Rockabye baby...

I had a very nice drive up through the Appalachian mountains last night. As I climbed the highest part of I-26, a bank of fog appeared and reduced my visibility to nearly nothing. After a few minutes of impenetrable whiteness, I realized that this was not fog but a cloud that I was driving through. Somewhere along the line I became aware of my descent and shifted to a lower gear, preventing myself from gaining too much speed in the low visibility of my cloud. Suddenly, I broke through the bottom of the cloud and ahead of me was a moon-lit valley hundreds of feet below. My low speed granted plenty of time to react and follow the road on its sharp right turn. Had I been traveling faster, you'd be finding pieces of my car in that valley for decades.

My continuing trip was uneventful and I had the time to think about my small brush with danger. There wasn't much to prevent me from driving right off that cliff. There wasn't anyone to catch me cradle-and-all.

For some reason, this immediately brought the economy and our nation's future to mind. There's no one to catch us anymore and we're only just beginning to figure that out. Across our society the social safety-nets of the previous generation are unwinding. Social security, medicare, welfare, food stamps, unemployment protection, healthcare, defined pensions, quality education, and career stability are all threatened.

We know Social Security will stop taking in as much as it gives out sometime in 2016 and that that shortfall will deplete its balances sometime between 2030 and 2040. We will have to consider options like means testing and raising the retirement age or face insolvency. I believe that action will eventually be taken to save Social Security but it will reduce the benefit provided by an already meager support. In the long run, neither you nor I can count on Social Security alone as a support in our old age.

The same goes with Medicare and whatever our Healthcare package ends up being. Those systems' costs will grow over time - especially because our national healthcare legislation does little to address the underlying factors causing increased healthcare costs. Benefits will decrease and costs will rise in order to meet the need of providing adequate healthcare. Since it has$24 trillion in unfunded liabilities through 2084, I'm guessing we'll have to cut quite a bit from out coverage.

The Supplemental Nutrition Assistance Program now has a record number of families drawing support.

August's jobs added was unchanged but somehow the number of people drawing on unemployment support decreased. That's because tens of thousands of people reached the legal limit of that unemployment insurance, 99 weeks.

There's no stopping us now!

So far, I've only listed government programs. But throughout the workforce we're also seeing a move away from systems of lifelong support. Barely any companies offer a defined pension anymore, they're too expensive. Instead, 401k plans tied to stock indexes and money market funds have wiped out billions of dollars of American wrokers' savings. Baby Boomers are supposed to be retiring in record numbers over the next decade but many can't afford to.

Additionally, the old model of career-based employment has vanished. A person used to get a job with a firm and work there for life. Their path would take them up to a management position and they could depend on a stable income through most of their lives. Such stability breeds good economic decision making. Big purchases (house, car) and important long term savings (retirement, college for kids) and valuable self sustained safety-nets (emergency savings for medical or other emergencies) and long term goods like insurance all vanish when a person can't tell you how much money she's going to make this year or next.

How do you plan for the future when you may have a brand new career, with a brand new salary, and completely different benefits every 2-5 years? How can you remain valuable in a workforce when staying employed constantly demands new training and improving skills?

Bill's a copy editor but he doesn't know Ruby. Let's get him!

The economist recently ran a special report on jobs. Their take is mostly positive but let me quote a section from one of the articles:

Even in tough times there are jobs to be had, but applicants have to work far harder to get an employer’s attention, says Mr Bolles. The main thing is to give them hope and teach them the latest techniques for looking for work, of which he lists no fewer than 18. They need to market themselves better and consider a broader range of employers than they might have thought of. 

The growing need for workers to keep upgrading and adapting their skills is one of the themes of a new book, “The Shift: The Future of Work is Already Here”, by Lynda Gratton of the London Business School. She argues that the pace of change will be so rapid that people may have to acquire a new expertise every few years if they want to be part of the lucrative market for scarce talent. She calls this process “serial mastery” and notes that the current educational system in most countries, from kindergarten through university, does a poor job of equipping people for continuous learning.

Does this sound like the kind of life you want? It appears to be a working world where you constantly have to spend your free time marketing yourself on LinkedIn or going to a local community college to earn a certificate in the newest corporate fad. The Economist take a very positive tone but I see what looks like employment hell. We're moving to a system where employers have broken employee rights and now they can make exorbitant demands of their workers. I see a system in which people are going to be living in constant fear of being fired if they don't prove how they bring extra value to the company. On one hand this is what business is all about but I can see where helping the company succeed no longer benefits the employees at all.

Nine dollars an hour and I get to eat lunch? I accept.

I can see a system where lives revolve entirely around work because people depend so much on the scraps their companies will throw them. Without the institutions our grandparents built, people will be dependent on whoever pays them. Forget pursuit of happiness, we'll be pursuing a meal ticket.