. . . following up on information provided by former student Douglas Himes at the Bureau of Labor Statistics (BLS), my sidekick Chris Matgouranis showed me the table reproduced below . . . Over 317,000 waiters and waitresses have college degrees (over 8,000 of them have doctoral or professional degrees), along with over 80,000 bartenders, and over 18,000 parking lot attendants. All told, some 17,000,000 Americans with college degrees are doing jobs that the BLS says require less than the skill levels associated with a bachelor’s degree.
A few days later, CBS’s 60-Minutes had a segment on unemployed and underemployed people with Ph.D.s and Master’s degrees. Much of the segment was filmed in Silicon Valley. The unemployed there had been laid off from high paying jobs, and had exhausted their savings during their unsuccessful job searches.
The segment started with the statement:
The economic jam we’re in has topped even the Great Depression in one respect: never have we had a recession this deep with a recovery this flat. Unemployment has been at nine and a half percent or above for 14 months.
Sounds a bit bleak. However, later in the segment, after he had talked with a group of unemployed people that included those with Ph.D.s and Master’s degrees in technical and scientific fields, Scott Pelley stated (with emphasis added):
These folks aren’t that unusual: today, nearly 20 percent of the unemployed in America have college degrees. Silicon Valley lost its jobs in construction, manufacturing and in high-tech engineering that went overseas. San Jose looks the same, but it shrank by 75,000 jobs. Many buildings there stand empty. The national unemployment rate of about nine and a half percent sounds incredibly high and of course it is. But it doesn’t nearly capture the depth of the trouble. It doesn’t count the people who’ve seen their hours cut to part time. It doesn’t count the people who have quit looking for work. If you add all of that together, the unemployed and the underemployed, it’s not nine and a half percent, it’s 17 percent; and in California it’s 22 percent. And what makes it so much worse is that, nationwide, one third of the unemployed have been out of work more than a year. That hasn’t happened since the Depression.
In today’s Los Angeles Times, W.J. Hennigan reported:
In another blow to Southern California’s defense industry, aerospace giant Northrop Grumman Corp. said it is cutting 500 jobs in its aerospace division in anticipation of a slowdown in Pentagon spending. . . . This is the second time in less than a year that Northrop’s operations in Southern California — home to the vast majority of the 23,000 employees in its aerospace division — has experienced job losses. The news comes the same week Northrop moved its corporate headquarters from Century City to Falls Church, Va., sending 300 of its employees and high-ranking executives to the East Coast in the process.
Thus, the ranks of the highly skilled unemployed continue to grow. And keep in mind that the skills involved are of a highly technical nature. We’re not talking about people with degrees in Italian Renaissance poetry here – as interesting as that subject may be. But actual rocket scientists and aeronautical and electrical engineers. And from the trenches: I have had bankruptcy clients with Ph.D.s and Master’s degrees, and in fact just did a bankruptcy for someone with a pharmacy Ph.D.
Also in today’s Los Angeles Times, Don Lee observed (with emphasis added):
The likelihood of another recession has risen sharply since spring amid signs of deteriorating employment, manufacturing and business and consumer confidence — accompanied by wild swings on Wall Street. Many analysts see at least a 1 in 3 chance of a fallback into outright economic decline in the next six months or so. U.S. gross domestic product in the first half of this year is now seen as having grown by even less than the tiny 0.8% rate previously estimated. A negative GDP rate, which measures the change in goods and services produced, would be one sign that the nation is in recession. Another sign would be declining employment. GDP expanded 3% in 2010, but the size of the U.S. economy still hasn’t caught up to where it was at the fourth quarter of 2007 when the Great Recession hit. And total payroll employment remains nearly 7 million jobs shy of where it was at the end of 2007.
Finally, Jeffry Bartash, of the Wall Street Journal’s MarketWatch, reported:
New applications for U.S. unemployment compensation rose 5,000 to 417,000, the Labor Department said Thursday. Initial claims from two weeks ago were revised up to 412,000 from an original reading of 408,000. Weekly jobless claims continue to hover above the 400,000 level as they have done for most of the year, reflecting little improvement in a weak U.S. labor market. The unemployment rate is stuck around 9%, or an even higher 16% when including people who are forced to work part-time or have stopped looking for a job. . . A total of 7.29 million people received some kind of state or federal benefit in the week of Aug[ust] . . .
It’s worth emphasizing that the 412,000 represents new, not total, jobless claims. The total receiving benefits is 7.29 million.
As skilled jobs continue to be shipped overseas, I expect that the unemployed and underemployed population will swell even further. And as these people deplete their savings and 401(k)s, they will need to file for bankruptcy protection.
Given the potential pitfalls associated with bankruptcy, some pre-bankruptcy planning may be in order for these folks. This can include debt and income aging if necessary, and appropriate asset protection steps.