How a New Jobless Era Will Transform America

I'm old and generally pessimistic. But I've seen enough recessions to know that when you've read the seventeenth article about the never-ending bottom (as I did during the reagan era, during the early 90s when Germany and Japan were going to destroy the US economy, and post dotcom collapse), I can't help but think it's time that the pundits will all be contradicted on the upside. Just like they were on the downside.

Nations that have demographics and immigration policies that promote population growth are going to succeed comparatively over the next 20 years. The US isn't at the top of the heap there, but its close.

The thing that has always amazed/disgusted me is how our education system trains people to be passive consumers, and to leave school "looking for a job", as if jobs somehow grew on trees and would eventually fall when ripe.

Until people learn from the cradle that they're not owed a job by anyone, but have to create value of some sort, either for someone else, or for themselves, we'll have this same sad situation.

Someone "stuck at home" is in the perfect situation to start creating value that other people are willing to pay for: mowing lawns, baking bread, making furniture/simple machines in their home workshop, using whatever raw materials and machinery their forebears have amassed and are freely available, but, most of all, using their brains and their willpower.

I wonder if there is a way to profitably exploit this?

Presumably bad news in the hiring market for new graduates is good news for YC: when the alternative to YC is picking up the phone and having Google and Microsoft getting into a bidding war over you, startups look insane, when the alternative is being a "parasite single" (wonderfully evocative Japanese English coinage for "lives with Mom and Dad"), having your ramen paid for for a few months must look pretty attractive. Granted, the vast majority of people capable of starting startups are probably much more employable than the average college graduate or the average inner-city dropout.

Is there anything the rest of us can do? "10% discount on lifetime wages if you hire during a recession" seems like it would matter if I were hiring, but I'm not. Does anybody have any other clever ideas?

I've got one: I can't offer anybody full-time employment but if somebody could vastly decrease the friction of employment I'd love to have employment available as a service. Something like what the India/Philippines virtual assistant companies perform, except with a more consistent level of quality.

Working for it wouldn't be the most fulfilling existence in the world, but it would pay for rent, food, and loan payments while folks look for more permanent opportunities, and the virtualized nature of it would make it more conducive to that than e.g. trying to get a job in food services. Plus, unlike your local On The Border, I'm not going to ask "So Joe, are you going to be available in 3 months or will you be going back to school?" because I have no particular need for Joe to be personally available in 3 months -- I don't have to train Joe, so it doesn't matter to me if I'm working with a new Joe come fall.

Currently I do a wee bit of this via freelancing, but freelancing requires friction from me -- I need to find freelancers, supervise them, pay them, find replacements when they flake out, file tax documents for them, etc etc. That's a whole lot of grunt work for something which is supposed to save me from doing the grunt work. I want the API to grunt work.

My view is that the article is on the optimistic side.

It accurately describes the best case. It admits that nobody knows how bad it will be. But it fails to talk about known structural problems that we still face.

We have coming credit crunches in commercial real estate when ARM loans reset, prime home mortgages when ARM loans reset, private equity when principal comes due on a ton of LBOs, local government as their tax base continues to decrease, unfunded obligations increase, and they continue struggling under a major load of debt, and local governments as well as their pension funds suddenly lose large amounts of money due to overexposure to the private equity debacle.

Of course we have bright points like bank profits, right? Wrong. The only reason that banks are recording a profit is that during the credit crisis they were allowed to stop marking debt to market. The major banks are all sitting on a ton of future losses that are not properly accounted for. But since their unrealistic accounting recorded a profit, they are paying themselves enough money that the bankers (if not their employers) will ride out the coming crises.

I could say more but I'll stop. I'm depressing myself.

I'd love to see the ideas generated by a Y Combinator RFS for harnessing millions of unemployed/underemployed workers.

Amazon Mechanical Turk is one part of the picture, and it opens up the door to more. Anything that makes it cheaper to create work, hire employees/freelancers, or find jobs is valuable in this economy. Or ways for people to earn money besides the mainstream labor economy. Or something that can generate value from activities that people do with their idle time while they're unemployed - whether it's constructive like Wikipedia or entertaining like Farmville.

There must be a template article out there for journalists. When it's a slow news day you fire it up, fill in the blanks, and a few minutes later you've got an article about how 20 somethings live with their parents, have no self direction, and feel of sense of entitlement.

I think the same template has been in use for generations.

If you are receiving unemployment, I can't think of a better time to start your own business. Great companies will be born out of this era that were bootstrapped all the way. I think frugality and a focus on the bottom line is a renewed theme. Even if you fail miserably you'll be light years ahead of everyone else.

Bit of a catch-22 with harnessing the underemployed. The longer the economy maintains large numbers of underemployed, the less consumption in non-essential goods and services, and the less people buying whatever it is you sell, leading to the more underemployed, and the less consumption ... But if consumption increases, right when you can actually use all that labor they start to dissapear to proper jobs.

The idea of total jobless-ness makes me think of a short sci-fi story: http://marshallbrain.com/manna1.htm

ojbyrne, you raise a great point. But still, and perhaps naively, I find myself bothered by this recession in particular. In previous recessions the backbone of America -- our immigration policy, culture of competition, education and infrastructure -- made it virtually certain that new indstries, wherever they form, would center in the US. In our present state our Universities are still the best in the world and our immigration policy, albeit under fire, is still flexible enough to attract the best and the brightest. Yet I know no less than three people (one with two successful exits and a third company in the worlds in Boudler, CO) leaving California because they want a better education for their children and the high schools are a mess. Our infrastructure is extremely old, and as to the culture of competition every year we are more protectionist in policy. It is not certain to me that we will dominate the next generation of technologies the way we did with automotive, computer, pharma and information in the past decades.

That link crashes my Firefox for some reason. Anyone else having the same problem?

It's the fault of the teacher's unions. 12 years of school gets you no employable skills. If they simply started teaching programming in grade 8 to everyone by grade 12 everyone would be employable (since there's an unlimited supply of programming jobs).