“The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.”
These are the startling opening words of a recent article in the March edition of The Atlantic magazine. Don Peck authored the piece, entitled “How a New Jobless Era Will Transform America.” In it, he discusses how high rates of unemployment may linger for several years and may have a long-term impact on the fabric of our society. It also cited specific research on impacted segments of our society, specifically young adults seeking to enter the workforce, blue-collar men dislocated from their jobs, minorities, families and communities.
Peck opens his article with an analysis of current projections on the high rates of unemployment and the likelihood of the economy creating enough jobs to replace the 10 million that were lost during the course of the recession. When factoring in the additional 1.25 million jobs per year needed to accommodate new entrants into the workforce, it will take several years of sustained job growth to return to “normal” rates of unemployment. Even then, the new “normal” unemployment rates may be seven to eight percent instead of the former five percent for the next few years.
Under these circumstances, young people transitioning from school into the workforce may experience some harsh economic realities. Historic trends indicate that young people who try to enter the workforce during an economic slump make about 25 percent less in their first year than their counterparts in economic boom times. This earnings gap may also persist long into their working careers. Even after 17 years, these young people were still earning 10 percent less than their counterparts who entered in better economic times. Other research indicates that most of these graduates essentially never catch up over the course of their careers.
Of the eight million workers who lost jobs since the beginning of 2008, roughly three quarters have been men. This reflects some of the hardest-hit industries that have traditionally been male-dominated, including manufacturing, finance and construction. One exception to this trend has been the recent layoffs in the education sector (about 300,000 nationwide), which employs larger portions of women. However, long-term occupational projections indicate growth in female-dominated industries like healthcare and other service occupations.
Many of the men impacted have been laid off from blue-collar jobs in manufacturing and construction. Evidence indicates that long-term male unemployment results in tarnished identity and loss of self-worth, and may leave long-term psychological scars. It also has a corrosive effect on the stability of marriages and family life.
As we enter a new economic era, we may face some unforeseen challenges. In future articles, we will continue to explore this phenomenon and its impact on other segments of our society. iBi