As the Dow hit 17,000 and unemployment numbers hit the pre-recession level of 6.1 percent, many politicians celebrate a rising economy. President Obama led us to a new boom, but that 6.1 is not the real story.
In addition to the 6.1 percent of the labor force not currently working, 3 percent more are working part-time because they cannot find full-time work; another 2.7 percent are not looking for work but would like to have a job. That brings real underemployment number to 11.8. Labor force participation dropped to a 36-year low of 62.8 percent in May, numbers not seen since the midst of Jimmy Carter’s malaise. One in eight men between the ages of 25 to 55 are not participating in the labor force.
While pundits can blame on a number of reasons including laziness, early retirement by Boomers, or just a bad economy still reeling from the recession, a large part of the problem is that millions of Americans are unemployable. They do not have the skills the workplaces of 2014 need.
Unfortunately, the problem for low-skilled workers looks to be only getting worse. As the workers protest across the country this year for higher wages from fast food restaurants, McDonalds and White Castle are looking to automation.
A few weeks ago in Manhattan, McDonald’s employees and other protesters protestors lined up in front of the iconic Times Square McDonalds to demand higher wages. The picketers demanded fifteen dollars an hour, a living wage for low-skilled workers, but the tide of history is against them.
Low-skilled workers are facing a crisis. Technological advances increasingly automate tasks, making many jobs irrelevant. The competition for the remaining employment opportunities has increased due to the massive influx of unskilled immigration, both legal and illegal, undercutting salaries. Americans watching the protests in front of McDonalds’ across the country and illegal immigrants crossing the border in the tens of thousands are witnessing the birth of a permanent underclass.
In December, White Castle put a new touch-screen ordering system in one of their Columbus, Ohio locations. Similarly, McDonalds put iPads at every table of a Niguel, California restaurant; customers can now order their food from their table.
Adding fuel to the fire is the current broken immigration system, and the recent influx of tens of thousands of children across the Mexican-American border, which has shown Americans the reality of a three-decade long problem; the border is so porous that even a fifth-grader can cross it.