Clearly, late in the Bush Administration, the US started a severe recession. I don't think that anyone will argue with me that we were in a recession then. When did the recession start? I'm not sure, and for purposes of this post, it doesn't matter. Similarly, early in the Bush Administration, we were in a recession. At some point, that recession ended and we had a recovery (the exact timing doesn't matter for purposes of this post). Many say that we are currently in a recovery (some would argue with that, but that's not the point).
My point is that during the recovery that began likely sometime in 2002, something was missing. If we are in a recovery now, the same thing is missing. It's a four-letter word, but it shouldn't be an ugly one -- JOBS. And, to the extent that there are jobs, many who are taking them are moving into lower-paid jobs than they were in during their previous period of employment. Said differently, unemployment didn't come down as quickly as we might have like in the early part of this century. And, when it did come down sharply, underemployment (employment in a lesser job than one held previously) was rampant. Similarly, now, even among people who are finding re-employment, many are earning far less and working more than they were before they were laid off.
So, what happened? Recoveries used to bring jobs, lots of good jobs. I remember what it was like finding work in the very early 80s -- in two words, not good. I remember what it was like finding work in the mid 80s -- lots more jobs, lots of good jobs. In the early 90s, it was tough to find jobs. By the end of that recession, good jobs they were aplenty.
The economy has changed. You may or may not be a fan of his, but Thomas Friedman wrote a book called The World is Flat that talked about it. In 1981, it wasn't practical to move large chunks of a company's work from the USA to India or another Asian country. Communications were difficult. Your choices were by telephone when both parties were awake at the same time, something called Telex which was neither cost-effective nor particularly useful, or something that I remember from days of yore called "air mail." Fax machines existed, but they were not prevalent. E-mail was just starting to come on to the horizon, but it was neither common nor cost-effective.
Now, I often wonder what a telephone is. Even in the business world where verbal communication has its place, you just don't find that much of it. Most communication is done via e-mail or instant message. Being on different continents typically only slows things down by seconds. Being in different time zones is rarely an impediment. So, US jobs disappear.
When they reappear, to my view, they fall into two categories -- lower-paid and previously non-existent. The first of those is easy to comprehend. Let's consider the second.
I listened this morning to some sort of a jobs expert. I didn't hear who exactly she is, who she represents or what her credentials were. But, she was talking about companies that are hiring. Of the five that she mentioned, two are among the so-called Big 4 accounting firms. When asked why they are hiring, she brought up the name of an old 'friend': Dodd-Frank.
You remember Dodd-Frank. I have ranted about that law many times here. Perhaps it and its nearly 3000 pages of new rules has its place, but one thing that is certain is that it has placed an incredible added compliance burden on not just financial institutions, but virtually every large company in America. But, where there are losers, there are winners. In this case, the winners are those who can assist with that compliance burden. And, from where I sit, none appear to be bigger winners than the Big 4 (this is not meant to disparage the accounting profession, just a statement of what I believe to be fact).
So, jobs have been created by government intervention. If you are a fiscal liberal, you are thinking of course they were. If you are a fiscal conservative, you are thinking that a few were created while millions were lost. The purpose here is not to debate that issue, but to figure out how to create them.
I know. You are waiting for the answer.
You know what. If I had the answer, my blog readers would not be the first to know. Sorry, but that answer would be way bigger than this blog.
For those few people who delight in seeing what I may be ranting about on any given day, this blog is taking a well-needed vacation until after Labor Day. Check back then to see what's new, exciting, trendy, or just aggravating.