As the reality of our economic situation sinks in, some implications will seem a bit strange. A Depression (or a Depression like situation) is marked by the loss of jobs, and we can reasonably expect higher unemployment. Unlike the last Depression, however, people have a lot riding on the bennies they get through employment. The implications will become vast before this is all over.
The most obvious benefit most people get through employment is health care. Anticipation of higher unemployment is one of the main reasons I listed the Health care Crisis in the Five Crises that will have to be dealt with immediately. There are more than 90 million people uninsured in the US, or about 30% of the population. This number will continue to grow as jobs become scarce.
There are many groups and advocates that understand the problem with health care. Some even understand the importance of losing other forms of insurance such as life insurance policies and additions to retirement plans. These are all on the table and will almost certainly be considered.
What hasn’t been talked about as much is the need for nearly continuous education in a world where skills have to be updated to meet ever changing technologies. The Department of Education estimates that about 16 million Americans are in vocational education at any given time, plus another 12 million are working on more traditional degrees while they work. Out of a total working population of about 137 million, that’s 20% of all workers. If you assume they get some kind of certification or degree in 4 years, it also suggests that every 20 years workers are getting some kind of retraining.
Much of this is paid for by employers, at least in the professional class. The idea is that it’s an investment in their employees not too different from an investment in equipment. Like health insurance, however, the problem is that the consumer of the product is different than the institution paying the bills, meaning that without traditional constraints on demand the market will consume more than it might otherwise. That’s why a lot of people are working on that extra degree in order to keep ahead of trends that require more and more education all the time.
However, this is something that may suffer a steep decline if the employment picture starts to change rapidly. What might replace it? I have no idea It’s entirely possible that people will find that they don’t need the education they thought they did all along. It’s more likely that education attainment will be used to separate the class of people with high paying jobs from those who do not.
Whatever the case, the vast educational complex that has been built up to deal with the 28 million or so working people who are in school is due to have a more difficult time in the future. It is also possible that the $1.2 billion that states pony up each year to subsidize it may start to see a substantial Federal match if this is deemed to be a necessary part of our economy. If this happens, it will be just another part of the process by which traditional benefits associated with employment become part of a government system.
What is important is that the unwinding of the system we’ve enjoyed is inevitable once a serious employment crisis hits. How this will all go down is still an open question.