The unemployment rate surged to 8.1 percent, from 7.6 percent in January, its highest level in a quarter-century. In key industries — manufacturing, financial services and retail — layoffs have accelerated so quickly in recent months as to suggest that many companies are abandoning whole areas of business.
“These jobs aren’t coming back,” said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. “A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”
Now, the real question is a) Why? and; b) Is this really as bad a thing as it sounds?/What new industry or jobs will replace the ones that were lost? The short answer:
This dynamic has proved true in past recessions as well, with fading industries pushed to the brink during downturns before others emerged to create jobs when economic growth inevitably resumed.
- Startup-friendly tax structures and laws. So, for example, the US (in my case, New York) should abolish the stupid "publication requirement," whereby newly formed Corporations and Limited Liability Companies are required to publish the fact of their formation in two local newspapers. Cost for me in New York City: $1700-2500. One-word: INSANE. In 1975, the law might have made sense. But this 2009, for Christ sakes!! Let us publish it on the internet. Now, this might sound like a stupid complaint, but you gotta remember, this is required of startup companies who probably have no money and no income. When every penny counts, it's a real issue. The broader point here is that the govt should make it as easy as possible for you to start a business because the truth is that the odds are already heavily stacked against you.
- Economic and Financial Education for the Masses. As some of you may or may not be aware, I graduated from Columbia University, an Ivy League school in New York City. Now, I bring this up not pat myself on the back but to share with you an important lesson I learned while I was there: Rich kids are taught how to handle their finances a lot better than normal people, and it gives them an unfair advantage as they go forward in life. Most people learn the hard way, and the price of a hard way education is typically a ruined credit score. This disparity should not exist. Every American should be taught to understand the basics of this capitalist system we're in. Every teenager should be taught how the credit system works. Every American teenager should be taught the relative $$$ value of education in actual dollar figures: High School vs. College vs. Grad School. Now, knowledge alone will not prevent people from fucking up, but it will improve their odds of success, and in life, I think that's all we can ask for. But that's just me.