On Unemployment And The Social Divide

25 Jul

“We pass the word around; we ponder how the case is put by different people, we read the poetry; we meditate over the literature; we play the music; we change our minds; we reach an understanding. Society evolves this way, not by shouting each other down, but by the unique capacity of unique, individual human beings to comprehend each other.” –Lewis Thomas, The Medusa and the Snail (1979)

I am increasingly alarmed at this new era that our nation finds ourselves progressing towards. Its nothing new and uncharted, rather for those who know and understand history; you will see that we are rapidly in danger of repeating ourselves. I am resigned to the fact that this probably won’ t change minds who are not willing to look at things from other perspectives, but I feel that instead of kicking people when they’re down by resorting to ad-hominem attacks/name-calling instead of coming up with solutions and engaging in civil debate, we should all, as a society indeed be focused on the latter. Consider this statement:

Heller said the current economic downturn and policies may bring back the hobos of the Great Depression, people who wandered the country taking odd jobs. -Rep. Dean Heller, Feb. 2010

I have seen a lot of vitriol expressed from those who have a job, directed at the unfortunate people who lost theirs during the Crisis of 2008 (which is still, in my humble opinion, an ongoing affair). It’s a level of vitriol that causes me great alarm, given that many of my friends/acquaintances/associates now find themselves in the lucky 10% (16+% if you include U-6). All of them come from varied backgrounds: clerical office work, construction, manufacturing (robotic programming, machinists, etc.), computers (programming, networking, project management, etc.) and finance. Their degree status is varied as well, along with their saving patterns during the relative  boom time from 2003-2007. One thing that I can say personally about these people is that they do not fit the description that an increasing number of people who have a job use to describe them. While it is true that there may be a small group of people who milk/game the system; surely they are not the majority. It would be similar to the SEIU painting everyone on Wall Street with the same brush as greedy/entitled people. You and I both know that’s not true; the majority are hardworking, honest people who go to do a job. The same applies to the unemployed. These people didn’t drive the economy into the ground, they are the  collateral damage that occurred when a small minority who held the power did.

Many people are pounding the pavement, day after day, looking for work. For some people, they’re looking for any work at huge reductions in salaries/benefits. With a 5:1 applicant to job opening ratio across several industries, the simple forces of supply and demand are kicking in. While some people need to be more resilient and not get discouraged in applying for jobs while not even getting a basic response back, the majority of people keep looking, turning over every nook and cranny. Being unemployed can destroy your social/professional network, one must guard against that. However, trying to maintain a social network while worrying about how you’re going to pay the bills and other things that happen in  life , while looking for jobs and doing critical self-assessments that are necessary to find a way to improve your image in front of prospective employers. Again, instead of painting the majority with the sins of a small few, really look at the facts: Hiring manager and CEO surveys all are saying that there are reduced plans to hire in the second half of 2010. While we have made progress in reducing the applicant to job ratio from 6:1, we still have a long way to go. And I believe that the majority of people who are unemployed are trying, some more futile than others, but they are at least trying. Trying to re-make themselves to deal with a rapidly changing job marketplace and make themselves more marketable so that they at least have a chance of hearing something from their places at which they apply to.

We are becoming a nation that is divided. I opined just this previous week at a gathering of financial professionals in Chicago that Al Qaeda has achieved their primary target of dividing our country, pitting fellow Americans against each other and tearing up the fabric of our society. And they did not have to even lift a finger: we are doing this to ourselves. Excessive greed in the far corners of our financial system by both Wall and Main streets, a systematic and methodical destruction of the middle class and a level of partisan bitterness that I have never seen in my lifetime – for many people who have a longer life span than myself, I’m sure it would be the same (you can feel free to comment and share your observations). Instead of looking for solutions to get Americans back to work, those who have jobs and wealth are stomping on those people who are actually trying to improve their situation. Again, people are painting broad strokes while failing to look at the issue from other people’s perspectives. I am not calling for redistributionist policies, free lunches/welfare at the expense of the deficit; rather I am at least asking that we show some level of compassion and use the American engine of thought and economic might to come up with solutions that not only address our short term issues, but enable these people to take a horrible situation, get on their feet, retrain so that America can lead again.

Now that I’ve blasted people for not coming up with solutions, here are a few that I can think of that would make an immediate impact and get our country moving again:

1. Offer incentives to small businesses to hire unemployed workers – Tax breaks, “stimulus measures” can work. If business is incentivized and the costs outweigh the benefits, they will make the moves to hire people. I realize that this has been tried already, but we need to revisit it. But the policies need to be constructed with the business community at the table, not in a Washington backroom.

2.As a condition for unemployment, instead of penalizing those who decide to take classes to retrain, encourage them to do so. Much like tuition reimbursement in companies, their college educations in retraining can be subject to a number of criteria. Extra emphasis needs to be had on the industries of the future (no, pushing ‘Green Jobs’ is not adequate when we have a clearly defined deficit of people in this nation who lack Mathematics and Science skills).

3.Clarity in policies – DC needs to listen to its citizens and business leaders (both small and large) alike and provide certainty.

4.Stop talking about being “pro growth” and “pro business” while backhanding the people who are in charge of creating job growth in the nation

5.Stop stomping on each other’s throats and help – Volunteer to help the unemployed shape up their resumes, help give mock interviews and give people feedback so that they can improve themselves. Help them rebuild their professional networks instead of ostracizing and shunning them.

6.I’m missing a few things, most certainly – Comment on this and offer your ideas. I will compile the results. Instead of dividing our nation we need to confront the issue head on with solutions.


8 Responses to “On Unemployment And The Social Divide”

  1. Bankrchick July 25, 2010 at 9:47 am #

    I liked this article. Point #5 is important. If I may, I would just add that small business is key here. There is a clear investment opportunity for flush financiers out there looking to diversify out of stocks- small business funding. Vincent Fernando @vincefernando at The Business Insider sort of locked the argument here.


  2. chibondking July 25, 2010 at 10:05 am #

    I forgot a key point (Sunday AM fogginess)… SBA reform would do wonders as well. I recall people mentioning it – I think that it would definitely do a lot of good to get funding to businesses who desperately need it. Thanks for sharing the link, I like Vince’s idea.

    The last time I dealt with the SBA in depth personally was circa 2001-2002 and the bureaucratic mess was an absolute nightmare. Now I think would be a perfect time to clean the agency up as their original mission/mandate is actually a noble one and it will have a positive impact across all areas of the economy.

  3. enoehtoen July 25, 2010 at 10:53 am #

    I’ve long thought along similar lines. A key thesis of mine is that manufacturing is at the heart of a nation’s economic engine. It is the one sector of the economy that actually produces something tangible. Everything else – the entire service economy was once built around manufacuting.

    When Lehman collapsed, the reason everything seemed so intangible is because everything in the American economy is. An economy that is 75 percent “services” is simply unsustainable.

    I’d have spent half the stimulus on creating hundreds of small new companies run by proven entrepreneurs in strategic areas (green for example) that ultimately lead to manufacturing and manufacturing jobs in the US.
    Just my 2c. Thanks for your post and enjoy your weekend!

  4. OsEnrgy July 26, 2010 at 1:15 am #

    Very positive article, that needs to be read.

    Some suggestions of my own: 1) don’t tax capital expenditures 2) End expensive wars with no tangible positive endgames 3) Lower spending on Military, and shift said funds into education & infrastructure 4) Keep the unemployment benefits going 5) Take a stand against the unions crippling the government

  5. resinate July 26, 2010 at 2:20 am #

    Nice article cbk.

    Elaborating on the above, my additions to your list would be to:

    1) end both oil wars immediately and redirect the moneys primarily towards a modern Manhatten project to replace the internal combustion engine and/or invest in tearing out a lane or two of all major streets in the US to install light rail.

    2)Push for international expansion of unions and international labor standards to make outsourcing less profitable.

    History tells us that during end of empire/great depression times, like we are experiencing now, fiddling interventions are futile.

    • Anal_yst July 28, 2010 at 5:57 pm #


      1. Not bad, will never happen though.

      2. ABSOLUTELY NOT!!!! Unions HURT the economy, and Nationalist protectionism is insane, politically unfeasible, and just generally wrong.

      To elaborate: Its no one’s fault but our own that outsourcing has “taken away” jobs. Many Americans to this day get paid WAY too much (several in this industry, for sure) for what they do, and people are entitled, which is a terribly self-defeating mentality. You know why all of the landscapers’ employees are (usually, at least in North NJ where I grew up) less-than-legal Mexicans is because there’s no supply of U.S. Citizens who want to do the work for the wage the job pays, not even kids in high school!

      The point is if Americans want to maintain their standard of living they’re going to have to vastly improve their skills/knowledge, work harder, and work longer hours. Otherwise, the choice is unemployment or working for $12/hour (or whatever) in a call center.

      Its just.that.simple.

  6. chicagosean July 26, 2010 at 11:16 am #

    Great post full of many great ideas. If only the people in charge would listen to reason….


  1. Some thoughts – My SOTU Address « Stone Street Advisors - January 27, 2011

    […] on my mind after going through the archives: “On Unemployment And The Social Divide” [link] Another thing that was on my mind tonight that conveys my thoughts, from a dear friend who I hold […]

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