Cast Away - Tales of the Young, Educated, and Unemployed

This is my first attempt at a diary here, and I want to dedicate it to a topic that is both deeply personal and painful: unemployment. It has been a long seven-day wait for posting privileges so I can finally put my feelings into writing. My wait on unemployment, now at eight months, has regrettably been far longer.

I realize that writing about my own employment situation carries a sense of narcissism. After all, 15% of all Daily Kos respondents recently indicated that they too are unemployed, which closely matches the national true (U-6) unemployment rate of 17%. I know far too many of you are in the same boat, so please forgive me when I feel compelled to share personal details.

It is my thesis, however, that elements from my own unemployment experience are germane to the larger unemployment crisis in this country, and that the national dialogue on many critical elements of the crisis remains woefully insufficient, despite the election of President Obama to the White House.

Prologue:

In 2000, I saw the movie Cast Away in New York City. When we were filing out, an old lady in front of me kept repeating to her beleaguered husband: "See! It's 'Cast Away', not 'Castaway'. It's two words. Like he's been cast away. Get it? Honey, do you see it? Honey...?" This exchange would come back to haunt a major life trauma almost a decade later.

As the days turned to weeks (and the weeks turned to months) following my termination, I could barely help but feel like I had been discarded and left for dead by corporate America. Fortunately, I have my friends and family with me, as opposed to Tom Hanks' character in the movie.

Placing Blame:

It is common for people on unemployment to blame themselves, to wonder if they could have made better decisions in their professional career to avoid such catastrophe. I know I do. You see, I'm an environmental engineer. And to make matters worse, I have a Ph.D. in engineering. That last degree was definitely my fault.

I understand that I wrongly believed capitalism to be the rising tide that lifts all boats. I understand that I played right into the concept of degree inflation by seeking additional education to advance my career. I understand and acknowledge the warning signs I willfully ignored. And I understand that I am one of many people facing a similar crisis, and the vast majority of people are worse off - I in no way intend to claim that my situation is somehow exceptional.

But as I lay adrift in the sea of unemployment, kept afloat by nothing more than hope and my flimsy raft of weekly unemployment insurance benefits, I began taking a more holistic examination of our national unemployment crisis. Oh, I reserve plenty of traditional criticism for corporate America and our national spending priorities. But I also place a large amount of blame on the American University System, which is surprising to many, and seldom discussed.

1. Spending Priorities:

People are often surprised to learn that such a thing as an unemployed engineer exists, given the powerful Obama Administration promise of green jobs and civil infrastructure improvements. I don't have more recent data, but unemployment amongst engineers rose sharply to 5.5% in the second quarter of 2009. It was still 4% behind the reported (U-3) national unemployment rate of 9.5% for the same quarter, but I expect another sharp increase.

My specialty is environmental engineering, and I am a licensed Professional Engineer (P.E.) in civil engineering. I will fully admit that there were warning signs I ignored for years, culminating in water and water pollution control receiving a (reported) mere 0.5% of the stimulus funds.

The portion of the American Reinvestment and Recovery Act dedicated to public works as a whole was a mere $46.7 billion. According to the American Society for Civil Engineers, roughly $2,200 billion is required to improve the nation's infrastructure. If TARP could be $700 billion, and the Iraq war could be $915 billion to date, when will the nation become serious about investing money in infrastructure that goes directly back into the economy and provides return on investment benefits for generations to come? The recent Oakland Bay Bridge troubles, the I-40 landslide, and the earlier I-35 Minnesota bridge collapse are missed opportunities by President Obama, in my opinion, to truly address this need. That engineering unemployment figure will not come back down until infrastructure spending well above and beyond the American Reinvestment and Recovery Act is realized.

2. Corporate America:

At my last company, a woman was laid off amidst a period of relative high workload. The official word in the office was that she just didn't fit in. That is corporate doublespeak for lying. This woman was a young professional, with about five years of experience. Her field, like mine, was environmental engineering. She even had sought a professional master's degree. The trouble was, the workload shifted on her. She had been working on one type of engineering her entire tenure. That is the only type of project the management was procuring. She was eminently capable of working on the new type of project. I had spoken with her about this. But because she had been assigned only one type of work, it would require a minimal effort to bring her up to speed on the new type of project. Of course, a new hire could be brought in with a bachelor's in engineering, zero experience, and do the same... for less money. And that is exactly what the company decided. A new employee was hired for not that much less (a mere 20%), and once they were reasonably sure the new employee could perform the tasks that would be required of the old employee, they laid her off after five years of service. On the same day she was laid off, I had to coincidentally (yet nonetheless ironically) endure a lunchtime seminar from human resources, where they bemoaned their inability to find and retain qualified employees. A corporations wondering why it cannot find and retain employees is like Joe Lieberman wondering why nobody likes him.

I use the above example as a perfect case of the plague of worker commoditization that has swept through our corporations. Under the principles of commoditization, when everything appears the same and supply is plentiful, one uses cost to make decisions. Of course, these are human beings we are talking about; people with lives and families who depend on their corporation for existence. But it is my opinion that typical corporations have no moral compass -- right and wrong is determined by profit and loss on the bottom line. In the absence of any social responsibility, employees become commodities to be discarded when the market changes.

Back at another firm, it was difficult to recruit and retain decent employees. This hurt productivity. Perhaps it was because management decided to put us in a suburban office park hell out in the middle of nowhere, as far from public transportation as possible and only accessible on undersized, traffic clogged roads? I suggested that a worker training program might help expand the search pool. I was rebuked with claims that they were not, and I quote: "running a charity." The rational for the objection was that once an employee was trained at the company's expense, they could bolt for a better job. The insensitivity of such a remark was astounding.

Traditionally a blight on blue collar workers, commoditization now plagues professionals and white collar workers, thanks in part to the principle of college degree inflation (to be discussed in depth later on). Commoditization is no less damning whether one's collar is blue or white. But is it classist to hypothesize that white collar commoditization poses a greater risk to society because such workers are carrying significantly greater educational debt? Furthermore, even amongst the likes of record unemployment, not seen since the days of Regan, corporations are crying that they cannot find the right people. Of course they can't. Corporations have shirked the responsibility of training workers back to the Universities, who are now doubly tasked with babysitting post-adolescents and creating increasingly specific majors to keep up with the changing job markets.

Despite being left-leaning thanks to a fortuitous upbringing, I will never cease to be amazed at just how engrained the principles of Reganomics were. I was always especially proud of my high performance reviews at the engineering firms for which I once worked. When times were good, I earned a raise or bonus, even though I knew the managers received far more. Through good years and bad, though, I never questioned management compensation practices under the singular false assumption that the rules of capitalism applied to employee and manager alike. With hard work, I too would earn the right to sit in the corner office some day and draw the same compensation package. Capitalism is the rising tide that lifts all boats, right? Never mind the fact that the last company for which I worked was utterly top heavy with underproducing senior management staff focused more on securing their retirements than permitting younger staff to live the same dream. When I was laid off, the company needed to show a profit to its shareholders for the quarter. The easiest way to accomplish this without actually doing any work is to fire people. But that's okay with me because my former CEO needed to make almost $10 million dollars this year.

In Reganomics, don't question CEO compensation packages -- with just a little hard work, you could be that CEO in the future and be entitled to the same reward. In the mean time, I guess you get trickled on. But in no aspect is corporate irresponsibility greater than in executive compensation. The following graph has received a great deal of attention:

Starting in the 1980's, executive pay has exploded from 33 to now, on average, over a hundred (100) times the average worker salary. Words are insufficient to describe how unconscionable such actions are. Executive compensation must be reigned in and directed towards incentives to train and retain employees.

3. The American University System:

Another source of the present unemployment crisis is far less apparent and rarely discussed: the American University System. The Universities will certainly cry foul at such a charge. This isn't armchair criticism, though. In addition to my graduate studies, I served as adjunct faculty at a reasonably well known school during a postdoctoral appointment. I had a front row seat for the orgy of greed that has erupted between universities and corporations.

But first, the cost of a college education has increased at a rate vastly higher than inflation. Why? The following graph has received much attention:

I was fortunate to attend a private Ivy League University between 1993 and 1997. A student presently attending a public University will incur a similar financial debt as I did (about $60,000). By withering the K-12 public education system, college is a virtual necessity for access to higher paying jobs in our society. But unlike the Baby Boomer generation before, attending college now requires young adults to start their life substantially indebted.

We all grew up with Aesop's Fable The Ant and The Grasshopper. The fable is noted for its libertarian message. Yet even amongst left-leaning adults such as myself, that message is readily swallowed when it comes time for college. As the Baby Boomers demonstrated, investment in higher education earns one a higher paying job. But what if no job is waiting at the end of that investment? If an astounding 52.2% of young adults are unemployed, how can their investment in college ever be repaid?

It can't. Aside from job creation, college tuition costs must be brought under control. Otherwise, we are creating a generation of educated, modern-day serfs, indentured to their student loan bearers. I do <u>not</u> agree with forgiving the student loan debt. Such a move simply pushes the financial burden back to the taxpayers while leaving Universities unaccountable for their inflated tuition costs. If the taxpayer must bear a burden, let it be for improving K-12 education to a level where bachelor's degrees may not be so necessary.

Why has the cost of college skyrocketed? There are many reasons, but would one be surprised to learn that many College Presidents now make over $1,000,000 a year? Not if one views Universities as businesses. Perhaps outrageous University "CEO" salaries are a good place to start.

Another, more silent problem is the peddling of worthless degrees. I know. I was in this business. Based on the previously discussed principle of degree inflation, there naturally comes a point where an individual will attempt to distinguish him or herself from their peers through additional education. Corporations and Universities are all too eager to help. The most notorious of the worthless degrees are professional masters programs, typically offered on a part-time or online basis. These programs represent a major profit stream for Universities, as they require little to no overhead. I remember being explicitly lectured by my department chair on how to mitigate course difficulty so as to not ruffle any student, or employer, feathers. Corporations offer perk access to these continuing education programs through partial tuition reimbursement. Of course, this is really no charity at all; such reimbursement has come from the collective paychecks of all employed. The last firm I worked for even offered financial incentives back to employees who completed a masters of engineering program, perpetuating the cycle. Taking a radical approach to revalue college degrees has been suggested by others before me.

Closing:

I feel I should offer some conclusions. People often write at length, but fail to offer any suggestions. Or maybe I should have just made my first diary about cats. It would have been a lot easier.

  1. There must be a national dialogue on corporate social responsibility and executive compensation that directly challenges the engrained principles of Reganomics. Executive compensation rates (with respect to the average worker salary) must be returned to pre-1980 levels. Create windfall and millionaire taxes if necessary
  2. Create a financial benefit for companies to hire and retain employees. I believe I overheard this suggested elsewhere. If companies were paid $5000 to hire and retain an employee for a year, would it make a difference in the unemployment rate? The cost would be $50 billion to put 10 of American's 13.5 million unemployed back to work?
  3. Take aggressive measures to revalue college bachelor's degrees. Start a national dialogue on severing American Universities from the practice of providing corporate training through inappropriately specific majors. Generalize majors and increase academic standards.
  4. Contain the cost of college education, perhaps by increasing the subsidy of public education and letting market forces draw private education down.
  5. Put America back to work with sufficient infrastructure spending close to the $2200 billion suggested by the American Society of Civil Engineers.
This is all easier said than done...

At the end of the day, when I lie awake in bed unable to sleep, worried about how I am going to make ends meet and wondering what will become of my career and my nation, I can only hold on to the shreds of hope offered to me by Our President, Barack Obama, and the Democratic Leadership in the House and Senate. I pray every night for their strength and success. Yet I believe that the national dialogue on unemployment is woefully inadequate. Corporate pay inequity, skyrocketing college tuition costs, and inadequate infrastructure spending must also be addressed. Until such time that they are, I fear we will only coast along out of this crisis with no lessons learned and no real change.

Tags: civil infrastructure, Executive Compensation, higher education, unemployment (all tags)

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