Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

End of the Line for Millions

From Calculated Risk comes the following cheerful graphic:


An article The Atlantic Monthly by Don Peck plays right into this theme.  Peck writes about the societal and economic impact that long term unemployment will have on America society, especially among young people.

David Brooks extended and summarized Peck's thesis in a column in the New York Times.  Brooks wrote:

For decades, the working-class social fabric has been fraying. Now the working class is in danger of descending into underclass-style dysfunction. For decades, young people have been living in a loose, under-institutionalized world. Now they are moving back home in droves.

The strengths of American society centered on communities and families is both (1) a support system to pull us through extended periods of economic difficulty and (2) stress points that can be damaged by the same difficulties.

Peck and Brooks each offer sharply defined pictures of how the end of the line we see in the data can produce lasting changes in our society.

The brunt of the end of the line is falling disproportionately on the lowest income groups.  A reseach paper from Northeastern University by Andrew Sum, Ishwar Khatiwada with the assistance of Sheila Palma has the following graphic: 

 


Things are even worse when the underemployed and discouraged workers not counted in the labor force are included.  Calculated Risk has constructed the following graphic from the Northeastern University data.

Click on graph for larger image
 
These are truly depression levels for the lowest 40% in household income.  The middle 20% are in severe recession and the top 40% is only mildly affected.  The top 20% are essentially fully employed.  The analysis of depression and recession in employment will be the subject of a detailed analysis in an article by yours truly later this week. 

Disclosure: No stocks mentioned.