The recession got personal for me today, when I learned the reason a man I’ve been gaming with at my regular Friday night group hasn’t been showing up lately is because he’s broke and in a homeless shelter. I’m going to ask the Friday night gang for help for the guy — not money, but the job lead he needs much more. And it got me to thinking, about the two people I know who’ve actually been dragged under by the crappy economy.
You might wonder what took me so long. I knew it was getting bad out there, with the nominal unemployment rate at 10% and the actual hitting 17% and 6 applicants for every job. But my friends are mostly university-educated professionals in high-skilled tech jobs — last fired, first hired, and bright enough that if they had to change careers or found their own business they could probably hack it. Except…except for these two, who I’ll call A and B. What’s happening to them is bad. Very bad. And it illustrates a problem that’s going to get worse barring some drastic changes in the system.
A is the less screwed, so far. He’s in his mid-50s, white, college-educated, a tall Irish Catholic guy who looks right in a tweed cap. He’s a good bit brighter than average, probably in the 125-130 IQ range, but he’s bipolar (manic depressive) and has sleep-disorder issues. And he’s, hm, I think the best way to put it is rigid. Very capable at well-defined tasks and strategy games, but tends to get flustered and inarticulate when off his script. (No, it’s probably not mild autism, I know what that looks like; he’s actually more like OCD.) Socially awkward; few girlfriends, has never married, and tends to come off as an odd duck. He’s been underemployed all his life — clerking at a government agency, selling tract real estate, selling cars. Recently he’s working at a state-run liquor store, but that’s after two years of unemployment and an eviction fight. He’s got no cushion, nowhere to land if he loses this job.
B is in worse shape. About the same age. Average or a hair below-average intelligence — which, given the people he and I tend to hang with, has the consequence of almost always making him the slow guy in the room (I have to remind myself that this is a context effect when I deal with him). What I know of his job history is low-paid clerical work, the kind that requires a lot of specialized procedural knowledge that isn’t portable. A nice guy, very earnest, probably quite a hard worker. I believe he has a two-year degree from a local community college, but he shows no discernible high-value skills. Also unmarried, possibly asexual, slightly effeminate presentation. He’s black, which makes him a EEOC lawsuit risk — and if you don’t know how much that hurts his chances, you haven’t been anywhere near a small or medium-sized business in the last 30 years. Now he’s the guy in the homeless shelter.
What these guys have in common is that they’re only marginally employable. What borderline mental illness has done to one, mediocre skills and the unintended consequences of anti-discrimination laws have done to the other. As long as I’ve known both (and that would actually be most of my years, for both of them), they’ve worked dead-end jobs and put their passion into science fiction and wargaming. They’re decent, honest, unambitious men who have never wanted anything but steady work, a normal life, and a hobby or two. They’re not stupid and they have respectable work habits; in fact they’re probably more conscientious and safe than average. Now they don’t quite fit; too old, too geeky, too male, too quiet. The job market has discarded one and the other is hanging by a thread.
When I look at these guys, though, I can’t buy the explanation most people would jump for, which is that they simply fell behind in an increasingly skill-intensive job market. Thing is, they’re not uneducated; they’re not the stranded fruit-picker or construction worker that narrative would fit. Nor does offshoring explain what’s happened to these guys, because their jobs were the relatively hard-to-export kind.
No. What I think is: These are the people who go to the wall when the cost of employing someone gets too high. We’ve spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker — which meant the minimum revenue-per-employee threshold below which hiring doesn’t make sense has crept up and up and up, gradually. This effect was partly masked by credit and asset bubbles, but those have now popped. Increasingly it’s not just the classic hard-core unemployables (alcoholics, criminal deviants, crazies) that can’t pull enough weight to justify a paycheck; it’s the marginal ones, the mediocre, and the mildly dysfunctional.
If that doesn’t scare the crap out of you, you’re not paying attention. It’s a recipe for long-term structural unemployment at European levels of 10%, 15%, and up. What’s even crazier is that the Obama administration wants to respond to this problem by…raising taxes and piling more regulatory burden on employers.
Yeah. That’ll work, sure. It is, in fact, the diametrical opposite of what A and B need if they’re not going to rot in homeless shelters. They need the overhead of employment to fall, not rise. Otherwise their future looks pretty damn grim. They’ve got about a decade each before they can collect Social Security, and even on the optimistic assumption that Federal entitlements won’t crash or be eaten up by a hyperinflationary episode I wouldn’t bet a lot on either one living that long.
I now think the increasingly jobless recoveries from the last couple of downturns were leading indicators. The end of the post-New-Deal fantasy that we could increase the friction costs of capitalism without limit, regulating and redistributing our way to prosperity, is hurtling towards us like a dark sun. A and B are two of the luckless bastards who are spiraling down its gravity well. Multiply them by ten million to see what it’s like when the contradictions of socialism on the installment plan come home to roost.