American employment picture is bleak

There is not a lot of good news for Americans looking for work.  Already hovering at 9.7% unemployment for several quarters with an under-employed figure many believe twice that rate raises much cause for concern.  Unfortunately, the ability for America to create and even save jobs has been severely compromised.  The excesses that have been experienced (dare I say “enjoyed”) at all levels within our society (households, local, state, federal) are just starting to take their toll on America’s payrolls.  Despite great resilience from past recessions, this one will be different!

Today, every child born in the U.S. is indebted to the tune of $43,000 and this is just at the federal level.  Other under-funded obligations of social security, public employee pensions, education, health care and non-job creating entitlement commitments places that figure much higher north of there.  Yes, this is owed on a child’s first birthday!  Heavy debt burdens only impede progress and growth. 

In addition to this heavy public debt burden, there are a number of other forces that will impact job creation in America moving forward.  Such as:

The Internet – This revolutionary, borderless super-highway that spawned thousands of new companies and created hundreds of thousands of new jobs is now The Great Equalizer.  It’s possible to perform a wide variety of technology, service and support work in countries far less expensive than America.  CEOs of American corporations can achieve greater profits by maximizing use of cheap labor around the world rather than just within our geographical borders.

Mergers & Acquisitions – The same CEO’s and private equity funds will look to drive profits by consolidating companies and eliminating workers based on economies of scale and greater efficiencies.  Much of the M&A activity could come from foreign investors strengthened by the weak U.S. dollar and looking to secure a greater presence in the U.S.   Foreign based companies will look to streamline U.S. operations and use their own national workforce to remotely manage as much as possible of the acquired companies.

Automation – Similar to what M&A activity and the internet are doing, companies will look to other high technology and process automation tools to replace workers and reduce labor costs.  We are already seeing this in play and it will only accelerate as more regulations, higher taxes and burdensome facility/employee costs spiral out of control. We have kiosks used extensively in the travel industry; self-checkout registers at stores, check deposit by phone, ATMs everywhere, etc.  There are very few industries that can’t be improved through automation and the elimination of jobs.

Fear – American workers have increased their productivity at commendable rates over the past twenty years predominantly because of the advent of the internet, mobile communications, super-fast computers and other high-technology productivity tools and software.  What hasn’t truly been exploited is the ability for the common worker to actually work harder, faster and longer during a normal work week.  This will come about through increased job insecurity and the fear of losing one’s primary source of income.  Fear will be a huge motivational factor that will fill the gaps left by downsized companies and keep future job creation at bay;  at least temporarily.

Government Layoffs – Layoffs and attrition are the only feasible economic solutions to battling the burdening debt and pension obligations of governmental entities.  Large numbers of local government employees have already been given pink-slips.  These numbers are expected to swell when state governments and the federal government begin to utilize such measures to control spending.  Not all ex-government workers will have sufficient pensions to retire thereby swelling the ranks of the unemployed workforce.

I’ve touched on a few key areas that will have a profound impact on American jobs into the future.  There are many others as well as we work our way through the excesses of the past having built an economy widely dependent on consumption and debt.  Unfortunately, America’s employment picture is looking bleak.