The Pulse of the American Job Market

We need to start seeing more of these signs across America.

We need to start seeing more of these signs across America.

When I was young I believed that if you tried hard and got good grades in high school you would get an opportunity to attend a great college and subsequently get a degree and go on to make lots of money in your field. Though this still may be true for some, but for the vast majority of Americans this dream is being derailed by crippling college costs, a flawed way of thinking, and an even worse job market upon graduation.

I’ll use myself as an example: I attended the competitive Barrington High School located in the northwest suburbs of Chicago, a school where 97.3 percent of students graduate and 76 percent go on to receive a four-year college degree. I cherish my education from Barrington and wouldn’t trade the top-notch education and experience for anything, but I will admit we had a rigorous course load and an even stricter counseling center. I will never forget the day a counselor told me to “lower my standards” because it was “extremely unrealistic for me to attend Northwestern University.” She told me to focus on a more sure-fire career than broadcasting but if I was hell-bent on broadcasting I needed to look at more “realistic” schools like Syracuse, Ohio State, Miami (FL), and Columbia College Chicago. I chose Columbia College Chicago and three short years later I graduated with a bachelor’s in broadcast journalism. I knew I needed (and wanted) to expand my education as I quickly learned the radio industry was one of the hardest to get into so I decided to apply to the one school I always wanted to go to: Northwestern. I was accepted. I immediately thought of that high school counselor who told me “no” three years earlier and I e-mailed her my acceptance letter to Northwestern University’s Masters of Sports Administration program with the note “Thank you very much for giving me the motivation I needed. But please don’t ever tell another student ever again they can’t accomplish something.”

It’s been nearly two years post graduation from Northwestern and I’ve realized neither my counselor nor I was correct in our assumption that work was easy to come by as long as you had a college education or where that college education came from. I’ve applied to hundreds of companies and received a total of four interviews. Like many of my fellow graduates I took a low-paying sales job I didn’t particularly enjoy. These days I dabble in the stock market while simultaneously working for Senator Marco Rubio and exploring other businesses ventures.

Why am I telling you this? Because my story is startlingly similar to the stories I hear daily from other recent college graduates. Like many Americans I make my living in something other than my degree. These days, when I’m not working for Senator Rubio, I’m trading stocks and running this web site because that is the world we live in: find whatever you can to get by. I was fortunate enough to have a family member show me the ropes of the stock market and was humble enough to take a position where I can reach out and help the community to further my knowledge in the political world.

My generation is the first in American history that is projected to make less and have less financial stability than our parents. Yet my generation will pay three times more for a college education than my parents did as the average cost of tuition in 1980 was $11,909. It is $30,094 today. We will pay more for a home as in 1987 the average family home cost $105,800. Today it is $134,500 – up 27 percent from 1987 yet down 32 percent from the $198,000 price tag at the height of the housing bubble in Q1 of 2006. And we will pay more for everyday items such as milk which cost $2.47 cents in 1995 but is $3.67 today – nearly 50 percent higher. A gallon of gas was $1.31 in 1980 and it is $3.48 today – nearly double. Even the average cost of a car has increased 30 percent across the board. And yet through all this outrageous inflation, one thing has remained relatively unchanged: our wages.

The average American made $47,000 in 1985 but are making $51,000 in 2014 – that’s an increase of just 8.5 percent in nearly 30 years – to hammer the point home even more salaries grew by an average of .28 percent per year while average expenses increased by 1 percent each year. The most alarming statistic is the average American in 2014 is around $200,000 in debt. What’s more is our employment rate is strengthening – down from 6.2 percent in July to 6.1 percent in August. However this is not taking into account the millions of Americans who have stopped looking for work or are underemployed. When factoring in those numbers the true unemployment rate hovers around 10 percent.

So if we pay an average of 30 percent more for college, homes, and vehicles, and nearly 50 percent more for everyday items, it’s easy to see why we’re falling behind when we’ve made only 8.5 percent improvement in average wages. There are a couple of reasons why we’re where we are now and how we can fix it:

#1 – A non-specific school system

Thirty years ago it was not a “requirement” to go to college. You could get your high school diploma, go to work at a company or learn a trade, work there for 20 years, move up the corporate ladder and eventually make a very comfortable living. The theory then was people who went to college went to get a specific knowledge set according to their career. A journalist went to college specifically to learn how to be a journalist. Somewhere along the way there was a shift in consciousness.

Now, generally speaking, many kids go off to college with a vague idea of what their future plans are. They drift through their pre-requisites accumulating general knowledge in the sciences, mathematics, and history. But they lack a razor-sharp focus on a specific career. Before it was “I’m going to go to college to learn how to be a dentist” and now it sadly is “I’m going to go to college to figure out what I want to do and then I’ll learn about it.” All the while they’re accumulating crippling debt for knowledge that is oftentimes inapplicable in the real world.  High school never taught me how to balance a check book or file my taxes or negotiate a business deal. But I can tell you how to calculate the circumference of a circle. Now ask me if I’ve ever used that in the real world? The answer is no.

What happened was millions of Americans went to school just to get the degree thinking the degree equaled a job when in actuality it is the knowledge and experience you obtained during your time in school that you put in your toolbox to one day use those tools in the work force. And high schools perpetuated this by ignoring the specific knowledge needed for certain work forces and instead hammered home the sciences and math courses telling their students, “Just do well to get into a great school!” No. How does this sound: Do well in your target field to get into the school that is going to give you the most specific knowledge you’ll need to succeed in your field?

Employers now more than ever are adopting an almost assembly line-like work force. They want specific skillets for even more specific jobs.

#2 – The key to personal wealth is not corporate America

Even if you acquired a specific knowledge set, did well in both high school and college, graduated with honors, and nailed that awesome job where you make nearly six figures, I’m sorry to tell you, you’re still not on track to be wealthy. You will be rich. But rich is making $150,000/year driving a BMW. That’s a great life. But wealth is making $1,000,000/year driving a Ferrari. And Americans have become jealous and envious of those folks. I see it differently. I look up to those folks and study how they made their mark in the world.

The thing is in order to have an incredibly wealthy life you must first understand wealth doesn’t come from being a cog in the system, but rather an innovator of the system. And everyone is protecting their system. What many don’t understand is you aren’t invited into this system, rather you have to forge your own.

#3 – In order to have a healthy job market, you need healthy companies

This is where the biggest debate about the state of the American job market comes in. The truth is in order for companies to be hiring and paying well they need to be making money in the first place and they must have a need for help. Just because millions of Americans graduate from college this year doesn’t mean there are equal millions of opportunities available. But there are things you can be doing to promote the growth of companies in the United States:

– Make it attractive to start a business in America. We have to offer small businesses incentives to keep growing rather than taxing them to the point of near extinction. On average more than half of business expenses are tax related. Why would I ever want to start a business here when I owe a third of my expenses to the government? Not to mention the taxes businesses pay on employees, real estate, and other industry-specific taxes.

– Get back to exporting instead of importing. I use the car industry for example: Japanese brands are owning the roads in the United States because their vehicles are cheaper, better on gas mileage, and tend to last longer and are more reliable than say a Ford, Chevrolet, or Dodge. People tend to not only buy what is affordable but also what is reliable and what gives them the most bang for their buck. That is hard to come by in American products these days.

– Make it easier for start-ups by offering loan programs and investment opportunities. Quick side note: the explosion of crowdfunding (KickStarter, Indie GoGo, Causes) has been an injection of octane into the creative fields. But we can be doing a better job from a government standpoint on getting banks to loosen up the restrictions on businesses loans and interest rates without sacrificing regulations to keep them in check once their business is launched.

#4 – Cutting down on inflation

This is probably the biggest problem hurting the everyday American. As I pointed out earlier in the piece, American wages have increased by 8.5 percent in 30 years while everyday items have increased by an average of 30 percent in the same amount of time. On a year-by-year basis that means Americans are falling behind by .72 percent per year. If that trend continues over the next ten years Americans will have fallen behind another 7.2 percent. In real world terms that means we will be making an average of $54,672 (up just over $3,600 in ten years) but will be paying over $4 for milk and a gallon of gas, and over $33,000 on college tuition when we paid 10 percent less than that just 10 years prior.

So how do we fix that? One way is reducing inflation. The problem with that is inflation is not something that can be reduced overnight. Rather it is a long-term process where implications won’t be felt for several years or even a decade after the changes take effect.

The biggest problem with this is it’s a double-edged sword. To bring down inflation you have to increase interest rates – which completely negates the problems I laid out in #3. Therefore you have to explore alternative ways to bring down inflation, one of those being Supply Side Policies. The basic idea of Supply Side Policies aim to increase long term competitiveness and productivity by privatization and deregulation in order to make businesses more productive.

All is not lost

I believe there is still a bright American future ahead. But we will need the right leadership to right the ship and get us there. I hope to one day assist in that movement using the ideas I’ve laid out ahead.

What do you think?

Follow me on Twitter @Marco_Scola

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