Job Creation Is Complex And Quality Matters

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Includes: DIA, IWM, QQQ, SPY
by: Bruce Wilds

A lot more focus should be placed on the quality of the jobs being created. The implications of poor quality jobs is massive. Looking forward we must recognize that coupling low paying part-time jobs with the fact that a huge number of people have simply dropped from the work force will have a long-term negative affect on society. When people have little in the way of savings, this means the burden of caring for them will be transferred to society. As more and more people begin to slowly shift into this category we will slowly wear down through attrition. Finding a fair way to share and balance the work load that goes on every day as well as the fruits of our labor may be one of the most important problems facing our modern world.

Not discovering a solution to this dilemma bodes poorly for our consumer driven economy and adds to the toxic problem of inequality. Over time this shows up in both productivity and wages. Over the years as government grew it tended to offer good salaries and benefits that pulled pay throughout society upward however, that trend has only been able to carry us so far. That brings us to the heart of the matter: much of the recent decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population. If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today be much higher.

While people often talk about the need of additional training and more education the problem goes far deeper. Issues such as will a job exist after training is complete and does a demand exist for their skills is of major importance. In the past family businesses did much of the basic training and prepped many people with the basic skills that they needed later in life. Over the last few decades as big business and government regulations crushed smaller community based enterprises this training has ceased to exist. This means that many of the lessons and values that were passed on including responsibility and dependability are not nearly as common. It is possible that a large number of the jobs employers claim they currently are unable to fill is because the existing work force lacks the skills needed to preform the openings falls into this grey area of personal drive and values.

A well motivated worker with a variety of skills can often be trained and adapt rapidly to a new job and environment. Sadly, when you hear a person talking about getting a job it is often a vague and distant thought, like a wish instead of a goal, something that may do in a few months, after they finish doing this or that. To many people the problem is not getting a job, but keeping one, and the truth is it cost employers a great deal to keep workers of poor quality and who show little initiative. It is a fact the longer someone is out of the workforce the harder the adjustment to reentering becomes, they call it work for a reason, and one of those reasons is that often it means doing unpleasant things.

Another quiet and often somewhat unnoticed cultural effect of long-term underemployment is a marked increase in corruption and other low level crime. Unemployment is corrosive to society, it can in effect create an army of downtrodden hopeless victims. Prostitution, gambling, and human trafficking as well as other forms of black market activity tend to fill the days of those needing money. Illegal businesses and a shadow economy that sidesteps regulation and laws can take root as a way for people to "get by" as they wait for things to get better. This creates a decline in the moral fabric of society and acts as a cancer on the values we often hold dear. After leaving school if someone does not find employment they never really learn to work, getting up in the morning, having to do unpleasant tasks they would rather avoid, taking orders, these are all part of whet society calls work and often it is not fun.

Many of the numbers and budget projections of the government have been based on healthy employment numbers or a job market with better quality jobs than are currently being produced. If the current trend continues the long-term implication of producing jobs that lack in "quality" will drastically impact in a negative way both the wealth and future of our children and America. As we saw in the past a weak employment situation can be passed down in families from generation to generation. This means some people seldom or never work and can go decades without a job. The alternative to working and producing is to use up your savings or be sustained by the government, family, or friends.