Bloomburg Business Week had an article in their May 7th 2012 magazine written by Mike Dorning entitled “The Stuck-in-the-Middle Recovery” with some disturbing statistics. Let me restate the observations, “According to research by economists Nir Jaimovich of Duke University and Henry Siu of the University of British Columbia, ninety five percent of the net job losses during this recession were in middle-skill occupations such as office workers, bank tellers and machine operators.”
So during a recession the middle class typically is hit hardest, and then eventually climbs back. Only, that come-back isn’t happening. According to these economists, “Job growth since the end of the recession has been clustered in high-skill fields inaccessible to workers without advanced degrees or in low-paying industries.” The article further goes on to state; “In March the U.S. had 2 million more managers and professionals working than five years earlier. Lower-paying service-sector jobs were up 1.5 million. It’s the middle-income jobs that have been slow to return.” “There are 3.2 million fewer Americans working in sales and office jobs and 1.2 million fewer employed in transportation and production – which includes factory and assembly-line workers, printers, welders, tailors, and poultry and meat plant workers. Another worrisome measurement: Median income in March 2012 was $2,900 lower after inflation than at the start of the recovery in June 2009.”
The article continues, “Not since the 1981-82 recessions have middle-income jobs snapped back quickly from the bottom of a downturn. In the 1990-91 and the 2000 recessions moderate-skilled jobs never made it back to their pre-recession levels.”
In a cynical moment, we have chuckled at the vision of what our economy would look like if we all had jobs flipping hamburgers (not that there is anything wrong with fast food or quick order cooks but there are only so many of those jobs as well). So perhaps we have finally arrived at the defining moment. As we have heard, the mantra in business today is “do more with less.” The potential is there for the next 10 years to be more disruptive than the last 10 years. Which means an eroding middle class, can any of us feel surprised?
It is my personal feeling that the “political establishment” both Republicans and Democrats should be tried for treason to this country for failing to serve to benefit “All” Americans and not just the special interest groups they seem to cater to so they can get re-elected. No one can fault a desire of any business to gain in efficiency or lower costs. That is their stated goal, to maximize profits. Ross Perot warned us back in the late 90’s of the “sucking chest wound” our economy would suffer if we did not create domestic policies that encouraged our industrial base to remain in the United States. What is most disturbing to all of us, is how we have arrived at a point in the world economy that seeks out a corrupt country like Communist China to create a better economy for all. Our “middle class” is paying the price.
– Cheaper is not always cost effective-
Dan
