill worker’s wages.

But all that started to change in the mid-to-late 70s, when the number of shifts declined and layoffs increased. By the time I left Indiana for the East Coast in the early 80s, the steel industry was gasping for its life. As we fast forward to today, Hammond and many surrounding towns and cities continue to struggle with the death throes of the region’s industrial economic base.

Purple problem?

Putnam first came to public attention with the publication of Bowling Alone: The Collapse and Revival of American Community (2000), in which he chronicled the decline of the country’s civic, religious, and political organizations and urged the renewal of these community bonds. This has become a defining theme of his work since then.

True to his other writings, in his Times piece Putnam is hesitant to assign primary blame for the economic gulf in our communities on the basis of politics, instead suggesting that more systemic, bipartisan forces have been at play:

The crumbling of the American dream is a purple problem, obscured by solely red or solely blue lenses. Its economic and cultural roots are entangled, a mixture of government, private sector, community and personal failings. But the deepest root is our radically shriveled sense of “we.”

Behind the “split-screen American nightmare”

While I agree that responsibility for our current condition must be shared among many stakeholders, I wish that Putnam would acknowledge that powerful political and economic forces have widened the gulf between haves and have-nots, cut away the middle class, and — to use Putnam’s words — hastened the “radically shriveled sense of ‘we’.”

As I’ve written before, evidence of societal inequality keeps piling up, and the economic “recovery” has largely benefited the most fortunate. Many thoughtful commentators have argued that the U.S. has become a plutocracy, a society in which the game is rigged for, and controlled by, the wealthy and powerful — at the expense of democracy, genuine opportunity, and a compassionate safety net.

Some might suggest that “plutocracy” is over the top. After all, even the poorest Americans live under conditions that millions of people in other parts of the world would gladly accept. Furthermore, upward mobility remains within the grasp of some, despite growing obstacles.

But the gaping wealth gaps cannot be ignored. Until we aggressively address the political, economic, and social dynamics creating these societal headwinds, we’ll be seeing many more modern-day versions of Port Clinton, Ohio, and Hammond, Indiana, during the years to come.

America’s economic meltdown continues for millions: Articles worth reading

The human costs of our ongoing economic crisis continue to mount. If your primary impressions of the economy are shaped by the rise in the Dow Jones Average, you might be wondering what I’m talking about. But for countless millions of others who are more concerned with the challenges of paying their bills, feeding their kids, saving for the future, and finding work, crisis remains an apt way to describe this economy.

I’ve collected a number of articles and blog posts that help us to connect the disturbing dots:

Bob’s cousin

Bob Rosner, blogging for Workplace Fairness Weekly, writes about “Broken Hearts: Unemployment’s Devastating Impact“:

Last week my cousin died of a heart attack. After working continuously for the first two-thirds of his career, recently he’d bounced from short term jobs to stretches of unemployment. This cycle is tough enough on someone just starting out a career, but for someone in their early 60’s, it can literally be a heartbreaker.

Read what he has to say about maintaining hope through the 4 “Ps”: perspective, pride, pals, and possibilities.

Profits over people — by a longshot

But hold on, it’s not as if our economy remains in complete meltdown mode. Nope, that just applies to the vast millions who are struggling to make ends meet and to secure decent work. Derek Thompson, business writer for The Atlantic, sums up the situation in meaty blog post:

Here are two things that are true about the economy today.

(1) The Dow Jones industrial average is poised to set a new record as corporate profits stretch to all-time highs.

(2) There are still fewer working Americans today than there were before the start of the Great Recession.

He goes on to explain:

When the economy crashes, we all crash together: corporate profits, employment, and growth. But when the economy recovers, we don’t recover together. Corporations rack up historic profits thanks to strong global demand, cheap global labor, and low interest rates, while American workers muddle along, their significance to these companies greatly diminished by a worldwide market for goods and people.

The forgotten

Although the official unemployment rate continues to improve very slowly, overlooked in those figures are the millions who are no longer included in the counts. Annalyn Kurtz reports for CNN.com:

An often overlooked number calculated by the Labor Department shows millions of Americans want a job but haven’t searched for one in at least a year. They’ve simply given up hope.

. . . These hopelessly unemployed workers have just been jobless so long, they’ve fallen off the main government measures altogether.

. . . Five years ago, before the recession began, about 2.5 million people said they wanted a job but hadn’t searched for one in at least a year. Now, that number is around 3.25 million.

The future of retirement

As I’ve written frequently here, the demise of retirement as a normal lifespan experience may be one of the longer-term effects of our economic condition. Steven Greenhouse, labor reporter for the New York Times, offers a thorough look at the future of retirement in the U.S.:

While retirement has assumed myriad forms across the country, many economists and other experts on retirement see some common, increasingly worrisome trends. A growing number of workers are convinced they will not have a comfortable retirement. A Boston College study in October found that 53 percent of Americans were “at risk” of being unable to maintain their pre-retirement standard of living once they retire, up from 30 percent in 1989. A study last May by the Employee Benefit Research Institute found that 44 percent may not have enough money to meet their basic needs in retirement.

Burdening next generations

As the cost of a college education continues to climb, student loan debt rises with it. Martha C. White reports for Time on the economic repercussions of massive student loan debt:

The broader economic implications are troubling. Graduates struggling to dig out from a mountain of student debt also tend to put off getting married, buying homes, and having kids. And since a bigger chunk of their income will go towards servicing the mortgages or car loans they are able to obtain at higher rates, they’ll have less spending power when they do eventually buy big-ticket items like homes and cars.

And that’s not even addressing the psychological impact of mountainous debt and reduced hopes. Cryn Johannsen of the Economic Hardship Reporting Project writes about the spectre of suicide in connection with student debt:

Suicide is the dark side of the student lending crisis and, despite all the media attention to the issue of student loans, it’s been severely under-reported. I can’t ignore it though, because I’m an advocate for people who are struggling to pay their student loans, and I’ve been receiving suicidal comments for over two years and occasionally hearing reports of actual suicides.

Inequality = more stress and illness

America’s wealth gap is widening despite the supposed economic recovery, reports Rick Newman for U.S. News & World Report:

The problem, however, is that the recession raised the bar for success while leaving fewer haves and more have-nots. America as a whole may be just as wealthy as it used to be, but the wealth is being shared by a smaller slice of the population. And that rearrangement may end up being permanent.

In this piece for BillMoyers.com, Theresa Riley interviews epidemiologist Richard Wilkinson, an authority on the destructive public health consequences of societal inequality:

The pattern we’ve found in our research is quite extraordinarily clear. More unequal countries, the ones with the bigger income differences between rich and poor have much more violence, worse life expectancy, more mental illness, more obesity, more people in prison, and more teenage births. All these problems get worse with greater inequality, because it damages the social fabric of a society.

The end of the American dream?

Joseph Stiglitz, a Nobel laureate in economics, assessed our economy in the context of the November election:

In this election, each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest — an inequality not only of outcomes but also of opportunity. To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying.

Stiglitz’s public policy prescriptions “include, at least, significant investments in education, a more progressive tax system and a tax on financial speculation.”

Goodbye to trickle-down economics?

The policies that led us to this widening gap between the haves vs. the have-less and the have-nots have been at least 30 years in the making, with “trickle-down economics” being the policy mantra of the era. This concept held that if wealthy people could keep more of their money and businesses could be freed of regulatory safeguards, the benefits would trickle down to everyone else. The centerpiece of trickle-down theory was that tax cuts to the wealthy would give a jump start to America’s economic engine, an assumption rebutted in a non-partisan Congressional Research Service report discussed in this Huffington Post piece.

If you’re interested in learning more, read some of these articles and start connecting the dots for yourself. We’re at a critical economic juncture in America, and the well-being of all but the most fortunate is at stake.

Exploited twentysomethings: It’s time for a meetup with the labor movement

If you’re a recent college graduate, you may be learning some harsh truths about the job market: Good entry-level positions are few and far between. More than a few employers are willing to take advantage of that fact by offering jobs at very low pay, requiring well in excess of 40 hours of work per week. The worst of them create postgraduate internships, many of which are unpaid, to squeeze out even more while paying less nothing.

In a recent piece for the New York Times about the employment challenges facing many twentysomethings, Teddy Wayne writes:

The recession has been no friend to entry-level positions, where hundreds of applicants vie for unpaid internships at which they are expected to be on call with iPhone in hand, tweeting for and representing their company at all hours.

“We need to hire a 22-22-22,” one new-media manager was overheard saying recently, meaning a 22-year-old willing to work 22-hour days for $22,000 a year. Perhaps the middle figure is an exaggeration, but its bookends certainly aren’t.

Good jobs at good wages

You may have heard the phrase “good jobs at good wages.” It refers to jobs that provide safe working conditions and respectable compensation.

America used to have a lot more good jobs at good wages, but they weren’t created by accident — and they certainly didn’t come about at the behest of benevolent employers.

Rather, it took the labor movement to turn not-so-great jobs into decent ones. How do you think provisions such as living wages, health care coverage, pensions, paid vacation days, and sick leave entered the picture for rank-and-file workers? It took unions engaging in collective bargaining to do it.

It’s how, for example, working in the steel mills went from being a tough job at low pay and few benefits to a still tough job at good pay and decent benefits.

And today?

It’s more than a coincidence that America’s wealth and income gaps are sky high at a time when labor union membership has dwindled to one of its lowest levels ever.

You may have some misgivings about unions. Fair enough. Like any other type of organization, unions are far from perfect, and some do much better by their members than others. And yes, being in a union means you pay dues and “give up” the right to negotiate with your employer individually.

But this doesn’t change the fact that unions represent the best way for many workers to join together and advocate for their interests as a unified, more powerful voice.

Your college education and upbringing may cause you to think that unions are for blue-collar folks who work in plants and factories, or perhaps for cops, firefighters, schoolteachers, and other public servants.

That’s what I thought too when I graduated from law school as a newly-minted, idealistic public interest lawyer working for the Legal Aid Society in New York City. But I would quickly learn that the Legal Aid staff attorneys’ union played a critically important role in bargaining over salaries, benefits, and working conditions. I eventually became an elected shop steward (i.e., union rep for my office) and played an active role in the union’s advocacy work.

Intern Labor Rights

This is why I’m delighted to see an emerging movement against unpaid internships borrowing tactics from organized labor, and adding a few twists of its own. In the process, these advocates are starting to make their case against this widespread, economically exploitative practice.

Intern Labor Rights, for example, is using creative advocacy campaigns and social media to spread the word. While not a union per se, Intern Labor Rights is showing what happens when groups of committed, energetic people come together to push for change that benefits the greater good.

Dilbert vs. Norma Rae

It boils down to this:

On the one hand, you’ve got the cartoon character Dilbert, who makes his humorous, biting observations about cubicle life that are so on target, yet doomed to result in more of the same because one person growsing alone is unlikely to change anything. That’s the case even if you graduated magna cum laude from State U.

On the other hand, there’s Norma Rae, the character played by Sally Field in the award-winning movie of the same name. Norma comes to realize that conditions in the textile plant where she works aren’t going to improve until workers unionize, and so she enters the fray.

Too many younger folks — and yes, I’m now old enough to use that phrase “younger folks” — don’t understand why the labor movement is critical toward improving working conditions for everyone. At the risk of sounding condescending, I say it’s about time for them to get it, for their own good. They didn’t create the terrible job market and exploitative employer practices that confront them, but by organizing on their own behalf they can forge a more promising future.

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