Saturday, October 3, 2009


"If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994."


I was talking to a plumber on a job the other day and he told me that 650 guys are sitting at the hall looking for work in St. Louis. I asked him how many plumbers were in the union here and he told me around 1300. My simple high school math skills tell me that is an unemployment rate of 50% in the plumbing trade. I know that the other trades aren't much different and that the non-union guys (me included) are working at a fraction of their normal rate of pay to stay busy. Construction has traditionally been very stable in St. Louis and accounts for a large part of the economy nationwide, along with the auto industry. With these in collapse, how can we possibly be looking at any sort of recovery?

An even larger problem facing construction is the glut of workers. The availability of cheap money that has fueled the housing boom of the last 15 years or so has created a demand for workers that far exceeds the natural need. When I got into the trades in the early seventies most people, myself included, went into construction because a family member brought you in. This was a father to son kind of business. It was seasonal, too. We knew that come winter the jobs would shut down until spring for the most part and that we'd better save some money to get through. There were still carpenters working well into their sixties because their knowledge was valued as highly as the speed and strength of the younger guys.

Over the last decade or two people have entered the trades to satisfy an artificial demand created by government interference in the market place. Construction has become an assembly line work environment, where speed and strength are the most important qualification, experience coming up a distant second. This has allowed for way too many people to become construction workers. Now that housing has begun to return to a more natural level of demand, what will all of these people do. Most have very limited skills, beyond moving as quickly as possible to fulfill their function in the assembly line. They are not much different than any other factory worker in this regard.

We have created, through government interference in the marketplace, another group of workers with no real skills and expectations of high pay that have lost their jobs, forever. With an economy built upon consumer activity, how can we ever hope to see a return to the lifestyle of the past with so many unable to ever return to the income levels that supported it? The answer is, we can't. Not in the foreseeable future, anyway.

As a country we need to lower our expectations in regard to lifestyle and wages. We need to start building things again, creating real wealth in factories and on jobsites across the country. We are going to have to compete with those we have given all of this work to and take it back. We won't be able to do it with high wages and low productivity. For the good of future generations we are going to have to suck it up, take the hit and get back to work, doing whatever we need to do to return the jobs to this country.

Unions, get over it. Your guys can either have jobs, at a competitive cost of employment, or they can sit home and bitch about how unfair life is. This doesn't mean working at slave rates. There is a lot that goes into the cost of goods beyond wages.

Managers, your college degrees don't have the value that you were told they would. You need to work for the good of the company and the country. This may mean getting dirty every once in awhile. You need to realize that the paradigm has shifted. I hear that cliche in offices all of the time, usually meaning nothing more than someone trying to sound like they know what they're talking about. Well, it's really happened now so you better figure out what it means. You need to manage your businesses effectively, lowering the cost of goods, making them competitive at a worldwide level.

The World War Two generation was called upon to face down Fascism and save the free world. They did it and we now call them the greatest generation. Now it's our turn. What will future generations call us? Make no mistake, we are at war. This war will determine our future. We are all part of it, whether we want to be or not. No one gets a deferment.

To get a feel for what we are facing read this article at Business Insider. The rate of job loss is at Great Depression levels and it continues to increase. Look closely at the charts this article provides. We are heading over a cliff. Prepare yourselves and your families for what is ahead of us this winter. If you are old enough to remember knowing people that went through the Depression you will remember that they usually kept plenty of food and other supplies stashed in the basement. This was a habit learned through hard experience and something we should try to learn from today.

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