5 Ways to Maximize Your Work Commute

Much has been made in the last weeks about the steady drop in the unemployment rate. The latest numbers have unemployment down to 8.3 percent, which is much better than the 9 percent a year or so ago, but still historically high.

While many celebrate that the job market is seemingly going in the right direction, the reality is that numbers can be deceiving. Unfortunately, things are not as good as they seem for U.S. workers — especially those under 30.

Missing workers

While 8.3 percent unemployment seems high, when you take into account the number of workers who have stopped looking for work, the unemployment rate jumps to 17 percent according to a recent report in The Boston Globe. That equals to 5.4 million fewer people in the workforce over the last three years, which is a lot of lost productivity.

The potential consequences of the hidden unemployment are high. “Losing the productivity of more than 5 million people over the past three years means a slower recovery, with fewer people contributing to the nation’s economic output, buying products, and paying taxes,” said Andrew Sum, director of the Center for Labor Market Studies. “These missing workers are more likely to become poor, rely on government assistance, and develop mental health issues.”

Translation: 5 million more people are now consuming rather than producing, and most importantly, they are increasingly likely to require money from a government that already spends nearly a trillion more than it brings in.

Record breaking unemployment

Despite the rosy reporting on unemployment, the reality is that for one important demographic in the U.S., unemployment is at an all-time high.

For those between the ages of 18 and 24, the unemployment rate is at a staggering 46 percent according to a recent report by the Pew Center. That equals the highest unemployment rate for this demographic since reporting began in 1948.

As a result, “Among adults ages 18 to 34, more than a third say they have gone back to school in the face of a tough labor market, the Pew study notes. Nearly a quarter have taken an unpaid job or moved back in with parents. One in five have put off having a child or getting married due to economic concerns,” according to The Huffington Post.

Translation: Our kids are not growing up, not producing, and not ready to take over for their aging parents or care for them when they retire.

Heading home

According to The Atlantic Monthly, the same Pew Center report cited above indicates that 34 percent of those between the ages of 25 to 29 have moved back in with their parents in the last year.

With the previously mentioned historic unemployment rates, “Add college loans and entitlement programs like Social Security that transfer wealth from the young to old to young people's woes, and you see why twenty-somethings in 2012 are fleeing back to their childhood bedrooms.”

Translation: Rather than preparing the next generation to support our country, we’re taking their wealth, their jobs, and instead we are still taking care of them.

Don’t drink the Kool-Aid

In an election year, the rhetoric regarding the “improving” and “recovering” economy will only heat up. It could be tempting to drink the Kool-Aid and pretend that everything will be all right. But I’m afraid that tough times are still ahead. Our spending is still out of control, housing is still weak and getting weaker, the Fed is still printing money, we’re still facing an avalanche of debt from unfunded liabilities in Social Security and Medicare, many people still don’t have a job, or have enough money to retire.

Those with a financial education will prosper.

Given all this, it might be easy to give up hope. My encouragement to you is, don’t. You are uniquely positioned to prosper in the rough times ahead. While many people are content to put their heads in the sand, you have an opportunity to face the realities of our economy head on and gain the knowledge required to act intelligently and accordingly. Knowledge is power, even if it’s depressing knowledge.

In the end, every storm is met by two kinds of people—those who have accepted the fact that a storm is coming and have prepared, and those who ignored the warnings and are taken by surprise.

A financial storm is on the horizon. How are you preparing?

Provide your comments below and for more information, check out our financial education resources here.

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