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Some Deep Thoughts on the Jobs Report


A deeper dive into the September unemployment report reveals some things about jobs, education, and debt in this economy.

So what does that mash-up of the Household and Establishment Survey data points say? Simply, the return on higher education is not as high as many think. And to be truthful, this isn't new. The meme of the Starbucks (NASDAQ:SBUX) barista with a college degree actually started in the recovery at the end of Bush 41's presidency and the beginning of Clinton's. Remember those slacker movies Reality Bites, Singles, and Clerks? All by-products of a recession from 20 years ago. We've glossed over that fact, or just plain forgotten it with the ebullient social mood that prevailed during the dot-com era. But, we can't go back to Eden. Creative destruction is like a honey badger that way.

Which means that sanitation worker in your neighborhood may very well be quoting Yeats or Longfellow. Or even Schumpeter or Descartes. The world changed on us while we were investing in Internet stocks and buying gargantuan McMansions over the past 15 years, and the inter-generational dialogue of what this change actually means never took place.

We have more people on this planet with a college education than at any time in human history. But with wages stagnant, that means there will be more educated people across all different sectors of this economy willing to work for the same amount of money because they have those student loans to pay off, which are growing with each passing month. Just look at the Fed's Consumer Credit release.

All of this points to one irrefutable conclusion: Something's gotta give. Either we are going to try and re-engineer how our economy operates so that a college education isn't the only meal ticket to being a productive member of society (provided you are able to find work you want to do and can do), or we're going to have some nasty consequences such as larger, deeper income gaps and a stratified society; one you'd probably call neo-caste or nouveau-caste, where everyone just deals with people in their own local social strata. And the higher-level castes treat the lower-level ones like diseased vermin.

If we act decisively and quickly we can come out on the other side of this period in our history as a better nation and society. A caste-like society doesn't have to be around the corner for us, if we don't want it to be. But if we fail to act, well, history is littered with the ruins of fallen nations. The choice is ours.

Twitter: @japhychron
No positions in stocks mentioned.
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