ANALYSIS/OPINION:
Finally liberated from his NBC job, Jay Leno — an inveterate saver, who turns 64 in April — now can laugh his way into a long, luxurious retirement.
Not so for most Americans.
On Friday, we learned that the joke’s on us — in a jobs report that shows that not enough Americans are back at work to nourish a growing and aging population, despite the trillions of dollars that have been borrowed to fund fiscal stimulus and the years that key benchmark interest rates have been suppressed.
For January, the Bureau of Labor Statistics reported that the number of employed persons reached 145.2 million — just below the January 2007 peak of 146 million, but up from the December 2009 trough of 138 million.
Meanwhile, America’s adult population grew from 230.7 million in January 2007 to 246.9 million in January 2014.
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At surface level, 800,000 fewer jobs for 16.2 million more Americans hardly sounds like “progress.”
The real employment problem: Joining the workforce
For decades in America, the road to financial prosperity started between the ages of 16 and 24 with a series of part-time jobs that lead to full-time employment.
Government data since 2007 paint a bleak picture of work possibilities for young Americans. In 2007, the youth unemployment rate was 10.8 percent; by 2009, it reached 15.7 percent; and in 2012, the most recent year for which annual data are available, the rate remained stubbornly high at 14.2 percent.
If you calculate unemployment ratios assuming that the percentage of persons electing to participate in the workforce stays constant at 2007 levels, youth unemployment jumped from 9.2 percent in 2007 to 18.9 percent in 2009 and to 20.7 percent in 2012.
It is not fair to characterize the period since 2007 as economic success when our youth, bereft of chances for work, are saddled with soaring societal debt.
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The false promise of liberating oneself from work
Young people are encouraged to labor long and hard, and save a portion of their income to one day liberate themselves from working for a living. But they are not the sole beneficiaries of such a way of life. We all are.
People fortunate enough to have full-time employment make commitments to fund purchases such as homes and higher education, once they think they have established a secure position at work and are following a personal-growth trajectory.
Those purchases, in turn, stimulate demand across the American economy and create the need for new employees.
Young people, already burdened by student loans and unable to find work amid a shrinking number of jobs, are less likely to create the relative security that drives demand in the economy.
Janet Yellen, Federal Reserve chair, faces the House Financial Services Committee on Tuesday and the Senate Banking, Housing and Urban Affairs Committee on Thursday. Members of Congress and Ms. Yellen should focus on the impact of America’s foundering economy on people struggling to start careers and form households.
How are young people supposed to pay for health care and save for retirement if they decline to enter the workforce?
If it is time to let interest rates rise, can we find ways to cushion negative effects of rising rates on the youth segment?
Politicians in both parties better start asking and answering tough questions about the bipartisan economic failure wrought upon all Americans, plainly evident since January 2007.
Otherwise, the political establishment and the financial establishment that feeds gargantuan excess are likely to be the only ones to enjoy the full benefit of a “liberation” they foolishly try to sell to an awakening public.
Even a rich comic such as Mr. Leno understands that losing a job before the traditional retirement age of 65 is not “liberating.” But having to wait years to join the workforce is senseless.
• Charles Ortel serves as managing director of Newport Value Partners (newportvalue.com), which provides economic research to executives and to investment firms.
• Charles Ortel can be reached at ckortel@yahoo.com.
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