Marginal Devolution
<p>The recession got personal for me today, when I learned the reason a man I&#8217;ve been gaming with at my regular Friday night group hasn&#8217;t been showing up lately is because he&#8217;s broke and in a homeless shelter.  I&#8217;m going to ask the Friday night gang for help for the guy &mdash; not money, but the job lead he needs much more.  And it got me to thinking, about the two people I know who&#8217;ve actually been dragged under by the crappy economy.</p>
<p>You might wonder what took me so long. I knew it was getting bad out there, with the nominal unemployment rate at 10% and the actual hitting 17% and 6 applicants for every job.  But my friends are mostly university-educated professionals in high-skilled tech jobs &mdash; last fired, first hired, and bright enough that if they had to change careers or found their own business they could probably hack it. Except&#8230;except for these two, who I&#8217;ll call A and B.  What&#8217;s happening to them is bad.  Very bad.  And it illustrates a problem that&#8217;s going to get worse barring some drastic changes in the system.</p>
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<p>A is the less screwed, so far.  He&#8217;s in his mid-50s, white, college-educated, a tall Irish Catholic guy who looks right in a tweed cap.  He&#8217;s a good bit brighter than average, probably in the 125-130 IQ range, but he&#8217;s bipolar (manic depressive) and has sleep-disorder issues. And he&#8217;s, hm, I think the best way to put it is <em>rigid</em>.  Very capable at well-defined tasks and strategy games, but tends to get flustered and inarticulate when off his script. (No, it&#8217;s probably not mild autism, I know what that looks like; he&#8217;s actually more like OCD.) Socially awkward; few girlfriends, has never married, and tends to come off as an odd duck.  He&#8217;s been underemployed all his life &mdash; clerking at a government agency, selling tract real estate, selling cars.  Recently he&#8217;s working at a state-run liquor store, but that&#8217;s after two years of unemployment and an eviction fight.  He&#8217;s got no cushion, nowhere to land if he loses this job.</p>
<p>B is in worse shape.  About the same age.  Average or a hair below-average intelligence &mdash; which, given the people he and I tend to hang with, has the consequence of almost always making him the slow guy in the room (I have to remind myself that this is a context effect when I deal with him).  What I know of his job history is low-paid clerical work, the kind that requires a lot of specialized procedural knowledge that isn&#8217;t portable.  A nice guy, very earnest, probably quite a hard worker.  I believe he has a two-year degree from a local community college, but he shows no discernible high-value skills.  Also unmarried, possibly asexual, slightly effeminate presentation. He&#8217;s black, which makes him a EEOC lawsuit risk &mdash; and if you don&#8217;t know how much that hurts his chances, you haven&#8217;t been anywhere near a small or medium-sized business in the last 30 years.  Now he&#8217;s the guy in the homeless shelter.</p>
<p>What these guys have in common is that they&#8217;re only marginally employable.  What borderline mental illness has done to one, mediocre skills and the unintended consequences of anti-discrimination laws have done to the other.  As long as I&#8217;ve known both (and that would actually be most of my years, for both of them), they&#8217;ve worked dead-end jobs and put their passion into science fiction and wargaming.  They&#8217;re decent, honest, unambitious men who have never wanted anything but steady work, a normal life, and a hobby or two. They&#8217;re not stupid and they have respectable work habits; in fact they&#8217;re probably more conscientious and safe than average.  Now they don&#8217;t quite fit; too old, too geeky, too male, too quiet. The job market has discarded one and the other is hanging by a thread.</p>
<p>When I look at these guys, though, I can&#8217;t buy the explanation most people would jump for, which is that they simply fell behind in an increasingly skill-intensive job market.  Thing is, they&#8217;re not uneducated; they&#8217;re not the stranded fruit-picker or construction worker that narrative would fit. Nor does offshoring explain what&#8217;s happened to these guys, because their jobs were the relatively hard-to-export kind. </p>
<p>No.  What I think is: These are the people who go to the wall when the cost of employing someone gets too high.  We&#8217;ve spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker &mdash; which meant the minimum revenue-per-employee threshold below which hiring doesn&#8217;t make sense has crept up and up and up, gradually.  This effect was partly masked by credit and asset bubbles, but those have now popped. Increasingly it&#8217;s not just the classic hard-core unemployables (alcoholics, criminal deviants, crazies) that can&#8217;t pull enough weight to justify a paycheck; it&#8217;s the marginal ones, the mediocre, and the mildly dysfunctional.</p>
<p>If that doesn&#8217;t scare the crap out of you, you&#8217;re not paying attention.  It&#8217;s a recipe for long-term structural unemployment at European levels  of 10%, 15%, and up. What&#8217;s even crazier is that the Obama administration wants to respond to this problem by&#8230;raising taxes and piling more regulatory burden on employers.  </p>
<p>Yeah.  That&#8217;ll work, sure.  It is, in fact, the diametrical opposite of what A and B need if they&#8217;re not going to rot in homeless shelters.  They need the overhead of employment to <em>fall</em>, not rise.  Otherwise their future looks pretty damn grim.  They&#8217;ve got about a decade each before they can collect Social Security, and even on the optimistic assumption that Federal entitlements won&#8217;t crash or be eaten up by a hyperinflationary episode I wouldn&#8217;t bet a lot on either one living that long.</p>
<p>I now think the increasingly jobless recoveries from the last couple of downturns were leading indicators. The end of the post-New-Deal fantasy that we could increase the friction costs of capitalism without limit, regulating and redistributing our way to prosperity, is hurtling towards us like a dark sun.  A and B are two of the luckless bastards who are spiraling down its gravity well. Multiply them by ten million to see what it&#8217;s like when the contradictions of socialism on the installment plan come home to roost.</p>
