We Americans like to think we live in a society without a class structure and its associated boundaries. We’ve historically prided ourselves on the egalitarianism promoted by the founding fathers; however, class has always been an underlying yet quiet force in American society. That’s about to change dramatically as a more visible class divide is emerging within the United States, and it’s not about race, wealth or the social register. It’s about employment.
While recent jobs statistics were disappointing, many point to growth in the economy as an indication that the overall employment picture is improving; however, that isn’t necessarily the case. In fact, the United States may well be facing a long-term structural unemployment rate that is considerably higher than previous employment history would suggest. Consider the following: The May unemployment rate stood at a deceptive 9.1 percent. This official unemployment rate is what the Bureau of Labor Statistics calls the U-3 measure, examining total unemployment as a percent of the civilian labor force. Look at the U-6 measure and the unemployment rate rises to a woeful 15.8 percent. That’s because the U-6 rate includes discouraged workers who have given up looking, those employed part-time because they can’t find a full-time job and people who are neither working nor looking but are available to work and have looked for a job within the last 12 months. To me, the U-6 rate is a more accurate view of U.S. employment.
Just ask the unemployed in certain segments of our society and you won’t hear encouraging words. This new class divide shows itself when you see that for those with less than a high school degree, unemployment is 14.7 percent, but only 4.5 percent for those with a bachelor’s degree. African-American men 20 and older suffer from a 17.5 percent unemployment rate, with that soaring to 40.7 percent for black teens. Teens aged 16-19 overall have a 24.2 unemployment rate.
As a recruitment and staffing company executive, I’ve witnessed recently employers with a mentality of “don’t apply unless you already have a job.” This distinction is aimed at those who lost jobs during the recession and haven’t been able to find new ones, or have found jobs at less pay. When I’ve asked employers why they are taking this stance, the response has been that it’s a buyer’s market and they want employees whose skills are current.
The employable class is college-educated, skilled and adept at technology, if not technology specialists. The new unemployable class lacks education, doesn’t have skills or hasn’t kept their skills current. Also, they may have had the bad luck of being laid off during the recession. Either way, they haven’t been able to navigate a changing work environment and are being left behind those that have kept their jobs.
The result of this emerging divide is a middle class that’s at risk, as more workers are permanently unemployed or underemployed. The consequences for our economy and society are significant. The middle class has long been the bedrock of American values and its consumer spending has been a primary driver of the economy.
Middle-class wages have long been stagnant. What is happening now is that former members of the middle class are finding themselves without jobs or with jobs that pay far less than what they once earned. Now thousands of once productive, upwardly mobile, tax-paying citizens are joining a group new to them – the disenfranchised. While once their tough choices involved deciding between a summer vacation or a new refrigerator, their choices now are whether to pay the rent or buy groceries.
These factors lead to downward mobility – with those born to the “unemployable” class staying there – and an economy that only rewards those at the top. This means that for too many citizens, the American dream is just that – a dream.
The breadth of this problem goes far beyond an unemployment rate statistic and there are no simple solutions. More government programs aren’t the answer and they aren’t affordable. In fact, I think that government programs are partially to blame, giving Americans a sense of entitlement to high pay and plentiful benefits for less work and fewer skills.
Perhaps the best place to start to address this issue is with the individual. For the majority of the work force, the best defense against the emerging class divide is for the individual to take personal responsibility for his or her situation and society to insist that they do. Workers must adapt to constantly changing conditions and not expect the workplace to modify to suit them. They should find ways to stay current with their skills, even when unemployed. This emerging class divide will have a Darwinian effect in the workplace – those that adapt best will survive.
James Thompson is the president of The InSource Group based in Dallas, and can be reached at JT@insourcegroup.com.