Where did the jobs go and will they ever return?

You know them – the friends and colleagues without work, the folks who’ve been looking for a job for months and months. Perhaps they’ve sort of dropped out of sight, embarrassed about their inability to find work. Maybe you stay in touch, passing on leads and dropping an email or call occasionally to check in.
Or this might be you; laid off from what looked to be a solid job, terminated as a result of a corporate directive or faceless superior’s decision or lack of business or tax revenue.
Whether it’s personal or professional, there’s something very different about this economic recovery. Just beneath the surface of the Occupy Wall Street and Tea Party movements is a palpable fear, a desperate sense that “I could be next”. This isn’t about assigning blame or lamenting missed opportunities or decrying failed economic policies, it’s about trying to understand what’s happening, why, and what we can do.
Because there’s something structural going on, something much deeper than we’ve been able to explain.
We know there are far more people looking for work than jobs available for workers – according to WCRI’s Rick Victor the total number of jobs we’re going to create over the next decade is about 3.5 million, matched against around 25 million potential workers. Between the newly unemployed (a declining number, thank goodness), the long-term under-employed (those working fewer hours or at part time jobs and/or for lower wages), and long-term unemployed (those out of work for six months or more) and those with some partial disability that prevents them from working at their past position and limits their attractiveness to new employers, the population without work today totals around 15 million.
While I’m far from a labor economist, there are a few trends I’ve been following that provide some insight into what’s happening.
1. State and municipal workforces are declining, disproportionally hitting minorities and removing “middle class” jobs with excellent benefits from the available supply. This trend is well-established, having begun in mid-2008.
2. Construction – especially housing construction – continues to suffer, and will likely not recover. As people move from exurbs into close-in suburbs and back to cities, there’s little demand for – and a huge oversupply of – single family tract homes.
3. Increasing automation – in the name of efficiency and higher quality in manufacturing – has sucked huge numbers of jobs out of the economy (Five million over the last decade alone, driven in large part by automation). Factories that used to need hundreds of workers now need a few dozen, and the jobs that are gone are usually at the middle skill levels – above laborer but below highly skilled machine operator.
4. A woefully low level of investment in infrastructure – whether it be new or maintaining existing transportation, energy supply and communications – means there are few jobs for out-of-work construction workers, and low demand for machines and materials needed to build and maintain infrastructure.
A deeper discussion of trends and a utopian vision of a solution comes from a well-regarded sociologist, Herbert Gans, who writes “the current jobless recovery, and the concurrent failure to create enough new jobs, is breeding a new and growing surplus pool. And some in this pool are in danger of becoming superfluous, likely never to work again.”
So, what does this mean for health care?
Well, if you don’t have a job, you aren’t going to have employer-based health insurance. And you probably can’t afford COBRA, so you are likely going to either a) go without insurance, or b) enroll in Medicaid. If it’s ‘a’, then if and when you need health care, the providers are going to have to charge others more to pay for your needs.
If it’s ‘b’, then taxpayers are going to have to pay more for your care, while providers are going to charge other payers more to make up for the shortfall between what it costs to provide that care and what Medicaid pays (it’s not this simple but close).
If you’re an injured worker due to an occupational injury, it is going to be hard to find a new job – which will add cost due to an extended disability duration.
I’m no Luddite, but I am a realist. Unless we get our economy moving – which will require heavy investment in infrastructure – we aren’t going to see much improvement in employment over the near to mid term.