Friday, August 16, 2013

Will The Economic Plight and Suffering Of Young Greek Adults Become the Same Plight For Young American Adults?

As most informed people know, Greece has been a fiscal basket case for the past several years. Corruption, mismanagement of the economy, and political economic ignorance has driven the country into defacto, if not official, bankruptcy. Sky high national debt, sky high and chronic unemployment, and no viable economic or financial plan to turn the country around has created hardships for just about every Greek citizen.

But it seems that young adults in Greece, those that should be embarking on their careers and building their futures today, seem to be getting hit especially hard. Consider some of the findings from a recent Businessweek article about the young adults in Greece:
  • While overall unemployment in Greece is about 27%, for young Greek adults that unemployment figure is about twice as high.
  • In 2013 and 2014 it is estimated that about 40,000 government employees will lose their government funded jobs, making a horrible unemployment situation even worse.
  • Over 100,000 young Greek adults have left the country to find better paying employment overseas.
  • The Businessweek article discusses the plight of a young Greek woman who applies for one of 21 social worker jobs that are being interviewed for. She is one of about 2,000 people trying to land on of those 21 jobs.
  • Many young Greeks have been forced to move back in with their parents and families or need financial support from their families to get by.
Heart breaking that people have to leave their country to have any chance of a good life and good paying job and career.

But, the situation in Greece is not that different than the heartbreaking challenges and frustration of young adults in this country. Consider some facts and realities, as pointed out in a recent article from the Independent Journal Review website (“8 Signs You're a Young Adult During the Obama Administration“)
from August 6, 2013:
  • Since young American adults struggle to find a decent-paying job these days after graduating from high school or college, they are often left with no other financial option than to return home to live with their parents and families. According to a recent Pew Research poll, a record 36% of young adults (that's over 21 million) live with their parents. 
  • This fact has consequences all throughout the economy. Since fewer households are formed, the housing market does not grow as fast to accommodate the lower number of new households formed, less furniture and appliances are sold since there are fewer new households, etc., all of which depress economic growth beyond the fact that young adults cannot find decent employment.
  • As proof of this previous point, the article points at some research from Pew which found that while 40% of young adults owned their homes in 2007, the number dropped to 34% in 2011 in just four short years, and in a few of those years we were supposedly in an “economic recovery“ mode.
  • The Independent Journal article cites another article, this one from Soopermexican, that pointed out 7 out of every 8 jobs added by the Obama administration have been part-time employment. Given that 2 million American young adults graduate college every year, this administration and its economic policies are turning most of those graduates into part time workers.
  • While part time work for a college graduate can be frustrating, consider a recent assertion from NPR. NPR claimed as many as one-third of internships in this country are unpaid, and an even higher percentage pay less than minimum wage. Thus, it may be a better option, from a financial perspective, to flip hamburgers at minimum wage than to work for nothing or near nothing as an intern with only a faint promise of moving into full time work out of the internship.
  • No job means no money which probably means no new set of wheels. According to CNW Research, while young adults account for 27% of new car sales, that is down significantly from 38% in 1985. Thus, not only does the housing industry suffer from the economy’s inability to create worthwhile employment for young Americans, the auto industry suffers also.
  • Not only can’t young Americans look forward to that first big, full time, good paying job, they are already looking at how hard it is going to be to pay off their college loans. The Project on Student Debt estimates that in the past 25 years, the cost of college has risen by 900%. The Wall Street Journal estimates that two-thirds of college graduates have mounting student debt. Thus, young Americans might almost immediately take a hit on their credit scores since they cannot pay off their college loans because their college loans did not pay off in a good job. Thus, bad credit leads to the future inability or lessened ability to get a home mortgage or car loan, further depressing those two industries.
  • As a direct consequence of delayed financial, career, and housing stability, young adults in America are waiting until they're older to get married. A Pew Research analysis estimates that the median age at first marriage is higher than ever in America, 26.5 years old for brides and 28.7 years old for grooms.
  • Given the fact that young Americans are finding it difficult to find a good paying, full time job, they are saddled with debt , and raising kids is an expensive proposition, the Population Reference Bureau estimates that the U.S. fertility rate (# of children per woman) is now 1.9. How bad is that? 1.9 is lower than the fertility rate during the Great Depression, another bad economic time when kids were viewed as an expensive like to have, not have to have. Only this time, it is worse than the Great Depression.

Let’s go beyond these global trends and look at the latest Federal government jobs report as reported in Yahoo Finance on August 3, 2013 (“We Have Become a Nation of Hamburger Flippers”): 

  • Only 162,000 jobs were created in the month of July, a month that most economists expected to see at least 200,000 jobs created.
  • Even worse, updated job creation estimates for May and June were revised downward from their current estimates.
  • 69% of the jobs created in the second quarter  and 57% created in the first half of 2013 – were in the three lowest-paying sectors of the economy: retail trade, administrative services, and leisure and hospitality. 
  • These positions, which account for 33% of all private sector jobs, pay an average of $15.80 per hour.
  • “What you’re seeing is now the spreading of low wage growth,” says Dan Alpert of Westwood Capital, “Really, we have become a nation of hamburger flippers, Wal-Mart sales associates, barmaids, checkout people and other people working at very low wages. The fact is that the U.S. employment situation is more of a wounded beast than a bull.” 
Consider more, yet similar, details from an Associated Press report from August 3, 2013:
  • The 162,000 jobs the economy added in July were a disappointment as were the poor quality, pay wise and career wise, of those 162,000 positions.  Low-paying retailers, restaurants and bars supplied more than half of July's job gain.
  • "You're getting jobs added, but they might not be the best-quality job," said John Canally, an economist with LPL Financial in Boston.
  • Year-to-date in 2013, low-paying industries have provided 61% of the nation's job growth, even though these traditionally low paying industries represent just 39% of all U.S. jobs, Mid-paying industries have contributed just 22% of this year's job gain.

This is the so-called economic recovery that the Washington politicians have created for us, the weakest and lamest economic recovery in a long, long time in this country. We have over 20 million Americans either unemployed or under employed. We have the record for longest number of consecutive months with the official unemployment rate over 7%. We have a sky high national debt of almost $17 TRILLION that every American will have to pay off. 

And we have a train wreck (Senator Max Baucus’s words) called Obama Care about to hit young adults in America where they will become criminals in the eyes of Obama Care and Washington if they do not sign up for compulsory health care insurance, an added expense that many just cannot afford. Yes, from a young American adult’s perspective, the Washington political class has made their world and their future look a lot like Greece.

What can be done to change the situation before we actually become Greece? Albert Einstein once said that “the definition of insanity is doing the same thing over and over and expecting different results.”  Four years after the Great Recession ended we obviously have to do some things differently. What Obama, Reid, Pelosi, Boehner, McConnell, et al have been doing for the past four years has not worked, especially for young adults in this country.

Here’s a couple of potential solutions, based on Einstein’s observation:

  1. Kill Obama Care altogether and start over in addressing our health care cost crisis.  This act that would terminate the asinine requirement that anyone working over 30 hours a week  is “full time.” This insanity is causing/forcing businesses across the country to change their personnel profile from full time employment to part time employment, all because of Obama Care. Killing this law would free up time for business people to focus on growing their business, with both full time and part time employees, and growing the economy and not on what Obama Care’s 2,500 pages mean for their business.
  2. Dramatically reduce the thousands and thousands of  useless Federal government regulations on the books that cause business owners to waste time, energy, and money complying with many regulations that are useless from an environmental and safety perspective. 
  3. Create a one time tax holiday that would amnesty the over one trillion dollars of cash that American businesses have stashed overseas in order to avoid paying high Federal taxes on. Put in some restrictions that prevent those funds from being used for executive compensation, stock buybacks, etc. and allow only employment creating expenses to be incurred with these funds (e.g. building factories, hiring more shifts, providing job training, etc.)
  4. We need to overhaul our entire education system so that it is more focused on efficiently spending the way too much money the country already spends on education for far too poor results. Find out what other countries do to educate their kids far better than how we educate ours and then steal their good ideas. Make a case that becoming a welder, plumber, etc. is not a bad thing to pursue, that college is NOT for everybody.
  5. Rewrite the tax code so that it fosters economic growth rather than foster revenue growth for the Federal government and for the Washington politicians to waste.
  6. Allow only individual citizens to contribute to politicians’ campaign funds, not corporations, unions, PACs, and super PACs. I recent read an article that touched home in this area. The article made a data, fact based case that it is now a better business decision to spend a million dollars on Washington incumbent politicians and lobbyists to get a sweetheart deal from the government than it is to invest that million dollars in new plant and facilities, an option that would generate jobs in the process. Currently, that million dollars only creates a handful of high powered lobbyist jobs while corrupting the democratic and governmental processes in this country.

Unfortunately, according to Einstein, the odds of the current set of politicians doing something different, something effective is pretty small. They thrive and advance their political careers by maintaining the status quo. They keep their full time jobs, the fates of the careers of young American adults be damned. Even if it does turn the country into Greece.

But there is a way to take Einstein’s advice before it is too late. Visit the following website and join the cause to impose term limits on all Federal politicians. The current set of politicians are part of the problem, join the term limits drive and you can be part of the solution that results in Greece becoming a nice vacation and not becoming the financial reality for our kids and family members:

www.howmuchworsecoulditget.com

Doing things differently to help the young adults in America: sounds like a good idea and besides, how much worse could it get?

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w 


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