The employment model in the US may be shattered beyond repair
This article from “The Economist” outlined some pretty troubling news. It seems the employment model (full-time salaried employment with benefits) may be shattered beyond repair:
Recent research suggests the unemployment rate is saying something important. It’s just that the message is a depressing one: America’s labour supply may be permanently stunted. If so that would mean that the economy is operating closer to potential—using all available capital and labour—than generally thought, and that there is less downward pressure on inflation than the Fed has assumed…
The proportion of people with jobs plunged from 63% of the population in late 2007 to below 59% in 2009. It has barely budged since, suggesting the output gap has not closed at all. The unemployment rate, in contrast, is 1.1 percentage points above its estimated “natural rate” of 5.5%, suggesting most of the output gap has disappeared. Finally, if one looks just at those who have been unemployed for less than six months, the output gap appears to have closed completely…
Unpublished research by Alan Krueger of Princeton University finds that in 2010 about 18% of the long-term unemployed quit the workforce each month. That has since risen to 24%. Meanwhile, the rate at which they find work has edged down to 10% per month. The work they find is often transitory or part-time. Thus, with each passing month, more of the unemployed are drifting to the fringes of the labour market than re-entering it. More monetary and fiscal stimulus may have saved them a few years ago, but are of much less help now.
This is very troubling and should be sobering for anyone currently employed and even more so for those not employed. I think if anything, this confirms my advocacy of adopting an entrepreneurial approach and focus to one’s career. Since we are already project managers, you will have the advantage of going from a job-based career to one that is project-based.
Given the information above, it doesn’t seem many of us will have a choice.