Comment on Long-Term U.S. Unemployment and the Baby Boomer Generation
February 19, 2014
The lengthy duration of U.S. unemployment has lately captured greater attention than the overall jobless rate, which has fallen to just above the Fed’s original labor market threshold guiding monetary policy. Within the segment of labor force members, who need a job but have been out of work for a half year or more, a further question centers around how to view ones who happen to be baby boomers as well. This generation is alternatively defined as people born between 1946 and either 1960 or 1964. Are baby boomers, who’ve been jobless for mare than a half-year, part of the long-term unemployment problem or merely retirees? It’s a gray area, and the truth for many is a little bit of both.
I didn’t plan on leaving the small independent investment advisory company for which I had worked 19 years. The firm was bought in 2004 by a large broker but permitted afterward to function intact and pretty autonomously as before, calling developments as analysts saw them with minimal interference from the parent company except along lines of staffing head count. In 2008, not long before Lehman Brothers failed and several months past the onset of the U.S. recession, I received a phone call informing me that the broker was eliminating the foreign exchange and international content of the business but retaining the U.S. domestic macroeconomic, Fed watching, and Treasury market elements. As quick as that and without any face-to-face exit interview, I was without paid work, over 60, and one more statistic in the financial market maelstrom of a disastrous labor market story. From networking contacts with my firm’s competitors, I quickly discovered that every shop was in a fight for survival. Nobody was contemplating additions to staff, nor would they before I was well into the category of long-term unemployed.
I created Currency Thoughts in response, an organic portfolio to showcase my analytical skills, understanding of markets, knowledge of institutional factors, and creativity in designing a web site layout filled with fresh and considerable content that is not only useful but also easily usable. Currency Thoughts prevented my marketable attributes from atrophying and became a highly visible portal to market myself as a potential employee. In 2008 and 2009, I received many solicitations but nothing along the lines that I was seeking. Rather than interest in buying exclusive rights to Currency Thoughts or hiring me as an employee, I was and continue to be bombarded by requests to rebroadcast Currency Thoughts free on another service, accept guest articles free on my own site, or place an ad on Currency Thoughts that on a niche service like mine pays too little to cover administrative costs. The common thread running through all these sorts of partnerships was no guaranteed money for me. I was to provide a service, taking up time and energy and incurring net costs for the elusive gift of “greater traffic.” I initially accepted a number of these offers, taking several leaps of faith that never led to a stream of money in return.
Fortunately, I had sufficient savings to manage, and as time passed, what began as active job searching evolved into a virtual job that delivers psychic income but not hard cash. Producing Currency Thoughts is not very different from what I did in my paid career for 35 years. It keeps me intellectually engaged, and what I contribute professionally to U.S. output is not so different from before, except that my output is available to everybody rather than a select few and that the price for this packet of information and opinion, which used to be high, is now free. Currency Thoughts adds to America’s physical gross product, if not the revenue gross product. Think of my role as an augmenter of virtual GDP and virtual hours worked in the United States. What I and others like me do influenced the measured segment of the economy, creating competition for activities that are part of GDP or non-farm payroll employment. Time that I spend producing Currency Thoughts becomes time not spent engaged in personal consumption, which is beneficial for my household budget but a drag impeding the economy from returning to its potential trend.
My paid career landed just a couple of years short of retirement respectability. Things have worked out okay, thanks in part to the Internet without which a much more abrupt closure would have been unavoidable. But I worry about younger baby boomers, some of whom will not turn 60 for at least another six years or be eligible for social security before 2026, if then. The lack of full-time work, or any job, for that length of time cannot be dismissed as taking early retirement. That may be the imposed result, but for all too many the outcome was not a planned one. From a policymaking standpoint, it moreover does a disservice to conceptualize the problem of long-term unemployment as one of demographics related to the ageing baby boomer generation. When viewed in that manner, the problem appears self-limiting and therefore not one to which urgency need be attached now. If not addressed, the United States will sacrifice an enormous quantity of potential hours worked and instead experience an equally large social cost that shouldn’t be inevitable.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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