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Employment Is Improving?  image

Employment Is Improving?

Here’s the Real Financial Picture

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.

Leave A Comment jump to leave a comment
2/17/2012 5:09:06 AM
Thank you.This is the most important thing that people should always aware of future,may this be make our future contain almost no problems.
Saturday, February 18, 2012
The numbers have been wrong since the early 1980's. It has created a euphoria, which is seeping into the stock market. Good article here on the current bullish sentiment in the market:
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2/14/2012 1:18:02 PM
This article sounds alot like what I read yesterday
Tuesday, February 14, 2012
wouuu!!!!! cruel realidad!.
Tuesday, February 14, 2012
Dear Robert you are right! Here in Italy the situation is awful! We are going to close all our restaurants and business! There is a problem in the system! I don't know what will happen in the next six months! I'm studying your books but it is really very difficult to fing good business in this moment in Italy. Thank you for your opinions!! P.s. if you want to eat a good pizza come and visit me in Gorizia (Italy)
Jason Rich Dad Advisor Carruthers
Tuesday, February 14, 2012
Thanks for this great article.
Wednesday, February 15, 2012
Hi Paolo!! I can really Understand what you are Going Through and I know What it feels like seeing your own business Closing Down, Having Gone Through The Same. I am From India, Had My Two factories Manufacturing Plastic Items and Selling it to MNC's, But due to Unhealthy competition and Useless Regulations I Closed my Traditional Business But as Fate had it I came Across Robert's Amazing Book "The Business Of 21st Century". And Now Am Building This New Business Globally.. and Looking for People WHo have Intensity, Passion, Determination and willingness to Fail and Fall.. If you are Ready to Learn, Improve, Develop Knowledge and more Knowledge.. I think I can offer you some thing which is Extremely Rewarding... For your Generations to Come.. We will Train, Help and Support to Build The Most Powerful Asset you can Think of... You Can Reach me at Mobile :- +917208157704 ( We can Use Whats App as well ) E-mail :- Facebook Fan Page :- Always In-Service Yogesh Mansharamani Being Inspired from it I am looking to E
Tuesday, February 14, 2012
That's why it is so important for people to have multiple streams of income. Robert has some great classes that tell people how to do that. I have taken some. Another way that I have found is with MLM> Check
Joshua Gamen
Tuesday, February 14, 2012
Take the lemons and make lemonade! Of course you need a solid financial education to do that! Stay strong and keep getting better!
Friday, February 17, 2012
And check the datas always to remain aware.
Quoc Ty
2/14/2012 6:10:53 PM
A lot of people are umemployed they don't have money to buy house, I will buy houses and for rent.
2/14/2012 7:50:00 PM
I am a nigerian . I am currently reading one of ur books-Guide to investing. I want you to advise me on how i can get a financial advisor. I am considering visiting my bank manager or wot shud i do?
2/14/2012 10:15:38 PM
Hi Robert, What will be the impact on unemployment if Obama's speech regading the new "Buffet" tax laws on the rich is actioned?
2/15/2012 11:41:46 PM
Hi Robert, Thank you for your good article.I have a request for you, could you please send me a copy of your book titled Rich dad, poor dad,I saw it at distance my neighbor in a car was reading but I could not access it.
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Wow! I'm preparing for the financial storm and also going to help more people prepare. Thanks Robert.
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