Thursday, December 30, 2010

How Do You Define "Recovery?"

Listening to the nightly news or reading or listening to "expert" economists spin the latest government data is an interesting exercise these days. To hear the "recovery" cheerleaders tell it the latest week of declining new jobless claims, "impressive" holiday sales figures, reports of increased private sector jobs and an upward swing in other obscure economic indicators we are pointing to a not-so-bad national economy heading into 2011. I would suggest it depends on your perspective--if you have a job circumstances are certainly brighter than for the millions of people still unemployed or significantly underemployed as a result of the Great Recession. How does the term "recovery" translate for them? Not so bright, I'm afraid.

The numbers remain staggering with 15 million people still classified as unemployed with an ever increasing percentage of this total more seriously unemployed for a year, two years or longer. In the latter case, many of these folks have not only exhausted their regular savings but also their retirement nest egg savings, borrowed all they can from friends and relatives, and even sold their jewelry or prized family possessions to try to make ends meet. Still others have reached the absolute bottom of their financial well and face bankruptcy and/or foreclosure on their homes. Outdoor homeless camps seem to be sprouting up and growing larger outside many major U.S. cities, thousands are sleeping in their cars or forced to move back into cramped quarters with elderly parents or relatives, and record numbers are depending on government food stamps or private food banks barely able to keep up with the increased demand. If there is an economic "recovery" in progress it certainly isn't trickling down to these particular Americans.

And it's certainly no picnic for "older" unemployed workers either, those 55 or older downsized at no fault of their own because they're easy targets for budget cutting with salaries and/or benefits that have grown to certain levels due to decades of dedicated service. Ageism in today's job marketplace is blatant. Companies know that "older" people in this economy cannot afford to litigate so hiring managers everywhere are boldly instructing their HR gatekeepers to eliminate any candidate resumes with 15, 20 or more years of experience, no matter how impressive the credentials, and even though most of these candidates would be more than willing to take substantial pay cuts just to secure a job. The fallout from this practice is not only an incredible "brain drain" of quality candidates forced from the workforce but the long-term economic consequences of "older" workers that basically fall into a growing involuntary retirement category who by necessity must prematurely tap their retirement nest eggs merely to survive. And if the nation's Social Security system is not already under tremendous stress, record numbers are also being forced to take early retirement at 62 despite decreased benefit levels. Delaying retirement to the full benefit stage is no longer an option because no one will hire them and they need the money. Granted there are exceptions to this rule where internal politics, nepotism or a "good old boy" network exists but these more fortunate situations are far outnumbered by the masses of ordinary Americans.

So in the final analysis the term "recovery" is diluted by a new economic reality for 2010 and beyond. A once relatively prosperous middle class is now under siege. Without meaningful full-time replacement jobs (and discounting all of the "job creation" statistics bloated with temporary or part-time positions) huge middle class numbers that in the past could be counted on to fuel a true economic recovery are just no longer there. By necessity, these once dependable consumers are dialing back their lifestyles big time because many may never work again, especially "older" Americans, or, alternatively, must compete with larger numbers of Americans forced into minimum wage jobs paying a fraction of their former salaries (if they can get by the "overqualified" employer argument, that is). Instead of a consumption mode, these middle class Americans must revert to a survival mode. The sooner these economic recovery optimists recognize this new societal economic landscape and, more importantly, the sooner the Obama administration and the Congress examine more closely the statistics they are being fed and recognize the true crisis and importance in America today with respect to job creation instead of partisan bickering the better it will be for millions of Americans. How "recovery" is defined from this time forward will be far different from the past in order for the term and its users to accurately retain their credibility with a majority of Americans.

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