Unemployment has hit younger and older workers, males and African-Americans especially hard. But one group is paying the biggest price: Blue-collar U.S. manufacturing workers have suffered disproportionate job losses, and their plight has big implications for all of us.
In October, the overall U.S. unemployment rate was 9.6%, while total unemployment and “underemployment” (including people who would prefer to work full-time but currently aren’t) topped 17%.
In addition, the disparity between white-collar and blue-collar unemployment is stunning: 4.5% among college graduates versus 10.8% for those with a high-school diploma, and 14.3% for those without one.
The historic data of the last 30 years is rather stark:
From its peak of 19.5 million in 1979, manufacturing employment declined, on average, by about 1.5 million jobs a decade until 2001. Then it fell off a cliff: America lost 2.5 million manufacturing jobs from 2001 to 2007 and almost that much again during the latest recession.
So, nearly 5 million American manufacturing jobs have disappeared since 2001, an astonishing 29% plunge in less than 10 years. The United States has lost more than 42,000 factories during that time.
Clearly, it was a “lost decade” for far more people than investors in U.S. stocks.
A lost decade, indeed. The last 10 years could be perceived as much worse than just a ‘lost decade’. There is a very real difference between this economic downturn and the one that happened in the early 90’s that is escaping the ‘data junkies’. In a word: Demographics.
If US demographics were a normal, evenly distributed population; then this data would be just as it implies. Yet, due to the huge “babyboom bulge” going through life, the number of older people wiped out from this recession is much larger.
Understand that the average age of a boomer is 20 years older and they do not have the time it will take to regroup before reaching retirement age. In 1992, the height of the downturn, the average age of a boomer was 37. Today, that average age is 55. Just how much money can these people put away?
On top of this, add the severe problems of underfunding in social security and you have an incredibly huge ‘issue’ not showing up in the data.
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