Monday, April 29, 2013

Are You Ready For 25% Unemployment?


Keep your resume updated boys and girls!  Looks like employment in America is going to be a hard road to hoe in the coming years.  We just saw the GDP numbers come out on Friday and economists were bemoaning the sluggish 2.5% Economic Growth Rate.  Last quarter it was worse; less than half a percent in growth.

Now I'm not an expert here so I have to go with formulas that all economists accept.  One of those truisms is that, just to accommodate new workers entering the work force, America must have a minimum of 4% sustained growth quarter after quarter.

Wow!  That got me to thinking; what in the world are we going to do with the new people just entering the work force?  Mostly young folks, armed with high school or college degrees.  What will they do?  And how many are there?

So I googled the phone number of the local business journal here in Phoenix, called them and asked if I might speak with someone on the business staff,  preferably someone with a degree in Economics.  I was fortunate to get a nice young fella with a Masters Degree in Economics on the horn.  I asked him outright if he had seen this morning's GDP numbers.  He said he had.  I then asked if those numbers gave him cause for concern about our economy.  He said it did.  I then asked if he had any idea what the average was for new workers entering the work force per year.  He said he'd have to get back to I gave him my phone number and awaited his call.

About a half hour later, true to his word, my economist called me back and said that we are currently experiencing 125,000 a month entering the work force.  Said that number ebbs and flows based on graduation dates and so forth.   I thanked him profusely for taking the time to educate me and hung up.

Then I began extrapolating those numbers over a years time.  In essence, we've got roughly 1.7 million spanking new workers entering the work force each year.  And if we require 4% GDP growth in order to give these folks a job, and if we're falling between 50 and 75% short of those goals each quarter,  what are all these poor folks doing as they await a job so they can pay taxes, pay back their student loans, pay for their spanking new Obamacare medical premiums and set out on a life of their very own?

Based on the hard numbers I garnered it seems Paul Ryan was right; we really do have millions of college graduates who've moved back in with Mom and Dad, and living in the basement!  Again, based on the numbers, and the GDP shortfalls over the past five years, not only do we have older people giving up on seeking employment, we've got about ten million young people living in some bizarre Twilight Zone unemployment world!  And I can now believe that our "real" unemployment rate is closer to 15% than the 8% numbers the Bureau of Labor Statistics are kicking out each month!

Then I had another thought; what are we going to do about those 10,000 G.I.'s coming home from Afghanistan each month?  And what are the remaining 150,000 going to do when we pull out of Afghanistan next year?

And then I had the final nightmare of a question.  What will Americans do for jobs when we grant amnesty, citizenship and the right to live and work here for some 20 million illegal Mexicans?  What will the unemployment rate be then?  And how badly will American wages be suppressed with everyone trying to find a job and willing to take any salary just to get a job?

That prompted me to call back to the nice business journal economist.  He sounded like he was having lunch at his desk as he was chomping on something when I posed the question as to what were we going to do with millions of new Mexican American citizens seeking employment.  He sounded a bit exasperated and uttered "bingo...the $64,000 dollar question!"  I wanted to ask him one more question but didn't want to press my luck and get another smart ass response.

The other question I wanted to ask was not in his area of expertise anyway.  That question was, "if we can't provide jobs for our own people, our young people coming out of high school and college, and our young vets coming home from Afghanistan, why in hell is our President and Congress so hell bent on bringing some 20 million illegal Mexicans into an already miserable economy that can't even sustain what we have now?"


dirtblack said...

I have been saying the same exact thing for months. Now what I don't understand is WHY IN THE HELL ARE WE THE ONLY ONES TO SEE THIS BLUNDER? I have known the unemployment numbers that are being reported are crap. They forget to count the ones that have went back to school, and the ones that ran out of unemployment money. I myself have had to go back to school. In many of my classes the ratio of middle aged adults is about 20 to 33%. Then there's the ones that have given up totally and are living on welfare. I think the rate of unemployment is higher than 15% and when the illegals go legal it's going to be at about 30-40%. Just my opinion. That so called "gang of eight" has their heads so far up their asses they don't know which end is up. They seem to think all those illegals are votes. Sure they are votes but we all know what side of the fence they are on. (no pun intended) what really needs to be done is shut the border down, Boot out as many as we can, and cut off their Gov. titty. After the border is secure boot the rest of them that are filling up our prisons. After all of that is done we can heal and get the economy back to where it was. When that is done we can start letting in people who can contribute to society into our borders. My son is only seven but sometimes I look at him and wonder if he's even going to have a future. If our Gov. doesn't pull their heads out the United States will be a third world country in a few decades.

A Modest Scribler said...

I feel your pain dirtblack. One of my readers sent me an email this morning showing charts which indicate the BLS are blowing smoke up our butts. One chart shows the "real" unemployment rate to be closer to 23% now! Imagine how much worse it will be when we take in another 20 million illegals.

Sad. Damned Sad.

Ken said...

I just read an article that was quoting Alan Greenspan a great deal. If what he predicts comes to pass, all the mexicans, returning GIs, graduates, etc., entering the workforce just won't matter. He is saying that before this miserable excuse for a president leaves office (2013 according to Greenspan) we will see an economic collapse like none other ever experienced in this country. You have talked about this before, now those in high places are talking more openly about a 90% correction on wall street, unemployment that would far eclipse 25%. I don't know if any of it matters anymore. We keep printing money so naturally stocks become worth more, quantitative easing is just a disaster in the making. We are past the point of correction according to Greenspan, so really, pop the bottle find a comfortable place in the shade, a good bait and hope the fish are biting! I quit