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The Youth Unemployment Bomb (businessweek.com)
108 points by alexwestholm on Feb 8, 2011 | hide | past | favorite | 156 comments


I'm most worried not for the numbers as for the corrosive effect long periods of unemployment have on employability. You lose the simple habits which are required for lots of gainful employment, such as "getting up before 9 AM consistently" and "working mostly non-stop for 8 hours a day".

I see this in a lot of these articles where folks will, e.g., claim they applied for 15 jobs in 3 weeks. At some point the new normal for him has become that he works 15 minutes a day or less on his job search. (Relatedly: some days I wonder if the single most effective form of unemployment relief would be teaching people that sending out resumes is for suckers.)


(Relatedly: some days I wonder if the single most effective form of unemployment relief would be teaching people that sending out resumes is for suckers.)

The welfare-reform efforts of the past 15-20 years in most western countries have tended to do exactly the opposite, oddly enough. Out of a worry that people were just receiving benefits without really looking for work, you must now demonstrate that you're actively sending out resumes and filling out applications. Some jurisdictions even require you to show up every so often to a center where they help you search job listings and send out resumes.


John Maynard Keynes did suggest welfare should be employing people to do things, even pointless things like building giant structures and them demolishing them again.

It seems silly, but if we truly recognize that long term unemployment has a horrible way of killing one's ability hold a job, then Keynes idea is rather practical.

The government not as welfare but simply as employers of last resort. Much like the Fed is the lender of last resort.

Obviously this has the danger of government employees lobbying for ever better pay until it is economically irrational for people to seek work in the private sector.


How about putting back together giant structures that are falling apart? Our infrastructure is rotting away --- that Minneapolis bridge collapse in 2007 was a bit of a wake-up call. There's no shortage of stuff in the United States that needs to get fixed.


You mean some sort of administration that would give people money to work on projects? Like a Work Projects Administration?

Sorry, Roosevelt did that, but nowadays I am pretty sure it would be called socialism.


Not nearly as socialistic as Nixon's mandatory wage and price controls. (Cue Glenn Beck rant: there's a reason Nixon went to China!)

You're quite right about the rhetoric, but it's completely unmoored from reality.


> You mean some sort of administration that would give people money to work on projects? Like a Work Projects Administration?

Those sorts of projects/spending got killed in 08 because womens' groups objected to money going to "burly men" projects.

http://www.weeklystandard.com/Content/Public/Articles/000/00...

Of course, govt spending is always political. At one time, one could both pay off supporters and build up the country. When we have to choose, the former always wins.



So...when the government pays people to do things, that's socialism?

I seriously doubt that's how a governmental program training and employing the youth to repair the infrastructure would be viewed, and especially not as proposed to the more socialistic policy of welfare.


So...when the government pays people to do things, that's socialism?

Of course, but the statement itself is a bit meaningless and appeared to me to be flippant, at that.

When the government pays people not to do things, that's a more extreme form of socialism.

To me, the question is one of subsidy. UI[1] is a 100% subsidy. A WPA type of deal could potentially be no subsidy at all, at least to the individuals. It would merely be directing tax money at a particular kind of boondoggle.

[1] Notwithstanding that the I stands for "insurance," since it's structured as a tax, at least here in the US.


Seriously? Have you lived in the US for the last 10 years or seen a Republican recently? rst, if anything, understated how Republicans would attack such a program.


Wouldn't you need some specialized skills for that? Trusting unemployed psychology majors with bridge reenforcement doesn't inspire much confidence.


After the housing bust, I'm thinking you could find plenty of construction workers with necessary and/or relevant skills.


"unemployed psychology majors" could do some work in special education or nursing homes for disabled and old or half-way homes for addicts, etc.. . Their skills would definitely be of much help there.


You only need one brain to tell the hands what to do.


Wait, didn't we already drop hundreds of billions fixing that? Or was that money just wasted?

http://www.recovery.gov/Transparency/RecipientReportedData/P...


Not all of it, and what did wasn't enough to fix much of what's broken.


"John Maynard Keynes did suggest welfare should be employing people to do things, even pointless things like building giant structures and them demolishing them again."

In his lifetime though we already did this. If you were too poor to get by then you could go live at the town farm where you would receive public assistance in exchange for working.

http://en.wikipedia.org/wiki/Poorhouse


You would think that all a government has to do is supply assistance to trades people to hire/train apprentices. I had a cousin go into the Navy just to learn a trade which upset me, as in previous decades he could have learnt the same trade by entering an apprenticeship. I belive some countries like Austria still support these programs, I have friends whose teenage boys left school early but were able to enter a subsidised apprenticeship rather than drop out and become unemployable.


I wouldn't have them do utterly useless jobs like this, but rather government jobs that need doing but don't take years of training. There will always be some churn of unemployment anyway, we should take advantage of it. Why hire someone to do this kind of job when we have people literally sitting around looking for something to do?

Of course to balance this you would need to raise unemployment benefit and get rid of this shameful "food stamp" concept. Everyone on unemployment gets a fair living wage, they just have to work part time in some government job with bursts to full time when needed (e.g. holidays, etc.).


Hmm interesting; I vaguely remember that, but had forgotten about the concept and term. Looks like it's still a fairly active idea being debated by economists, though not so much by politicians: http://scholar.google.com/scholar?q=%22employer+of+last+reso...


There is a term for that, in Czech: http://en.wikipedia.org/wiki/Hladov%C3%A1_ze%C4%8F


If he truly said that, I am even less inclined than before to see the merit of his theories. Not that I know them in detail, but this makes me not want to know them.

If people are still able and looking for jobs, their time is better spent looking for jobs than doing pointless tasks. This can be a real problem - writing applications (if that is your approach) takes a lot of time, and if you do 14 hours of taxi driving per day, there is less time for finding that job that would suit you better.

Then there are the people on welfare who are really sick or disabled - why should they have to build giant structures, and how?

Lastly there might be people exploiting the system, but I suspect they are not that many. At least were I live, being on welfare is actually work, anyway, because you have to wade through tons of bureaucracy to get it and stay on it.


I agree, but Charles Dickens made that politically impossible. "Are there no workhouses?" Etc.


WPA was long after Dickens.


I don't know what that is, some American thing?

Here in the UK every time it's suggested the word "Dickensian" gets bandied about and that's that.


It's the main historical example of a make-work program in the U.S., during the Great Depression: http://en.wikipedia.org/wiki/Works_Progress_Administration

Perhaps because the WPA is a lot more recent, it seems to be the thing Americans think of when a make-work program is suggested. I don't think I've ever heard them criticized as Dickensian; instead they tend to be criticized as socialist.


Paying people to make stuff isn't a bad idea, if your government would be doing public works (e.g. roads) anyway, you just get to do that stuff a bit quicker.

Paying people to do made-up jobs (e.g. most of the UK public sector) just destroys wealth.


If the jobs are truly pointless, they're not destroying wealth. Rather, they redistribute wealth. And even if they do destroy wealth (and you need to provide examples of specific positions and why they are counterproductive and not just unproductive) the destruction may be evened out by keeping them in the working mindset and being a normal member of society.


Tax money that goes to unproductive areas of the economy presumably must first be taken from productive areas of the economy (when I say productive areas I mean areas like manufacturing, high tech, agriculture etc. - they create wealth from scratch.) So redistributing tax from a productive area to an unproductive area acts like 'drag' on a car or airplane. The less 'drag' (less tax), the easier the 'vehicle' (the transport kind or the wealth creating kind) can reach peak performance.

It's not really wealth destruction as you've noted, but it does hamper the countries business environment that could otherwise potentially lead to even more productive jobs as companies can afford to hire more productive people.


It's just as easily to set up a useless, profitable company as it is to set up a useless government branch. So the assumption that the taxed area of the economy is productive is somewhat suspect. It's in fact possible to set up large, destructive, private bureaucracies that turn a profit. Our mounds of financial regulations do their best to make that hard, but the fact is people still make a lot of money doing it. Wealth creation and profit are two very different things.

Giving people pointless jobs creates stability, which in many cases is more valuable than any sort of physical good.


And let's remember that the argument in favour of government work programmes isn't solely to be contrasted with not-spending-the-money... it's to be contrasted with welfare.

So the society/government has, broadly speaking, three alternatives (and a continuum therebetween):

* Do nothing for the unemployed * Give the unemployed some money * Act as employer of last resort

Doing nothing acts as less drag on the productive aspects of the economy, and also it's really easy to implement. The downsides include civil unrest, and also arguably have long-term negative consequences on the productiveness of the entire workforce (compare with economically-inefficient government subsidies of shipbuilding in nations that wish to maintain the ability to go to naval war, e.g. the US).

Giving them money eases the civil unrest problem. Yay, less revolutions! And hopefully for people who go through temporary rough spots, it permits them to reenter the productive workforce, instead of falling into inescapable poverty. The main downside is screwed-up economic incentives for the unemployed.

Work projects have no greater drag on the productive economy than EI, but might have less drag. Also, they act as work experience, and they eliminate the wicked incentive for the underemployed workers. BUT, they create screwed-up incentives for the employers, who now have a source of cheap labour, which they are now incented to victimize. (Compare with the incentive problems with US for-profit prisons.) Work projects may prevent recipients from seeking new better jobs (through being busy during the workday). Work projects compete at the low end with non-government-run businesses, in ways that are sometimes seen to be economically troubling (I don't follow this argument, myself).

So, sometimes the arguments against work projects also apply to 100% subsidies: "that's anti-capitalist, anti-competitive, pinko commie socialism". But there are some other arguments that the left levy against work projects, like the victimization/incentive issue.


If these people would otherwise be unemployed, and if their wages are modest, then it doesn't destroy any wealth, and if what they do is even slightly useful, it creates wealth.



I have a sister who is unemployed in California (Pasadena), so I will make a few anecdotal observations. She was an honors student in college and taught special ed for some years before moving on to manage some group homes for the mentally impaired. She then went into home health care and became unemployed when a job offer fell through.

During this time (over 1 year), she has applied for many jobs (including an interview with a nursing home facility (sorry, don't know the details) on a reservation in New Mexico, where she would have to commute an hour each way to work--where she was a good fit and the daughter of one her teachers arranged for the interview). Some have been at traditional companies (HR), others have been at Target, Macy's, and other temporary jobs. Here's what she's found:

1) If you have a college degree, it's hard to get hired even for jobs that are 9 months with no chance of permanent employment, because you are "over qualified" 2) These unemployment centers are fairly useless for those with an education. If you go in everyday and a job happens to come in that matches you, then good. Otherwise, you're better off searching the internet yourself. Also, most of the money that's provided for training is for pretty basic jobs, like "medical coding" which seem like good outsourcing targets. Even though you go through the hoops for these, getting authorized to take these certificate programs can be Kafka-esque.

For my sister, while she's still looking for a job, she's decided she wants to go the entrepreneurial route. She got a chance to pitch her idea to an incubator in Ann Arbor, but she only had crude drawings and while they liked the idea, they really wanted a prototype. She is not a coder, so she's enrolled for some courses at the local community college.

But, I will say that I've seen some bias against hiring people who have been unemployed for some time. For example, a friend works as a pharmaceutical researcher and was told by recruiters that they are only interested in people who currently are employed (she was)...I think there's a tendency to believe that the jobs are out "there" and people are just too lazy to find them.

However, I'm increasingly believing that we've moved to a two fluid model (to coin a physics phrase) where for people with specialized skills, or experience (for example, I've talked to people in sales at IBM and other companies who have told me that they've found it hard to hire people with the skills they want), the job market is actually not that bad and they are being actively recruited. On the other hand, there are people with lower skills and for them the outlook is rather bleak.


I've never understood how being "overqualified" is a problem. No one says you have to list your degree or make mention of it. Just pretend you don't have one? What am I missing here? Are people too egotistical to accept a job at McDonald's when they have a degree? It has always been my opinion that any job is better than no job. If you need money, take what work you can. There's nothing that says you can't keep looking for a better job while you are working a holdover job. And, just like omitting mention of the degree, when you do apply for jobs that you really want, now or later, you don't have to put on your resume that you worked at McDonald's for three months while you were looking for better work.


For an employer there is a real cost associated with finding and hiring a new employee. The worry is that someone who is over-qualified is going to continue to be looking for higher-paid/higher-skilled work that is a better fit for them. That employee will also be generally less concerned about their future career path at the job they are over-qualified for, which can lead to reduced quality of work. In a customer-facing role at a retailer this can come through as a bad or passe attitude, which won't win over your customers.


No one's arguing (well, not much) that the employers don't have a decent reason for this. The problem here is that the incentives of employees and their employers are becoming more and more at odds with eachother.


That's exactly the problem. From what I've seen, the reason people don't want to hire overqualified applicants is because they know those people would be doing exactly what you are advising: coasting in the job for 3 months while waiting for something better to come along. There's nothing wrong with that from the point of view of the person, but what about the company? They spend time and money training someone, only to have the bail at the first sign of greener pastures? Where's the return on investment there? Employers tend to prefer to hire someone who at least seems like they might stick around long enough for them to get their money's worth.


Same reasons many people don't like to hire contractors as permies.


As someone who has omitted their college degree and left off that I'm currently in a grad program, you try that in retail and they ask "well, what have you done all this time?" The time needs to be accounted for.


Could you say that you were helping a family business or living abroad?


You really, really, really don't want to give false statements on a job application. That's usually grounds for termination should it come to light.


I've confessed to the time in college. Lost me a shot at the 4:30-9 (or so) shift at the local coffee place. The manager had been kind, friendly etc. before I said that.

To mix it up I've also said I'm in school now, hence some hours I can't work, and don't show the degree or say that it's for a grad program. Just let prospective employers think it must be undergrad.

Really since losing my job (started grad school part time before then) as tough as it is being "over qualified" people don't want students either. A number of places have said they require "full-time" availability even for part-time employees because the hours change week to week.

For those who say the jobs are out there and that Gen Y is lazy, try losing yours. It can suck. Bad.


Being overqualified refers to employers turning applicants down, not job seekers considering themselves too good for the job. It doesn't make sense for an employer to spend the time/money to get you trained and productive if it's obvious that you're going to leave as soon as possible.


Pizza delivery guys with PhD's used to be common in Bloomington, Indiana in the US. I'm not sure if that's still true, but if I were an employer there, I'd try to find out if I already knew their thesis adviser in order to get some clue about how long they'd be sticking around and if they were about to get a grant that would let them stop working.


Someone hiring for a cashier position would be uncomfortable with your "just don't tell the whole truth" attitude.


The obvious solution is temping - there's no expectation that you stick around anyway.


Alright, she was an honors student - what skills did she learn?


Presumably skills for nursing the mentally infirm, as the account of her employment after her education indicated. The statement that she was a honors student has nothing to do with her education, but is an expression that she's devoted to her tasks.


The friends of mine who have cared for the mentally infirm and invalid held a graphic design degree and a CNA with a high school diploma, respectively.

I do not debate her devotion to her education or her job duties, but the misfortune of modern youth is that our educational backgrounds often bear no resemblance to what will bring value to an employer.

If her resume says "BSc, Disadvantaged Female Chimpanzee Sciences, Harvard," it might well be that she studied hard. However, her studies are likely to have done little to improve her value to most employers.


Her degree is in special education.


Has she tried working with her college's career services? Most of the major colleges that I know of have a separate set of people (from their undergrad folks) that are dedicated to helping alums get re-employed.


You were probably down voted for 1) it is assumed that she has already gone this route, 2) the departments in undergrad career placement (outside of top tier schools) are normally as effective (worthless) as Unemployment offices.


Perhaps the time has arrived to dust off the old operating manuals for the CCC and the WPA. For those who don't recognize the acronyms, those were 2 of the major 'New Deal' programs during the 1930's era Great Depression. They were intended to get people back to work, and to try to restart the economy.

The general objective was to renew/refresh our public infrastructure (via WPA) and to reforest-ate clear cut areas and improve problematic drainage (via CCC). Both programs were accused of being socialist (and perhaps they were).


I've been experiencing this problem over the past few weeks.

I've been working to find jobs that meet my fit (fairly high education and experience in a specific field) but many of these position take a week or two in order to schedule a full day of interviews.

Yet, in order to get any sort of benefits (I'm in MA so, I can't drop off health insurance even for a short time) I need to send out resumes for obviously bs jobs.


This is so true. I have a friend, fresh out of college with a Masters degree in CS from a German university, who has been unemployed for about a year now and in that time he has sent out maybe 10 to 15 applications. I carefully try to nudge him in the right direction by keeping an eye open for job offers that might interest him or by suggesting programming challenges/projects that could improve his skills.

But instead of working on things that could improve his chances to get a job, he just watches TV all day long. If he put in only maybe three hours of open source coding time a day, his chances to score a job should increase tremendously. If you are an unemployed software developer, it is much easier to stay on top of things than in many other professions but in the end you have to have the motivation for it.


Honestly, if he put in three hours of ANYTHING constructive a day he'd be much better off than he is now.


there aren't that many new jobs added to all the jobs sites every day, so if you limit yourself just to sending resumes within the closest 100 miles, 15 minutes a day can be as much as you can actually spend.

and yes sending resumes isn't as productive as having connections, but a lot of people just don't have that many connections that they can tap to get them a job


Re: #1, great! That means you have 7 hours and 45 minutes left each day to browse the Yellow Pages for companies that employ people in your line of work, look up their websites for job ads, find out who their HR managers are and call them to see if there are non-advertised job openings, participate in online forums where there are people who work in companies you want to work and who could be looking for people, etc. etc. The whole point is that just sending out some resumes each day is the wrong approach to finding a job.


have you had that work for you or for anyone yo know? or are you just throwing it out there as a way to do something.

it's easy to say go walk from business to business shaking hands asking if their company is hiring, and yes for a few people that might actually work...but for the vast majority it'll be an exercise in futility.


I know of one person who got a job that way. He was pretty damned good, and had the benefit that he was 18 at the time and didn't know that going door to door "never works."


was it for a real job or for a minimum wage type job(McDonalds etc)


Please don't be a smartass. It was a real job as a software engineer at a DARPA research lab. Like I said, he was good.


Congrats to him! 10 cold-calls a day to relevant companies and specific hiring manager (jigsaw, spoke, linkedin) is highly effective at gaining 1st interviews. Linkedin just for "cold connection" or "cold email" contact works very well also. With recent grads / the younger work force tends to apply for jobs outside the realm of their abilities. Such as, 3-5 years of X and X. My own favorite (I was unemployed for 6 months post grad in 2009) was contacting companies / persons and stating something to the effect of "I know you are looking for someone with 3-5 years of experience. I am a recent graduate with 1-2 and wanted to know if you were considering more junior candidates. Could we setup a phone or 1st interview?" Or, volunteering for free.


It was the DARPA research lab next to the McDonald's.


It certainly will be an exercise in futility if that's what you think it is before you even start.


same question for you...has it worked for you or anyone you know?


Yes.


worked for me too.


Actually, one difference between poor and rich is in the reach of their social networks...

For some people (see my other post about my sister), they spend part of the time crafting resumes for companies either in their field, or trying to get temp jobs, volunteering, and trying to intern in hopes of getting a job in a new field. If that doesn't fill the time, they may try to take classes, or try to start a business (but that requires skills and funding).


So make connections. People with day jobs manage to do this, too: imagine how easy it is with lots of free time.


Except that they make these connections because they're working. Once I arranged to work weekends and have Monday/Tuesday off. I thought it would be so great because I wouldn't have to fight the crowds. So I called up my friends... but they were all working. I switched back to normal as quickly as I could.

If you're not working, you are completely out of the loop of those that are.


easier said than done

you have to think outside the programmer mindset where there are lots of opportunities to meet people. For other careers, the only way to meet people in your industry is through a job or a conference.


I keep forgetting that the thriving tech scene in rural Japan skews my perspective so much. Seriously, though: if this is true, shouldn't programmers be basically incapable of dating (skew in industry, barriers to meeting outside)?

It can't be harder to meet people than to date people. They go to places and do things. Well known places, most of which are in the phone book, many of which are open to the public, etc.

I mean, take the automobile industry. I think anyone on HN could find a car salesman or MechE willing to talk to you in maybe two phone calls. There, you aren't a stranger anymore. (I further predict that most MechEs would fall over themselves lining up to talk to someone who sounded interested in torque ratios or whatever.)


Programmers are basically incapable of dating...


No other comment I have ever read on HN has made me as angry as this one.

My last emotional response comment wasn't such a good idea, so I'll leave you to your bigotry.


Therapy can assist with relationship problems as well as anger management issues.


I'm about to avail myself of some cognitive behavioral therapy.


The local daycares seem to be exclusively populated by kids of engineers, so I question that :)


To date people, unless you have the misfortune of being gay (only in the sense that it limits your pool), you've massive numbers of singles wandering around...not nearly so common are the people who are connections, and certianly not at the bottom.


I think it's a question of what comes out of making these connections. For example, there are formal "networking" events. However, what are the statistics of job offers that come from these?


I've been very careful to craft my resume for the job applied for and to only apply for those where I have a shot.

1 interview out of 3 resumes seems like a good rate. I've only sent three, but that's because I realized the economy wasn't getting better any time soon.

"Ran an advice blog" definitely looks better on my resume than "got really good at writing resumes."

I'll start sending them out again once unemployment drops a couple percentage points, but I've made more money from this blog than I would have lost driving around asking for jobs (which is a double digit number, but still meaningful).

I mentioned this here some months ago in a similar thread, and I'm only more sure of the value in doing this now. :)


Not applying for work because the unemployment rate is high is mind bending to me. Can you explain your reasoning? This sounds like it is full-stop guaranteed to mean several hundred thousand people get jobs before you get considered. I like the blog idea more than playing xBox but the commitment strategy here strikes me as severly suboptimal. (You may wish to recalibrate your understanding of meaningful: delaying your start date by 24 hours costs more than double digits.)


I spent a year after college looking for jobs to apply to. I found three I was remotely qualified for (those I applied to).

If I applied for even a small portion of the jobs that pop up on local job boards, it would consume every hour of the day.

In a normal economy you'd see entry level jobs there. But every job wants years of experience and specialized certifications. I don't even have the means to get the certifications.

Taking an alternate route is a coping method. I still probe the job boards during the day.


One piece of advice: don't let the job ad make you think you're unqualified and stop you from applying. Employers often a) don't know what they want/need b) throw everything they can think of in that ad. It may be a challenge to get past the naive recruiter without all of the skills mentioned on your resume, but it can be worth it because the interview will bear out whether you'll actually be useful to the hiring manager.


I find it very hard to understand how an employer could not know what they want or need in a new employee. I understand that it happens, but I have no idea how someone decides "hey, we need a new person" and has no idea what they would like that person to do. Hiring is a hard enough problem without handicapping yourself out of the gate by not having and expressing a clear idea of what you're looking for.

How hard can it be to say "we're looking for someone who knows enough Java to follow our codebase without needing their hand held. We are also dabbling in Python so that will be a plus if you know it."? Why can't a req for an experienced engineer read "We need someone reliable and knowledgeable enough that they can do all the handholding our other developers need."? There must be some part of this that I'm missing, because actually writing a req seems too damned simple to be this FUBAR'ed.


I find it very hard to understand how an employer could not know what they want or need in a new employee

Oh, that's easy. The manager you'd be working for, the budget holder he reports to, and the person who writes the ad don't know each other, have never met, and have never spoken or even communicated except via filling in forms designed by HR people who know HR but know nothing about the industry.


I've heard people claim that employers will put out jobs with ridiculous requirements to fill some "we tried" quota for a regulation with a name that escapes me.


They also usually inflate the requirements a bit on purpose, on the basis that they will get fewer unqualified applicants that way. They get lots of unqualified applicants without doing that because "everyone knows" that employers inflate their requirements a bit on purpose.


Companies always ask for more than they need, just as candidates often claim more experience than they actually have. Don't be intimidated by what they say they want.


1) I think if you're unemployed, I think the OP is correct in saying that it's better to have something on your resume, than a large gap where you were applying for jobs 2) Some people are able to transition. I had a cousin who used to work at a factory. They downsized and he started flipping houses. He saw the market drying up (in Michigan, so he didn't get rich off of it) and went back to school and now is doing Flash design. But, on the other hand, I have cousins who used to work in the auto industry (suppliers) and got laid off. One took advantage of retraining is now doing medical coding, but as she told me, it's hard to switch after spending 18 years working on the line at a factory. One cousin hasn't been able to make the switch and moves from temp job to temp job. Others have looked for work, and with their skill set, the jobs just aren't there...


I think the bigger picture is that at least in the US, most of these people will never get middle class jobs because they just aren't smart enough to really contribute anything.

If unemployment among youths is around 50% or whatever today, then just imagine what it will be in ten years when gas is $8 per gallon and we're facing food shortages. There is simply no way this is going to solve itself without massive government intervention, and I have trouble seeing that happening considering that there has been basically zero progress made by the federal government since I've been alive.


This is the Zero Marginal Product hypothesis. Assorted econobloggers have been engaging in quite a bit of discussion of it. For more info:

http://www.marginalrevolution.com/marginalrevolution/2011/01...

http://www.marginalrevolution.com/marginalrevolution/2010/07...

http://econlog.econlib.org/archives/2010/07/the_zmp_hypothe....

It's certainly consistent with the data. The data shows that corporate profit, GDP and industrial production have all recovered. This is exactly what you expect when a recession ends and aggregate demand recovers. However, employment did not recover, suggesting that the workers unable to find a job have a marginal product close to zero.

http://research.stlouisfed.org/fred2/series/GDP

http://research.stlouisfed.org/fred2/series/CP

http://research.stlouisfed.org/fred2/series/INDPRO

http://research.stlouisfed.org/fred2/series/CE16OV


Thanks, I'll read over these on the weekend.


Alex, you might be interested in Lang, Siniver, 2011[1].

What is interesting in this particular study how quickly the market acquires the information.

So, if the unemployment is a global phenomenon across many different markets, in the same civilisation, it is possible that it changed somewhat permanently.

(just an idea; I'm not fully convinced as well)

[1]. http://papers.nber.org/papers/w16730


"Our results are therefore consistent with the view that employers use education information to screen workers but that the market acquires information fairly rapidly."

I'm potentially interested in reading this but I have to ask, are they measuring the acquisition of information by changes in employment status and salary? Because if so this seems like begging the question.


Yes. It uses self-reported wages.


Agree. For a good portion of 20th century majority of such population has been able to find jobs in manufacturing or some sales role. While competition from Asia eroded the first sector, Internet slowly eliminates the middlemen in other sectors. Travel agencies and newspapers first, retail associates, car salesmen and real estate agents next.


The simple answer is: These kids are training for the wrong jobs. College (in many areas) is a waste. Trade schools (vo-tech) offer a (almost 100%) guarantee of employment.

A trade is a gateway to self employment (once you have your hours in for licensing).

My brother has his master electrician's license in two states. He has more work than he knows what to do with.

I have two friends who recently went back to school (one finishing undergrad business/marketing the other MBA). Their job outlook is _poor_. The market is flooded with people that have _soft_ skills.

Our company is still hiring network technicians. Again a two year degree with _hard_ skill requirements. (Cisco certs, etc).

Tech school is way cheaper than college and your job prospects are good.


I started on a networking specialist degree (2 year community college) before the economy tanked, and finished just after. I went in figuring I'd be dead before a technology would exist to automate it.

I'm sure I'm right, but I didn't think about how a recession would impact it.

On the plus side, there were endless streams of entry level positions I was well-qualified for before things went south, and I'll probably be able to find a job related to my degree when the economy starts improving.


I agree that there are certainly plenty of opportunities presented by developing a technical skill. However the unemployment rate is only 4.5% for the college educated vs 10.7% for high school only and 8.4% for an associate degree/some college. So maybe college is not as much of a waste as you might think.

http://www.bls.gov/news.release/empsit.t04.htm


Yes but show me the figures that break out Electrician/Plumber/LPN from 2 year business degrees.

My sister in law got a 2 year biz degree. You're qualified to be a secretary (without experience). She went back and got LPN with an additional year at school.

Her job outlook is amazing. Her income is 2 to 3 times what she could have made with only her business degree.

Associated degree/some college includes a lot of things like child care/business, etc.


http://www.ted.com/talks/mike_rowe_celebrates_dirty_jobs.htm...

I have a few trade's friends, and a few programmer friends (well, one hacker, one QA / side project hacker). The plumber friend makes $50k in this down market, typically $80k at 1-3 years of experience. The hacker / QA make ~50-55k at 2-4 years. Its all relative to your skills and contributions, but, I am only agreeing that you can make "good" money at a trades skill.


Couldn't agree more. I know plenty of people that do masonry, electrical work, etc.. and they're busier than ever.


Our wealth has grown exponentially in recent decades but poor people still work 9 to 5 or more.

Wealth is manufactured by machines not people.

Some generation has to close the gap between how wealthy society is and how much average member of society has to work for same basic needs.

You can't make basic necessities cost always nearly same amount of work because that work thanks to technology is producing more and more wealth.

You can't keep prices of meals to be higher than recent technological wonder. Someone at some point will call bullshit on that. "My sandwich is not worth same amount of wealth as 4GB flash thumb drive. They just want me to pay this much for sandwich to keep me working because I need sandwich. I'll just pass on working, buy cheapest food and see how this works out. They don't seem to want me in their companies anyway."

This unemployed generation can be the first one to take advantage of wealth humans get from technology en masse without need to cunningly trick everyone else out of their share. They'll get their share just by being more or less human dead weight that rich won't be able to shake off because they can't kill them or even let them die because there's for the first time too many of them.


"Our wealth has grown exponentially in recent decades but poor people still work 9 to 5 or more."

Our poor people, at least in the US, are a lot more wealthy than they were several decades ago. Actually if you dig into the economics of deciding how much to work and for what, how preferences vary depending on how much of a resource you have and how cheap a lot of things are compared to decades ago, this is neither surprising nor terrible, nor really even preventable without actually going down to these people and dictating their economic preferences and proper lifestyle to them, which I at least find a repugnant idea.

If you want to live a simple life with nothing from beyond 1950, no modern medicine, no modern tech gadgets, nothing beyond 1950, you can do it substantially cheaper. But it's just so easy to work a few more hours and get the modern stuff that it's the rare person who will choose to do this.

If there's anything to be horrified by, it would be the cheapening of debt that has made it too easy to get buried under it vs. decades past.


Our wealth has grown exponentially in recent decades but poor people still work 9 to 5 or more.

This is a myth. The poor work very little - their full time labor force participation rate is only 10% or so (this includes both the employed and unemployed). 80% of the poor don't work at all.

http://www.bls.gov/cps/cpswp2007.pdf

(Before you criticize this statistic as being too simple, go see this thread where I answer many objections: http://news.ycombinator.com/item?id=2129845

In particular, this is not a result of the poor being disproportionately old or young.)


You were called out for it in the previous thread, and yet you're still including children in your full-time labor force participation rate.

And as near as I can tell you've conjured your "80% of the poor don't work at all." figure out of thin air. You don't adequately address the objections in the linked thread, and you're making the same oversimplifications.


You were called out for it in the previous thread, and yet you're still including children in your full-time labor force participation rate.

Yes, Michaelchiasri raised this objection. He didn't bother to do the math, which showed that it has little effect. I addressed his concerns in the reply to that comment: http://news.ycombinator.com/item?id=2130441

It's very strange - you read his comment, but not my reply to it. Let me repeat one more time, since apparently you are using a browser in which links only work sporadically: Poor adults have a full time labor force participation rate of 15% (vs 73% for the nation as a whole), rather than 10% for all poor people (and 65% for all Americans). The low labor force participation rate of the poor is not caused by demographic differences.

Labor force participation rates usually include everyone. If you object to this practice, take it up with the BLS.

And as near as I can tell you've conjured your "80% of the poor don't work at all." figure out of thin air.

That's because you didn't bother reading the first paragraph of the BLS report I linked to. I'll give you a hint: 7.5 million is about 20% of 37.3 million. Before you object that I'm including children (just like the BLS does), the figure rises to 31% if you exclude children (and to 85% for the USA as a whole).


>Yes, Michaelchiasri raised this objection. He didn't bother to do the math, which showed that it has little effect.

It increased the figure from 10% to 15%. Why are you deliberately deflating the figure when it still appears to support your point after removing children?

>I'll give you a hint: 7.5 million is about 20% of 37.3 million.

That figure is the percentage of the poor who work or look for work for at least 27 weeks per year, not the percentage of the poor who do any work or look for work at all. Farm laborers for example could work 50 hour weeks May-October and only hit 25 weeks. And they would be poor.


Please go read Howard Zinn. You are 100% wrong. Poor people work more hours, harder jobs, more dangerous jobs, are more likely to die at a younger age etc etc. Everything is worse for poor people and your argument of just blaming the poor is counter-productive and myth.

Zinn: There are two issues here: First, why should we accept our culture's definition of those two factors? Why should we accept that the "talent" of someone who writes jingles for an Advertising agency advertising dog food and gets $100,000 a year is superior to the talent of an auto mechanic who makes $40,000 a year? Who is to say that Bill Gates works harder than the dishwasher in the restaurant he frequents, or that the CEO of a hospital who makes $400,000 a year works harder than the nurse, or the orderly in that hospital who makes $30,000 a year? The president of Boston University makes $300,000 a year. Does he work harder than the man who cleans the offices of the university?

Talent And hard work are qualitative factors which cannot be measured quantitatively. Since there is no way of measuring them quantitatively we accept the measure given to us by the very people who benefit from that measuring! I remember Fiorello Laguardia (US Senator) standing up in Congress in the twenties, arguing against a tax bill that would benefit the Secretary of the Treasury, Andrew Mellon, and asking if Mellon worked harder than the housewife in East Harlem bringing up three kids on a meager income. And how do you measure the talent of an artist, a musician, a poet, an actor, a novelist, most of whom in this society cannot make enough money to survive - against the talent of the head of any corporation. I challenge anyone to measure quantitatively the qualities of talent and hard work. There is one possible answer to my challenge: Hours of work vs. Hours of leisure. Yes, That's a nice quantitative measure. Well, with that measure,the housewife should get more than most or all corporate executives. And the working person who does two jobs -- and there are millions of them -- and has virtually no leisure time, should be rewarded far more than the corporate executive who can take two hour lunches, weekends at his summer retreat, and vacations in Italy. ... But better still, why not use as a criterion for income what people need to live a decent life, and since most people's basic needs are similar there would not be an extreme difference in income but everyone would have enough or food, housing, medical care, education, entertainment, vacations.... Of course there is the traditional objection that if we don't reward people with huge incomes society will fall apart, that progress depends on those people. A dubious argument. Where is the proof that people need huge incomes to give them the incentive to do important things? In fact, we have much evidence that the profit incentive leads to enormously destructive things -- Whatever makes profit will be produced, and so nuclear weapons, being more profitable than day care centers, will be produced.

And people do wonderful things (teachers, doctors, nurses, artists, scientists,inventors) without huge profit incentives. Because there are rewards other than monetary rewards which move people to produce good things -- the reward of knowing you are contributing to society, the reward of gaining the respect of people around you. If there are incentives necessary to doing certain kinds of work, those incentives should go to people doing the most undesirable, most unpleasant work, to make sure that work gets done. I worked hard as a college professor, but it was pleasurable work compared to the man who came around to clean my office. By what criterion (except that created artificially by our culture) do i need more incentive than he does?

End quote.


Please travel more instead of just reading. What you argue totally depends on the country.

Some of the 'poor' people here in Colombia work 3 hours a day, earn just the same money as someone who recently got a bachelor degree, and stay the rest of the day drinking beer and saving no money for tomorrow.

They also tend to have very big plasmas or LCD TVs and huge sound systems, while their houses are just bricks without any paint on them.

So, I live in a very rich country (you just can't imagine the delicious and cheap fruits here) but full of poor people.


Please go read Howard Zinn. You are 100% wrong. Poor people work more hours,

The BLS disagrees. Can you tell me a reason I should trust Howard Zinn over the government agency tasked with measuring such things?

As for working harder jobs, I am agnostic. If you have evidence, cite it. I agree the poor die younger. I won't address the remainder of your post, it's mostly unsupported value judgments and opinion.


I expect in the future a lot of people will be employed in computer games. It would not be so different from working for Disney World.

Not sure how many support people Blizzard has, but it is a shame that doing real business is usually outlawed in most MMORPGs.


I've spoken to a few Chinese about this, where manual workers get more than uni grads (though not as much as successful business owners). Chinese really value education (in the high culture sense), and education (in the sense of meaningless test scores), money, and status. Until a few years ago, degrees were a ticket to riches. Now, they just mean you are overqualified for higher-paying jobs. Their feelings about it tend to be extremely complicated.


I think that you see this in places like Spain as well--you have a large educated, unemployed fraction of the population...


> But the failure to launch has serious consequences for society—as Egypt's Mubarak and Tunisia's overthrown President, Zine al-Abidine Ben Ali, discovered.

Mmm, what? Don't make it sound like overturning dictators is a bad thing, dude.

Maybe it's much better for "society" to have unemployed young people with not only the courage to fight for freedom but also nothing better to do with their time, than to have people with jobs who tolerate authoritarianism.


The trouble is that they might get confused between overthrowing our stalwart allies in the war against terrorism like Mubarek and start thinking that there is no real difference between a dictator for life and a government that relects the same group of millionaire business leaders every year or one where the same bunch of toffs from the same few fancy schools get to be in charge.


Suppose you have a 'democratic' country where the same party has been in power since independance.

The party leaders have got rich by telling everyone else the country is booming - when it was all a property scam. Now they have 30% youth unemployment and are cutting school and college funding to pay for it.

They were quiet happy to support terrorists in another country for their own political gains - they might want to start worrying about where the next car bomb will be placed.

And this is isn't in the middle east ......


Ireland?


I grew up with an ex-drill sergeant for a father. My dad was a skilled carpenter, a certified electrician and welder (TIG, MIG and Stick), and has fixed every single car I've owned and totalled.

Passed down to myself and my brothers, we're both skilled in welding, my brother now has his own electrician shop. I work in IT. If suddenly my IT job goes away, I have a trade to fall on.

Skilled trades and physical labor it seems to be lost arts on my generation (I'm 25) and that depresses me.


Move out of the city. In the more rural areas that isn't as true. It's definitely trending in that direction, but there are still a lot of kids who grow up with parents in skilled trades who pick up a lot of those skills growing up. Combine that with high schools that have legitimate trades programs, and there's at least a much better opportunity.


In Mexico they are called nini's (_ni_ estudian, _ni_ trabajan). They often find "better" opportunities joining organized crime/drug cartels. This, in my opinion, is one the main challenges that need to be resolve in order to end violence in Mexico.


I think one thing that we have in the US is that unemployment centers were set up in a different age and are designed to serve unskilled labor--but there are not so many unskilled jobs. Some of the training programs that are paid for are short "certificate" programs of dubious worth.

But, here's a question: currently sites like ODesk provide contract labor. Some of the jobs are for people to do research (for example, I wanted a listing of high schools/contact information for a side project I'm working on). I've only done a couple of postings, but I got very few American applicants. Is it just not well publicized? The rates are low, so it's not a good long term solution, but in some cases for "simple" research jobs, the rates could be $10/hr, which compared to some service jobs is competitive (since many service jobs here also don't provide health care)--especially in some lower cost of living states.


They mention the product lifecycle being short as a primary reason for not wanting to bring on new employees. If it takes someone 12 months to get up to speed in an 18 month product lifecycle, it is too costly.

I've got to wonder what kind of industry takes 12 months to get up to speed unless you've got workers coming in with absolutely no training and education. For most programmers I know, the worst case ramp up time is around 3 months. That is often with a project that will never be profitable, much less make it for 18 months.

There are other fiscally attractive reasons to hire young so I'd think if training was the only problem, we could solve that problem. The problem I see with regards to education in most companies is that there is simply no one on staff who can do the training effectively or is given the time to do so. Perhaps this will open the door for the return of a mini trade school in the form of an app.


Hardware engineering can easily be 12 months out of 18. There are a sundry of reasons:

a) Moore's law. The technology your school is using for hardware design is easily 5-6 or 10 years out of date. This makes it easier to teach and cheaper to work on, but the "real world issues" like heat, leakage current, etc just aren't addressed at the same level.

b) Intel has its own RTL that is not taught in schools. Some technology companies also have proprietary in-house technologies (like Cachet, or Wasabi).

c) Ripple effects. Analog components might change/fluctuate and this impacts the entire design. Or a new antenna placement might merit new design, etc.

d) Scale. An undergrad in hardware engineering typically builds a 5 stage pipeline processor that supports 2-4 hardware interrupts and a memory controller. This is enough to run linux on an FPGA. You've engineered a computer! But a Core 2 Duo has 23 pipeline stages. Vector units. Out of Order execution. 96% accurate branch predictor. Each one of those things I've mentioned could be the focus of a masters or PhD thesis. Getting hired, you'd be expected to pick up the logic of all of them in about six months.

e) Minimization. More systems are being done by less chips. This is what is called System-On-A-Chip design by some. Previously, you'd need to know how to design a CPU. Now you need to know how to integrate a CCD into the CPU.

This is off the top of my head but i'm sure you get the point.


One key bit: "more education is not always better. What matters is matching the skills of the workforce to the skills that employers demand. In Iran, where the percentage of people aged 15 and over with postsecondary degrees has soared from 2.5 percent to 10.5 percent over the past 20 years, the education system has become 'a giant diploma mill,' says Djavad Salehi-Isfahani, an economist at Virginia Tech."

The same is true here, as many of our chronically "overqualified" unemployed could attest. What's worse, some of what counts as "training" here is a set of dubious commercial vocational schools --- cosmetology schools, and the like --- which soak up student loans, and leave the trainees with large debts that are hard to dismiss, even in bankruptcy.

(And these are pretty big business. One of them, Kaplan, is a wholly owned subsidiary of the Washington Post corporation that has over $2 billion in revenue, accounts for just about all of the parent corporation's profits. Not without controversy by the way; reports of abusive practices from Kaplan have led to allegations of fraud: http://www.nytimes.com/2010/11/10/education/10kaplan.html The Washington Post, of course, has editorialized in favor of its baby.)


This would seem to be especially true of "for profit" colleges. There was a pretty depressing tv special (frontline?) on it...They sell hopes and dreams.


It's time for youth to blaze new path to employment.

19 years old like me are trying to build a living on the internet by writing, programming, and selling ads. It's a lot of hard work to find clients and more scary when you're trying to deliver the work.


Buy an Arduino and start building robots. IMHO, there's a long, rewarding career there.


I don't have such capital but I have around 600ish dollars worth of saving(In an another currency!) that's earned through hard work.

Hopefully, the network of clients I am building will grows to such portion that I am able to find constant work as well charge more.


The fact is than even the educated kids are unemployable. We constantly try to hire graduate developers here in London but the fact is that most of those kids are simply unemployable. They have impressive degrees from the best universities, but I simply can't hire someone who can't code a simple Fibonacci algorithm at the whiteboard in the interview room. In the language of their choice. I'd even accept an only marginally working solution with a few bugs. Still, most of them just can't do it. They don't even know how to start.

Universities simply don't prepare kids for the needs of the industry. After 3-5 years of higher education, many of the graduates can't solve even the most basic programming problems. I suspect that this must be the case in other professions as well. Something has to be done about the completely defective higher education systems.


I was fortunate in community college because the instructor for my major (Linux admin) liked to spend large parts of class time telling stories from working in the IT industry.

Many interesting stories from dealing with MS audits in a mixed source environment.

The most interesting classes were those where he had us solve a real world problem (like researching and preparing an executive summary for a purchase).

Or the time he mangled all the computers while we were on break and had us troubleshoot them.


    fib a b 1 = 1
    fib a b 0 = 0
    fib a b n = (fib a b (n - 1)) + (fib a b (n -2))
Where do I send my CV (I always loved London).


Universities simply don't prepare kids for the needs of the industry.

I've been working in industry for over 10 years and the only time I've ever had to write a fibonacci sequence generator was during a code challenge (that lead to an interview).


Luckily the soil is fertile: All over the world, the hittistes and shabab atileen, NEETs and freeters and boomerang kids are hungry for a chance to thrive.

Hmm, but how hungry? Compared to say people who came of age in the 40s or 50s? I'm not sure hungry is the right word. Restless maybe. Peckish.


The Americans at least that I know who came of age in the 50s as anything close to middle-class weren't very hungry at all. They lived in a world of corporate jobs for life, defined-benefit pensions, comprehensive employer-provided health-care with no deductibles/copays/exclusions, low unemployment, etc. Even blue-collar workers had quite strong unions, high pay, and great pensions/healthcare in the 50s.

Granted, if you meant coming of age in 1947 in Poland, that'd be another matter.


Unfortunately, the jobs paid for a much lower standard of living than today, the health insurance would pay a doctor to tell you "you have terminal cancer", and all of this was only available to white males.

(Meanwhile, a terrorist group with millions of members was setting off about 20 bombs a year plus assorted lynchings and other acts of violence. The response by law enforcement was mainly gun control targeted at the victims of the terrorist group.)

The world of Mad Men is awesome if you get to be Don Draper. For everyone else, it sucked.


There is a famous film set in my home (small mining) town about dissafected youth in the 60s. At one point the teacher says that if the kid doesn't start working hard he will end up just working down the mine. In the 80s the mines closed, unemployment is 30% and a good job now is illegal minicabbing.


I can believe that there were more/better careers on offer. But what about the consequences of not working, how do they compare to today?


Do you have anything substantial behind this or is it just general "worst generation ever" talk?


Well, even my mother, who came of age in the 70s, shared a small home with 8 other siblings and two very over-stressed parents (who would have had things even harder). She was literally desperate to leave and start living much more comfortably (ie. independently). Nowadays kids come from much smaller families, and have numerous cheap distractions/entertainments like the internet, cellphones, tv, games. Living independently would probably mean facing up to a lot of problems, just for a little more freedom. How could they possibly be just as hungry/desperate? Plus many people conduct their entire jobsearch from their laptop, and get benefits paid directly into their bank.


If people were really comfortable spending the early stage of their adult life with Xbox and mom's cooking, they could have skipped going $100,000 in debt for six years of post-high school education that your mother's generation couldn't be bothered with.


That perhaps makes sense where you live, but in my country going to university is free and is simply the done thing. Having vague long term goals for your life is one thing, having practical concerns forcing you into action vs. letting you laze around and enjoy pastimes, is another.


Jason Calacanis? Is that you???

Part of the problem is cheaper young workers are laid off to keep fatcat management of an older generation. The workers remaining at the company then get "more productive." Fire the old and bring in 2 young workers(or more) for each of their salaries and things get much better.


average age at mahalo is 27... nuff said


The government should create jobs to solve this problem. Unemployment is cruel and inefficient. Prioritizing reducing the national debt over employment is short sighted.


Things which cannot continue, won't.


Anther problem is the education that people choose. The world is full of "VCR repairmen", while everyone is using disposable bluray players.

I see it again and again, students pick silly, simple or just useless degrees, such as

    * philosophy
    * international relations (every single one of those wants to work for the UN, maybe 0.001% ends up there).
    * arts, all kinds
    * history (how many historians do we really need)
Don't get me wrong, they are interesting and entertaining, but just not very helpful when it comes to being employable.


Not to troll, but Thomas Jefferson, Ben Franklin, Leonardo DaVinci etc. were all technical people with understanding of philosophy, art, history, mathematics. Obviously these are cherry-picked examples, but having only technical knowledge isn't a great solution either.


I never said anything about technical only knowledge. I myself took a few art classes, and enjoyed them.

What I said is that people pick these majors, and then we see these crazy unemployment stats. Most of these unemployed people are not qualified to do anything that society is willing to pay money for.


OK. Just making sure. Sometimes "the arts" get too much of a bad wrap here.


History, philosophy and international relations undergrad degrees are all great ways to prepare to go into law or business school professional programs.

There are people that go into them for "silly" reasons, and there are people that go into them that come from upper-class backgrounds where being bankrolled by your parents while doing an international relations degree at a private university and spending time at unpaid internships in cities with high cost of living is a status symbol and a way to weed out the lower class from certain career tracks.


I' also add that these may seem "silly" on the cover but can be put to good use later on. I've known several successful managers (including our current Director) who have their undergrad degree in philosophy, albeit coupled with an MBA.

Generally, I think the more well rounded a person is they can usually lead a more successful (fulfilling) life.


I'm sure many people who are unemployed are unemployed through no fault of their own. But...

... the other day I checked out a site for finding tech/design-oriented interns. There were 50 listed in my city (Philadelphia)... and most of the eye-catching descriptions the interns had written for themselves were things like:

* "Coming soon"

* "19 years old"

* "I'm a recent graduate of the University of Miami"

* "My name is Brittany"

* "My name is [redacted] and I am a 19-year-old Korean-American student."

This was the only part of the profile that was really custom to them, other than checking off a list of skills & available times/dates.

Don't even get me started on the usernames they chose to present to potential employers. (Musicbabi_87?!)

Their chances are pretty much zero. Obviously nobody taught these kids (and, in a few cases, adults) anything at all about professionalism or the fact that when they take a job, their job is to serve the employer. And they obviously haven't been reading books on their own that would teach them that.

Only a precious few mentioned anything that would tell me what I'd get out of the deal, how they could help me/be useful to me. Almost none even expressed any interests or goals of their own.

So, obviously, I'm not hiring any of them -- when I would have liked to. They got in their own way. This is, sadly, their fault.




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