Enlightening NY Times article discussing who is truly feeling the impact of the economic recession. Probably not who you think.
Unlike the last two recessions — earlier this decade and in the early 1990s — this one is causing much more job loss among the less educated than among college graduates. Those earlier recessions introduced the country to the concept of mass white-collar layoffs. The brunt of the layoffs in this recession is falling on construction workers, hotel workers, retail workers and others without a four-year degree.
The blue collar workers – those who actually make things – are getting hurt the most. The people who push paper (Admitted, I will soon be one of these people) are not getting hurt as much. This is an interesting twist. If not for what it says about our economy – are we protected by globalization and imports even more during a recession? – than for how it supports even further getting an advanced education. It does kind of make sense. During a downturn, we purchase less “stuff”, we travel less. Those who make, sell, and provide these items are going to be hurt more by this.
The Great Recession of 2008 (and beyond) is hurting men more than women. It is hurting homeowners and investors more than renters or retirees who rely on Social Security checks. It is hurting Latinos more than any other ethnic group. A year ago, a greater share of Latinos held jobs than whites. Today, the two have switched places.
The most interesting theory about this article is who the author think will benefit from the recession.
Hard as it may be to believe, the crash will also help a lot of young families. The stocks that they buy in coming years are likely to appreciate far more than they would have if the Dow were still above 14,000. The same is true of future house purchases for the one in three families still renting a home.
Also, the poor will benefit generally. The writer suggests that those at the top of the socioeconomic ladder will get hurt by their tanking investments. The poor are benefitting from the Obama tax credits, and finally – since these blue collar jobs are getting hurt the most- more will see the value in education. That means that more will seek out education, and thus benefit them and their families incomes long term.
That particular last bit is important.
Of course, these two factors both boil down to redistribution. One group is benefiting at the expense of another. Yes, many of the people on the losing end of that shift have done quite well in recent years, far better than most Americans. Still, the shift isn’t making the economic pie any bigger. It is simply being divided differently.
Which is why the third factor — education — is the most important of all. It can make the pie larger and divide it more evenly.