America Isn’t Working

The U.S. has the most creative imagination and flexibility, but unemployment is wasting our potential.


The consequences of the weak employment market are manifold. One is that hundreds of thousands of workers who have exhausted their unemployment benefits are no longer counted in the labor pool. They have vanished into that other army, the nearly 9 million who have become disability claimants. In any month now it is a tossup whether more Americans are qualifying as disabled than are finding jobs. The numbers are inexplicable given the general pattern of longer-living, healthier Americans.

Another consequence of the lamentable jobs market is that young people have been stopped in their career track, sinking not soaring. An estimated 41 percent of those unemployed are aged 30 or under. The reason is in plain sight: Understandably, older workers have become much less inclined to retire. We have a postwar high in the number of Americans over 65 who have chosen to stay employed or are still looking for work. This has shrunk the actual employment opportunities for those in their most productive years, between 25 and 54. There are 94 million people in that category—the same as 15 years ago, in April 1997, when America had 46 million fewer people than it does today.

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The young are clobbered also by the fact that they have a diminished opportunity to get ahead when the better paying jobs held by experienced older people are not becoming vacant. On top of that, with so many applicants chasing so few openings, wages have sagged. Real compensation per hour has declined at about 1.4 percent annually. Part-time penury is all too evident. According to government figures, full-time workers in service jobs average considerably more in total compensation than part-time workers—$17.18 an hour versus $10.92, including benefits. In a weak economy, it's inevitable that employers will go for part-time workers. Talk about a lost generation, with the misfortune to start their working lives at the worst possible time since the end of World War II.

But here's the paradox. Twenty-four million can't find work, and hundreds of thousands of employers can't find workers. The vacancy signs persist month after month because the openings are for workers with skills job-seekers don't have. Too many Americans in the army of the unemployed lack the necessary science, technology, engineering, and math (STEM) skills companies seek. This year, according to the Bureau of Labor Statistics, we will add approximately 120,000 jobs requiring at least a four-year degree in computer science. Alas, we will only produce 40,000 graduates with such degrees. And this doesn't take into account the fact that each engineering job typically leads to five additional jobs, experts say. It is astonishing that only a small fraction of the nation's high schools offer an Advanced Placement course in computer science, when 40 percent of small businesses say they have job openings they can't fill because applicants are unqualified—a percentage that has doubled in the last three years alone. This shortfall in education is the economic equivalent of a permanent national recession.

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The United States ranks only 14th in the world in terms of education achievement in reading, 17th in science, and 25th in math. Many of the countries ahead of us have a lower unemployment rate than we do. Our workers with a college degree have an unemployment rate half the overall unemployment rate, but their numbers have stalled out at around 33 percent after decades of increases.

Those with less education and fewer job-related skills experience especially high rates of job loss and higher extended unemployment rates. The unemployment rate for workers over the age of 25 who do not have a high school diploma is about 12 percent, compared with roughly 4 percent for the same age group with a college degree or higher. It is no mystery, for good jobs today require at least some post-secondary education or specialized training. Workers without the requisite skills are driven into lower-wage jobs or out of the labor force altogether. The digital revolution has contributed to this. We are simply quite unprepared for a technology-driven economy that is ever more productive and may well need less and less human labor.