When is the madness going to end? The February job report showed that the country was still bleeding jobs, albeit at a much slower rate and that unemployment still held at 9.7%. Of course the number of discouraged workers who are no longer working obviously continues to climb though the figure is seldom reported – hence no one really knows the magnitude of the problem. So when is it going to end? And who will be the winners and losers? Richard Florida, the creative class guru, looks at the winners and losers from a geographic perspective. Economic disruptions of this magnitude change the geographic landscape as economic activities shift or disappear. New York will probably not lose its place as the financial capital of the universe (even though some would wish otherwise). Even though the finance sector accounts for 22% of local wages; the finance sector was actually bloated and needed to be trimmed. But NYC can weather the storm because its economy is so diversified. Finance represented only 8% of the workforce, according to Florida, and a drop of a percent or two will not hurt over the long run. For communities heavily dependent on financial service jobs – especially Bloomington-Normal IL, Des Moines, IA, and Hartford for example, the pain could get worse. Communities built on the sands of the housing market and that have lived off of market speculation in real estate can expect to suffer for a longer period – he provides Phoenix and Las Vegas as two good examples. The old manufacturing towns like Detroit will have a very difficult time recovering and will continue to shed jobs. There is hope – Pittsburg proved that – but the pain will run deep before recovery from the ashes. The winners are clearer – the fast cities – anchored by highly educated people and a diversified economy that can withstand “spiky” economies. Look for Boston to D.C., Charlotte to Atlanta, Houston to San Antonio, Tampa – Orlando-Miami, Portland to Vancouver (BC that is) and (my favorite ) Chicago to Minneapolis to recover faster and prosper.
Even when prosperous times return, not everyone is going to find employment. In one of the more depressing outlooks, Don Peck (http://www.theatlantic.com/magazine/archive/2010/03/how-a-new-jobless-era-will-transform-america/7919/) suggests that many of us may not be able to find the type of employment to maintain existing life styles; role reversal with men staying home may become more common; but the most troubling news the outlook for our youth – our educated youth included. Immobilization seems to be common – and a fear is setting in that there is nothing for me out there. Will our youth become like the youth of Japan in the 1990’s staying home in their rooms (see Shutting Out the Sun by Zielenziger)?
I am concerned that Peck may be right though I see much promise out into the future. However, when 72% of Boomers say they are afraid to retire (and probably won’t until into their 70’s); when job loss continues without creation of new jobs because small business are being strangled; when the skill gap continues to widen, placing the jobs with the most opportunity out of the reach of many college graduates (and they didn’t even know it when in school), the outlook looks daunting in turning this around so that each of our young adults can find opportunities to prosper. They are not slackers; they bring wonderful talents (often undernourished and undervalued). Something has to give and it probably won’t be coming from the government!