Thornton on America’s Job Divide

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Thornton on America’s Job Divide

September 25, 2015 recently interviewed Mark Thornton and asks if there's an employment divide between young and old workers:

The truth about employment statistics is ugly when laid out in black and white.

Last month, the U.S. economy added a mere 126,000 jobs, the weakest growth in more than a year. These were disappointing numbers. The Washington Post reports economists had expected employers to have added 245,000 jobs in March.

But what’s even more shocking about these figures is who is getting those jobs…

“There are a variety of factors about why there are glaring job gains in the older demographic group and very little job creation for young adults,” Dr. Mark Thornton, senior fellow economist at the Mises Institute, said in an interview with WND. “The foundations for retirement are being killed off. The only financial investment benefits come from the stock market, which is risky – too risky to throw in an entire nest egg.

“Many times older people don’t have the savings to retire,” he continued. “Social Security doesn’t cover even a lower middle-class income, especially if you don’t own your home outright, so people are forced to stay in, or get back into, the workforce to build a nest egg.”

Some people saw their nest egg wiped out in the 2008 financial crisis. “That hurt a lot of older workers,” said Thornton. “And even for those with substantial savings, there’s no place to earn interest due to ZIRP [Zero Interest Rate Policy] and quantitative easing. A $1,000 CD at two-tenths of one percent interest only earns $2 per year, and a good chunk of that is taken up by inflation and taxes. So there’s no way people can retire unless they have a substantial amount of wealth, where they can afford to take risks in the stock and bond market.”…

“The younger generation has a different skills set than the older generation,” said Thornton. “They don’t have a lot of work experience. During my generation, by the time kids graduated from high school they would have had several types of jobs already, which built up an early work history. In this generation, young people may be college grads, but they may lack certain abilities.

“Younger people are highly skilled in some areas – computer science, coding, technical skills – but deficient in practical, blue-collar skills such as welding or wiring,” he continued. “Right now in our economy, we have a glut of workers for management, liberal arts and computer skills but a shortage of workers for practical skills. Public schools and universities have not kept up when it comes to preparing students for a realistic place in the workforce. They’re not looking at supply and demand. There’s either a huge surplus or a huge shortage.”

The problem won’t get any easier in matching supply and demand as industries change. “In banking, for example, more people are banking online so there will be less of a demand for physical banks. Financial education will have to accommodate this trend,” said Thornton.

Younger and older workers alike must face the future and recognize the changes taking place in the workforce. Thornton concludes, “One of the main forces of modernization and development is this: Technology, which increases productivity, is destroying jobs in certain areas while creating jobs in other areas. It’s our job in education and technology to convey this to younger people.”

Read the whole thing.

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