Economy Takes White-Collar Workers to the Cleaners
By
Ryan Goldberg
Jun 09, 2009 10:35 am
In this economy, learning to pour concrete may be more useful than a college degree.
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paradigm shift: “Creative” types have also been hit hard by the crisis. This raises the issue of the value we place on college, and on both white- and blue-collar professions in the Information Age, which has seen 2 bubbles and crashes.
The months since the collapse of Lehman Brothers have been disastrous for professionals, except those in the fields of health care and education. From August to April, there was an overall drop in employment of 4.3%. More significant, however, were the steep declines in highly skilled occupations: 9.3% in computer and math jobs, 10.3% in engineering and architecture occupations, and a whopping 11.5% in arts, design, entertainment, sports, and media occupations.
It's likely that many of these jobs will not return. Newspapers -- from the New York Times and USA Today down to small-town rags -- have made job cuts that are likely to be permanent; television networks are eliminating news divisions; architecture firms in major cities have lost their bread-and-butter corporate clients. The picture is equally grim for the financial industry, since so much of the employment growth in financial services over the past 20 years appears superfluous in hindsight.
Call it the New Risk: Saddled with excessive college debt, young professionals are looking into the abyss. Those just starting their careers, along with new college graduates, will do so without the prospect of the high-paying financial and consulting jobs that paid 6 figures and were relatively easy to come by when I graduated from Brown in 2005. I knew people who majored in art history and philosophy and went to work for Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS) and other investment banks. It was bewildering. Their lack of knowledge and genuine interest in finance didn’t stop them from getting big salaries and bonuses. To make matters worse, the cost of college has risen at twice the rate of inflation over the last 2 decades. Students borrowed $19 billion in private loans last year, from a bewildering array of sometimes usurious lenders. About two-thirds of new college graduates, or an estimated 1.8 million, have taken on student loans to pay ever-rising tuition and room and board costs. The average cumulative college debt among this group is about $22,500, according to FinAid.org, a website that specializes in financial aid.
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2009-06-09 10:58:52
Globalization is a lie
Pre-globalization, you could pay a US worker enough to buy what he was creating. That insight of Henry Ford led to the American standard of living as we know it. People manufacturing US made underwear could afford to buy US made cars, live in modest, single family homes with US made appliances, save money and retire comfortably.
Post-globalization, if you pay a US worker enough to buy what he is creating, the product will be undercut by an slave-made import and the US company goes bankrupt. In the early phases, the importer profits immensely since the undercut price is still hugely profitable relative to the price of the displaced US product. So the only way US companies can profit and stay in business is to move production overseas, whether they want to or nor.
This has been obvious from Day-1, but not a single so-called 'economist' had the guts then, or the guts now to tell the truth. We are told the great lie that 'globalization is necessary for US prosperity', etc. etc. Globalization is an ideology with no basis in fact beyond hollowed out and dying US cities and manufacturing. It is a glaring example of the ability of a destructive ideology supported by powerful political interests to withstand the onslaught of contradictory facts for decades.
Globalization is about strip mining the wage spread between prosperous societies and the the most desperate people that can be found and herded into factory dormitories anywhere in the the world, until there is no wage spread. That is all it is. That is all it has ever been. It is all it will ever be.
This is not something done to us externally. It is something done to us by a generation of the most corrupt and incompetent government in American history. US democracy stands before the world a self-destroying failure.
Economics is war. The US unilaterally surrendered 30 years ago. We have been living a pathetic economic fantasy ever since. What are the millions of US unemployed going to do now? The 'economists' have no answers. Just more globalization until our streets are lined with starving beggars.
Post-globalization, if you pay a US worker enough to buy what he is creating, the product will be undercut by an slave-made import and the US company goes bankrupt. In the early phases, the importer profits immensely since the undercut price is still hugely profitable relative to the price of the displaced US product. So the only way US companies can profit and stay in business is to move production overseas, whether they want to or nor.
This has been obvious from Day-1, but not a single so-called 'economist' had the guts then, or the guts now to tell the truth. We are told the great lie that 'globalization is necessary for US prosperity', etc. etc. Globalization is an ideology with no basis in fact beyond hollowed out and dying US cities and manufacturing. It is a glaring example of the ability of a destructive ideology supported by powerful political interests to withstand the onslaught of contradictory facts for decades.
Globalization is about strip mining the wage spread between prosperous societies and the the most desperate people that can be found and herded into factory dormitories anywhere in the the world, until there is no wage spread. That is all it is. That is all it has ever been. It is all it will ever be.
This is not something done to us externally. It is something done to us by a generation of the most corrupt and incompetent government in American history. US democracy stands before the world a self-destroying failure.
Economics is war. The US unilaterally surrendered 30 years ago. We have been living a pathetic economic fantasy ever since. What are the millions of US unemployed going to do now? The 'economists' have no answers. Just more globalization until our streets are lined with starving beggars.
2009-06-09 11:26:47
20/20 covered this subject -
a few months ago. The conclusion was that about half the people in college today would be better off spending 6 months at a trade school instead. Obviously Obama did not see that show because his policy is the opposite.
2009-06-09 12:16:17
working with your hands
Unfortunately,"working with your hands" comment ignores an inconvenient truth about the state of manual work in the good ole USA, that place where they used to make things. Illegal workers do the great majority of low skill manual work, not citizens, because they can be exploited for their lack of work documents. Higher skilled plumbers, electricians, finishers, etc. have experienced the same problem as Wall Street MBA's, that they are no longer needed in the great numbers that the boom supported. Blanket endorsing of the trades is like the 90's stuff about programmers; in the end the hype will not lead to family supporting incomes. As soon as housing gets going(if it does in 5-10 yrs.) the illegals and very low skilled will swarm back into the work force, killing off the opportunity for would-be college set to enter the trades. Also the idea that even medium pay awaits the grad of a local trades institute is highly suspect as the trades with superior pay, plumbers and electricians, controls experts, have significant barriers to entry over the short term.
In short form, the higher paying areas require some very specialized skills that take several years of experience to master, just try to lay a couple of cinder blocks and you'll see what I mean. Having both Ivy League education AND 40 years in the trades, 35 as an owner/operator, I can assure anyone looking to the trades right now, that it will be a very tough slog, even with all the stimulus money, no union steward is going to let a newbee just walk onto the jobsite, you need your father or brother, who is a member, to try to get you in. All road, school, bridge work is strictly union, even the laborers. Car mechanics look good, but Cliff Notes don't get you over with electric fuel injection which is computer managed. Half of the people in college should probably work harder at learning something still useful in our system, certainly not heading for the local ITT institute.
In short form, the higher paying areas require some very specialized skills that take several years of experience to master, just try to lay a couple of cinder blocks and you'll see what I mean. Having both Ivy League education AND 40 years in the trades, 35 as an owner/operator, I can assure anyone looking to the trades right now, that it will be a very tough slog, even with all the stimulus money, no union steward is going to let a newbee just walk onto the jobsite, you need your father or brother, who is a member, to try to get you in. All road, school, bridge work is strictly union, even the laborers. Car mechanics look good, but Cliff Notes don't get you over with electric fuel injection which is computer managed. Half of the people in college should probably work harder at learning something still useful in our system, certainly not heading for the local ITT institute.
2009-06-09 15:18:30
Charles, Lowell, admire your comments
The economy is going to be rebuilt from a very basic level because it has to be. The "Financial Economy" is dead. The socialist model, where we all work under government supervision, (the road we now tread,) will lead only to long term stagnation at best and most likely steady decline. When people lose faith in socialism it has always collapsed quickly; posturing politicians in the end cannot put Humpty Dumpty back together.
Using shadowstats estimate of pre - 1990 methodolgy unemployment rates unemployment is over 20%. The government employs about 22% of the workforce; these people are overhead, not production.
I am increasingly struck by parallels with the Roman Empire. Most ominous parallels, to be sure, and unpleasant to contemplate. We shall see how American Exceptionalism plays out in practice, eh?
Using shadowstats estimate of pre - 1990 methodolgy unemployment rates unemployment is over 20%. The government employs about 22% of the workforce; these people are overhead, not production.
I am increasingly struck by parallels with the Roman Empire. Most ominous parallels, to be sure, and unpleasant to contemplate. We shall see how American Exceptionalism plays out in practice, eh?
2009-06-09 20:21:57
Education is school of hard knocks
Call it the New Risk: Saddled with excessive college debt, young professionals are looking into the abyss.
I have 3 kids and right now I can tell you one is going to college - on a full scholarship and the next one is going to get counseled to go and learn a trade - ie use his hands along with a brain
the 3rd is still to young to determine
I will not co-sign or help my kids with college costs - need to save for retirement 1st
but I'm teaching them to be financially FRUGAL
I have 3 kids and right now I can tell you one is going to college - on a full scholarship and the next one is going to get counseled to go and learn a trade - ie use his hands along with a brain
the 3rd is still to young to determine
I will not co-sign or help my kids with college costs - need to save for retirement 1st
but I'm teaching them to be financially FRUGAL
2009-06-10 01:53:16
working with your hands
Charles,
Thanks for the comments. But, do you think that this Union is fair in a free market environment. Is it fair to pay $75 to a Union plumber, when the same task can be done by a non Union member for $25.
I certainly do not have the experience you have, but I have spent 15 years in engineering, and I can tell you that experience is over rated. Experience is a great thing, but an equally important asset is motivation. I have seen fresh engineering grads be more productive than the more seasoned ones. The word "experience" is something that the people on the other side use to keep the fresh talent under them.
Thanks for the comments. But, do you think that this Union is fair in a free market environment. Is it fair to pay $75 to a Union plumber, when the same task can be done by a non Union member for $25.
I certainly do not have the experience you have, but I have spent 15 years in engineering, and I can tell you that experience is over rated. Experience is a great thing, but an equally important asset is motivation. I have seen fresh engineering grads be more productive than the more seasoned ones. The word "experience" is something that the people on the other side use to keep the fresh talent under them.
2009-06-10 15:40:42
working with your hands
UNions are a vestige of a time long ago when workers were not reoresented. Safe to say - especially with Obama buying the election by promising his union supporters gifts from the public treasury - the workers have more say today than do the people who are paying all the taxes. The middle class has gotten screwed and the american work ethic is being destroyed by those who will take money from peter to pay paul simply because there are more Pauls then Peters to rob. Very sad & Very dangerous
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