U.S. President Barack Obama greets graduates following the commencement ceremonies at Notre Dame University in South Bend, Indiana.
This past weekend was the peak of college-graduation season. Colleges invite well-known people to travel all over the U.S. to give a 15-min. commencement address in exchange for an honorary doctorate. It is intellectually dishonest, but as it is graduation day, the hypocrisy is ignored.
A much smaller number of college graduates this year will find jobs. That fact has been overexamined in the press along with the fact that the long recession means those graduates who do find jobs will get them at relatively low wages. Furthermore, those wages will stay low for the next several years while the economy recovers. (See pictures of the global financial crisis.)
What has not received much press is the fate of the younger high school graduates, especially those students who will not go on to college. Unemployment among college graduates is still below 5%. Unemployment among people with only a high school diploma and no additional training is over 10%. People who did not graduate from high school at all have over a 15% chance of being among the jobless.
Another group that expected to graduate this year is the people who assumed that 2009 would be the first year of their retirement. Many of them have seen their savings savaged by the falling stock market. Others had hoped the value of their homes could be converted into cash. The value of those homes is down 30%. People who thought they would be able to stop working this year may need to work for another 5 to 10 years. Very few employers, with the exception of retail outlets like Wal-Mart (WMT) and McDonald's (MCD), want to hire older workers, even if they are well-educated, in spite of the federal laws against discrimination. Not surprisingly, older workers tend to have more health problems and are often unhappy working for the same wage that a high school graduate receives. (Read "Inspired by McDonald's, Wal-Mart Creates Its Own Dollar Menu.")
There is an increasing recognition that both younger and older people need jobs, and they are often competing in the same job market, as the population of unemployed people grows.
One of the interesting things about the Obama Administration's stimulus programs is that they are focused on sectors and industries and not focused as clearly on the people who are unemployed. Building broadband and energy networks and repairing schools have clear benefits. But if there is no economic argument for getting high-speed Internet access to people in rural areas, the future of such a project may not be bright once the government stops underwriting it. The same is true for the energy grid. Building a system that would move wind-generated power from the center of the country to the coasts is viable for an extended period only if wind power is a more cost-efficient alternative to fossil fuels. It is not clear that wind has that advantage now. (See pictures of fossil fuels.)
If the focus of the Administration's programs were to be directed toward people who are from demographic segments that are facing chronic unemployment, permanent and beneficial change in the work landscape could be created. One of the ways to approach this is remarkably simple. High school dropouts and undertrained high school graduates need skills. Older workers sometimes need the opportunity to acquire new skills as well. The stimulus package has not provided money that could be used to educate those who might have better job prospects with some modest training.
Congress and the Administration have succumbed to the concept that getting people back to work relies on investing in "themes" and not people. Rebuilding the infrastructure is a favorite theme of politicians. Roads and schools always need repairing. Fixing them is for the public good.
These political interests avoid the nearly intractable problem of giving tools to those who are inadequately trained to do skilled labor. Even if people are lucky enough to find a job at the minimum wage, they will still live near the poverty level. Politicians must understand that this condition will never be in the public's best interest.
Many of the people graduating from college this year won't find work. Instead, many of them will have access to government loans. They will move on to two or three years of graduate school, years in which they may not have to work at all and can wait out the recession. They will be part of another graduating class in 2011 or 2012. Not everyone will be so lucky.
— Douglas A. McIntyre
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