Last summer, I shared eight charts that showed the sad state of the U.S. job market. The images focused on a lack of housing and manufacturing jobs, and the fact that a service-driven economy an information-focused labor market don’t lend themselves to as many high-paying jobs — or even as many gross jobs overall.
Well, that narrative continues to play out in 2013. It is increasingly clear that as the world gets more high-tech, many 20th-century jobs are dwindling … and may never return.
Take a look:
Housing: Consider this Wall Street Journal snapshot of unemployment by specific occupations. It’s probably no surprise to see “actors” boasting a 28.5% unemployment rate — but consider that the others above 25% are mobile home installers (35.5%), plasterers (30.5%) and rebar workers (27.0%). How come the housing rebound hasn’t resulted in a housing jobs rebound? Well, in part because even the modest recovery in housing leaves a long way to go from peak levels. And more and more data shows we are becoming a nation of renters, not buyers, so housing may never come back after this mortgage meltdown and lack of confidence in homes as assets.
Finance: Another industry that has collapsed and has failed to recover is finance. Morgan Stanley (NYSE:MS) just announced it will lay off 1,600 workers. This is after Citigroup (NYSE:C) said it will let go 11,000 just before Christmas, and after Bank of America (NYSE:BAC) cut 16,000 folks loose in September after a staggering 30,000 layoffs during the depths of the financial crisis. It’s easy to vilify Wall Street, and it’s easy to understand the evaporation of hundreds of thousands of finance jobs as the funny-money economy of the early 2000s went “poof.” But that doesn’t make the hole in the labor market any easier to fill.
Manufacturing: A colleague sent me this high-tech video of how Tesla (NASDAQ:TSLA) manufacturers its cutting edge cars. Try to count the number of human beings on the factory floor. (Hint: Ignore the foreground where actual manufacturing takes place — one person is riding a bike in the blurry distance at 1:18). This says just about everything you need to know about American manufacturing. Furthermore, consider the fact that the jobs that do require a human hand are increasingly deflationary. How about an average UAW wage of just $19.10 an hour, or under $40,000 a year? How about union-protected General Motors (NYSE:GM) jobs that can pay under $35,000 annually? These jobs are barely middle class, and it’s hard to imagine any shift in this downward spiral of wages.
Service: The only area of growth is in service, which speaks to the collapse of tangible businesses in the 21st-century American economy. Of the 1.84 million new jobs added in 2012, 25% were in professional and business services (472,000) and 15% were in food services and drinking (286,000). Food service is hardly a lucrative profession for most … and if the middle class continues to be hollowed out, dining out may not be so easy for many. Also, “professional and business services” sounds like a noble sector but is inherently reliant on secular business growth and enterprise spending. Those jobs may be the first to get cut or outsourced during tough times, and can include menial data entry and clerical work that is hardly a guaranteed berth in the middle class.
It’s worth noting that of the jobs created in 2012, 21% were in health care and social assistance (391,400). That remains a bright spot for any aspiring nurses and doctors and dentists … but if you’re in any other profession, it seems like mighty slim pickings in the 21st-century American economy.
- It also doesn’t help that Boomers are clinging to their jobs out of necessity due to a need for health insurance… but that may change thanks to Obamacare. (USA Today)
- Lest you think youth unemployment is only a problem in Europe and the Middle East, Americans 18-29 have a 11.5% unemployment rate — and minority jobless rates are as high as 22%. (Generation Opportunity)
- Last year, the median household income in the U.S. hit the lowest level since 1995 when adjusted for inflation. (FT.com)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.