Is 9-10% unemployment going to be the new normal?

Local_Historian wrote: Honestly? If we get a severe winter this year, a lot of the homeless are going to die. A lot of those unemployed will become homeless. The competition for what little resources and shelters there are for homeless will be maxed out, and it will indeed be a survival of the fittest.

Europe has unemployment numbers from 10-20% for decades and their homeless don't die in high numbers.

I think you will see the US become like Japan, the professional people with jobs will be in good shape, but a good 25% of the population will essentially be day workers, few benefits and low wages. And these people are unlikely to find good jobs because it is too expensive to hire new workers, cheaper to put your current staff on overtime or hire temps.

SS109 wrote: I think you will see the US become like Japan, the professional people with jobs will be in good shape, but a good 25% of the population will essentially be day workers, few benefits and low wages. And these people are unlikely to find good jobs because it is too expensive to hire new workers, cheaper to put your current staff on overtime or hire temps.

This is already happening, its much easier to find a temp job right now. There is a difference between W2 temps (benefits) and 1099 independent temps though, and I suspect it is going to be more closely watched by the IRS in coming years. I think it is fine for people who want that lifestyle and can do without benefits, not so good for those who are forced into temp jobs as a last resort.

I found these statistics interesting. For folks holding a B.A. or higher unemployments rates fall to 5%, some college or an A.D. 8%, A high school diploma only 10% and if you dropped out it jumps to 15%.
http://www.mymoneyblog.com/unemployment ... ation.html

That makes it easy to see what is mostly driving our high unemployment rates. For too long oureconomy was so hot anyone could get a job. Now only if you have skills can you be certain of employment.

SS109 wrote:

Local_Historian wrote: Honestly? If we get a severe winter this year, a lot of the homeless are going to die. A lot of those unemployed will become homeless. The competition for what little resources and shelters there are for homeless will be maxed out, and it will indeed be a survival of the fittest.

Europe has unemployment numbers from 10-20% for decades and their homeless don't die in high numbers.

I think you will see the US become like Japan, the professional people with jobs will be in good shape, but a good 25% of the population will essentially be day workers, few benefits and low wages. And these people are unlikely to find good jobs because it is too expensive to hire new workers, cheaper to put your current staff on overtime or hire temps.

Europe's unemployed don't die because they have a much, much better social safety net. Ours is not just fraying, it's in the process of being actively hacked to nothing.

As to your second paragraph...I think you might be close to what is happening, but I think the numbers of those with marginal jobs is already higher than 25%. And even permanent, full-time jobs are going to be low-wage ones for a growing number. Here's how I think it's looking to break out within a decade or two:

Less than 1% "capitalist class" who live off investments.

10-15% professional class and small business owners.

40% lower middle class, low wage jobs in retail, services, manual labor, temps

25% sub-substistence wage workers, day laborers, etc.

10% unemployed

Under that scenario, up to 75% of the population is going to have earnings too low to be homeowners, accumulate savings or retirement funds, or send their kids to college. Many if not most will struggle just to keep a roof over their heads, food on the table, and maintain some sort of basic transportation.

This really does seem to be where we are headed and I don't know that anything can stop the trend at this point. I just wonder what America will look like when that happens. Certainly the top 10-15% cannot make up for all that lost consumer spending alone.

AspenValley wrote:

SS109 wrote:

Local_Historian wrote: Honestly? If we get a severe winter this year, a lot of the homeless are going to die. A lot of those unemployed will become homeless. The competition for what little resources and shelters there are for homeless will be maxed out, and it will indeed be a survival of the fittest.

Europe has unemployment numbers from 10-20% for decades and their homeless don't die in high numbers.

I think you will see the US become like Japan, the professional people with jobs will be in good shape, but a good 25% of the population will essentially be day workers, few benefits and low wages. And these people are unlikely to find good jobs because it is too expensive to hire new workers, cheaper to put your current staff on overtime or hire temps.

Europe's unemployed don't die because they have a much, much better social safety net. Ours is not just fraying, it's in the process of being actively hacked to nothing.

As to your second paragraph...I think you might be close to what is happening, but I think the numbers of those with marginal jobs is already higher than 25%. And even permanent, full-time jobs are going to be low-wage ones for a growing number. Here's how I think it's looking to break out within a decade or two:

Less than 1% "capitalist class" who live off investments.

10-15% professional class and small business owners.

40% lower middle class, low wage jobs in retail, services, manual labor, temps

25% sub-substistence wage workers, day laborers, etc.

10% unemployed

Under that scenario, up to 75% of the population is going to have earnings too low to be homeowners, accumulate savings or retirement funds, or send their kids to college. Many if not most will struggle just to keep a roof over their heads, food on the table, and maintain some sort of basic transportation.

This really does seem to be where we are headed and I don't know that anything can stop the trend at this point. I just wonder what America will look like when that happens. Certainly the top 10-15% cannot make up for all that lost consumer spending alone.

Could happen like you say, but I would think first we are due for another round of deflation. If wages show no growth, savings are earning 1% interest, and jobs are scarce, I think you will see more price cuts on homes. These same people are holding onto cars longer, so car companies will have to decrease prices to get people to buy new.

chickaree wrote: Our nation walks a tightrope. Teeter too far left or right and we fall. Compromise brings us back to balance. If we do fall it will because of this.

As the old saying goes...

"United, we stand. Divided, we fall."

SS109 wrote:

AspenValley wrote:

SS109 wrote:

Local_Historian wrote: Honestly? If we get a severe winter this year, a lot of the homeless are going to die. A lot of those unemployed will become homeless. The competition for what little resources and shelters there are for homeless will be maxed out, and it will indeed be a survival of the fittest.

Europe has unemployment numbers from 10-20% for decades and their homeless don't die in high numbers.

I think you will see the US become like Japan, the professional people with jobs will be in good shape, but a good 25% of the population will essentially be day workers, few benefits and low wages. And these people are unlikely to find good jobs because it is too expensive to hire new workers, cheaper to put your current staff on overtime or hire temps.

Europe's unemployed don't die because they have a much, much better social safety net. Ours is not just fraying, it's in the process of being actively hacked to nothing.

As to your second paragraph...I think you might be close to what is happening, but I think the numbers of those with marginal jobs is already higher than 25%. And even permanent, full-time jobs are going to be low-wage ones for a growing number. Here's how I think it's looking to break out within a decade or two:

Less than 1% "capitalist class" who live off investments.

10-15% professional class and small business owners.

40% lower middle class, low wage jobs in retail, services, manual labor, temps

25% sub-substistence wage workers, day laborers, etc.

10% unemployed

Under that scenario, up to 75% of the population is going to have earnings too low to be homeowners, accumulate savings or retirement funds, or send their kids to college. Many if not most will struggle just to keep a roof over their heads, food on the table, and maintain some sort of basic transportation.

This really does seem to be where we are headed and I don't know that anything can stop the trend at this point. I just wonder what America will look like when that happens. Certainly the top 10-15% cannot make up for all that lost consumer spending alone.

Could happen like you say, but I would think first we are due for another round of deflation. If wages show no growth, savings are earning 1% interest, and jobs are scarce, I think you will see more price cuts on homes. These same people are holding onto cars longer, so car companies will have to decrease prices to get people to buy new.

I think housing prices are bound to fall when the "middle middle" class is being systematically wiped out. Most of the jobs lost in the past decade were in that category and most of the new jobs created are in the bottom two categories. I also think the small business owner is going to be squeezed hard because most depend on the middle-middle class to survive.