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Depression family from Library of Congress archival photoThe employment picture is a fright, no matter how nicely the people at Bureau of Labor Statistics spin it. In the last year, my adopted home state of Florida lost nearly one million jobs, and we won’t get them back for years, even if the recession fades.

The question I have been pondering is what happens if the economy cannot produce the jobs to get us back to where we were in 2007.

No, this isn't the Great Depression (an image from the Library of Congress is at right), but it's miserable for many.

Here are some options, as well as some brands and companies that could benefit.

  1. De Facto Job Rationing: After World War II, when the men came home, the women went home too. Rosie the Riveter fired? Well, the problem was obvious. There were not enough jobs to go around, and society had to survive. When you talk about it with family members who went through it, you get a different story than documentaries. While not all wanted to quit, they gave the jobs back to the men as long as the other women did it too and all the men had jobs. It was called realism, and while it is not pretty, and not fair, there was a rational reason. Today, this sort of discrimination would be illegal, but it could return, de facto. For instance, when a sole-breadwinner loses a job, networks of friends pay more attention to finding a job for one spouse, then efforts move to another family. Or if there are layoffs, and a choice is between a single mother or second-income mom, guess who gets the boot first.
  2. Sharing Pay With Underlings: When employees at CBS (NYSE:CBS) were grousing about Katie Couric’s pay package earlier this year, they brought back the old commie idea of sharing pay with staff. Here was the situation: You had Couric making millions and CBS laying off staff. The ratings for CBS Evening News were lousy. So employees did some simple math: If Couric made $1 million less a year, they would be able to hire 10 full-time underlings, or 20 part-time. She had a contract, but what fun is a contract when your staff hates you. Beneficiaries? Companies with star payrolls that can be cut back. And lucky for the U.S., we have a “pay czar” who looks after this for us!
  3. Door-to-Door: Recent articles about the revival of life insurance and home selling businesses have illustrated this trend of commissioned employment. Avon (NYSE:AVP) calling? Tupperware (NYSE:TUP)? Term or whole? Some of these types of businesses sell overpriced goods through guilt and social pressure, but of the ones that create true consumer value without MLM creepiness can continue to do well.
  4. Government Make-Work: The stimulus was all about projects like re-paving and funding intricate schemes created by bureaucrats. What was fascinating about Roosevelt-era programs was that they did all sorts of interesting things, on the fly, with the money. Build a park! Clean up the swamp! Neoclassical airport! Go for it. Today, how much longer can we afford to keep extending unemployment benefits? These rewards some at the expense of others. If as a society we need make work, we need to call it that, but do something useful other than repaving old roads.
  5. Civil Disobedience: The array of rules stacked against home-based businesses varies from jurisdiction to jurisdiction, but the common denominator is that governments favor regulated businesses over small businesses. When I lived in downtown Richmond, where the economy had collapsed in the 1970s and 1980s, there were rules flouted every day that even the busiest Richmond bureaucrats would not dare enforce for fear of making the bureaucracy's life miserable. Auto shops in alleys. Nip joints. Boardinghouses. Admittedly, bureaucrats like to enforce laws, but at a certain point at the growth of bureaucracy, underground economies come in so that people can survive.
  6. Back to the Farm: A few weeks ago, Clear Channel’s (CCMO) WFLA 870 was running commercials for Saturday seminars at Home Depot (NYSE:HD) to learn how to grow vegetables. While relearning agriculture after generations takes longer than a single season, it can be done with only a little effort and attention. In addition, there is a mania for home-grown and truck farming that has not been seen since World War II. Even Walmart (NYSE:WMT) is trying to subsidize local truck farmers by selling their goods, and every one of the Seven Sisters magazines is promoting grown at home.
  7. Hunting, Gathering: In most states, hunting and fishing are approached as leisure hobbies, and taxed and regulated as if we are all wealthy sport fishermen and part of Edwardian shooting parties. Instead, state governments would do well realize that many folks actually eat their plunder, and try to come up with balanced policies that protect resources while encouraging responsible subsistence hunting and fishing. Here in Florida, the BP (NYSE:BP) mess could a toll on the small fishing boat operators, but there is plenty of fresh water. If you think I am overly gloomy with this, go ask someone sitting on a bridge if they are going to eat what they catch. This (and more tea rallies) could benefit Strurm Ruger (NYSE:RGR) and maybe struggling Smith & Wesson (NASDAQ:SWHC).
  8. Hobby Income: Back in the Depression, women would pull apart knitted yarn to re-use it. That won’t happen now; we have cheap Chinese wool from Walmart. It does make me realize, though, that when people have free time, they like to create things with it. Certainly, the average housewife won’t be able to sew her way into a new home-based job, but a hobby that pays for itself with a small amount of income from Etsy or local women exchanges and farmer markets? That’s useful, and benefits companies like eBay (NASDAQ:EBAY), Jo-Ann (NYSE:JAS), Walmart and Michael's Stores. Some of these turn into real businesses. Municipalities would do well to ask some of these serious hobbyists what it would take, policy wise, to encourage more of this entrepreneurship.
  9. Magnetic Sticker Businesses: In my home state of Florida, because it is a tourist economy, many are content to come here and make less, and enjoy life more. That means there are hundreds of little one-man businesses doing unregulated, cash-intensive professions like yards, painting and the like. They all have magnetic stickers on their cars, telling what it is they do. Framing. Exercise. Cleaning. Painting. Most are not technically “employed” but have a spouse who is. There are two policy directions with these companies. Government can either target them and chase after them, or they can create real incentives so that these businesses can begin to report their income and move into the real economy and add employees. A year ago, I argued for the return of more dealer repair shops; I still think that's a good idea. Why is there only one licensed Briggs & Stratton (NYSE:BGG) repair shop near to me?
  10. Domestic Service: I am going to get into trouble on this one. But if you have able-bodied people and no cash, those people will have to take up residence somewhere. During the Depression, middle class Americans became even more used to cheap help than they already were. Where I grew up in Virginia, most middle class houses built before 1940 had maid’s rooms. These pre Social Security “rooms” were often Spartan quarters in the basement where the maid, cook and yard man could stay. While this era will never return, officials at the IRS would do well to come up with easier ways to encourage Americans to hire part-time staff legally, to help rebuild Social Security coffers and ensure that the least protected are protected by wage laws. Even if wages are low, citizens on the edge should have some income, and all the protections of a legal payroll.
  11. Prodigal Back Home: We all know the story of the Prodigal Son, who returned home to his father after his profligate ways. Well, it’s happening now, as families double up to save on expenses. With aging parents, less money and an empty house, this option becomes yet another way to absorb the impact of fewer jobs. For instance, Baby Boomers who do not have the money to retire are moving move home to take care of aging parents, or moving in with their children to help with child care, something that mostly happened in the inner city. A cash-poor Boomer can choose between working into retirement, or taking Social Security and staying home and fiddling with the new Harley (NYSE:HOG). Good news is that the housing market explodes when and if the economy recovers, and Carnival Cruise Lines, Starbucks (NASDAQ:SBUX), Barnes & Noble (NYSE:BKS) and even neighborhood bars benefit when "Prodigal" needs to escape for a few hours, or a week.

Disclosure: No positions

Source: What Happens When the Jobs Don't Return