What U.S. Economic Recovery? Five Destructive Myths

Nobel laureate Michael Spence, author of The Next Convergence, has looked at which American companies created jobs at home from 1990 to 2008, a period of extreme globalization. The results are startling. The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced. "When I first looked at the data, I was kind of stunned," says Spence, who now advocates a German-style industrial policy to keep jobs in some high-value sectors at home. Clearly, it's a myth that businesses are simply waiting for more economic and regulatory "certainty" to invest back home.

And let's not forget the youth-unemployment crisis. There's now a generation of young workers who are in danger of being permanently sidetracked in the labor markets and disconnected from society. Research shows that the long-term unemployed tend to be depressed, suffer greater health problems and even have shorter life expectancy. The youth unemployment rate is now 24%, compared with the overall rate of 9.1%. If and when these young people return to work, they'll earn 20% less over the next 15 to 20 years than peers who were employed. That increases the wealth divide that is one of the root causes of growing political populism in our country. While Republicans have pushed back against spending on broad government-sponsored work programs and retraining, it would behoove the Administration to keep pushing for a short-term summer-work program to target the most at-risk groups.

I am interested in what PFer's below the age of 30 have to say about the above paragraph, particulary the section I highlighted. What plans do you have to adapt to this, and even turn it to your advantage ?

One friend who graduated in finance is working at a coffee shop.

"Nobel laureate Michael Spence, author of The Next Convergence, has looked at which American companies created jobs at home from 1990 to 2008, a period of extreme globalization. The results are startling. The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced. "When I first looked at the data, I was kind of stunned," says Spence, who now advocates a German-style industrial policy to keep jobs in some high-value sectors at home. Clearly, it's a myth that businesses are simply waiting for more economic and regulatory "certainty" to invest back home."

My bold
I don't doubt this at all.

We faced similar job challenges in the late 1970's and early 80's in the Rust Belt. Fortunately for us, if we headed West or South the prospects improved. Now it's not so simple.

I know several recent college grads that are going back to school - they hope things will be better in 2 years. I also know several unemployed adults that are back in school.

WhoWee,

I know a couple of young graduate's doing the same thing, going back for masters, and with it a ton of debt that comes along with it. I work with one guy who pays 800 $ a month to pay off 140K worth of student loans (undergrad degree only). He will be 40 before he can even think of buying a home. It just doesn't seem fair. I really feel for some of these people.

Rhody...

Oddly enough this is the most hilarious irony being a physics graduate. In a city with 17% unemployment, I don't know any physics grads without a middle class job (who all graduated within the last 2 years).

Another commentary indicated that 2% growth in the GDP is the new norm.

What city?

My oldest son now 27 could not find work after his B.A.. He worked chopping firewood, doing yard work, cleaning out freezers, etc. His highest standard of living since graduating was the year he taught English at a university in China. He is in the US now and thinking of returning to China.

It is a global village no point in staying in an area that has no jobs. Go west young person far far west.

My friend's son has been teaching English in Russia for about 6 years. He said the pay is modest by US standards but he doesn't have many expenses. I believe his housing and transportation are supplemented. He's enjoyed the experience and has traveled a good bit.

My son also taught in Russia for half a year. They pay a lot less than China. Or more carefully pay relative to expenses is much less in Russia.

Oddly enough this is the most hilarious irony being a physics graduate. In a city with 17% unemployment, I don't know any physics grads without a middle class job (who all graduated within the last 2 years).