Here are few more fault lines to consider when the next big economic quake rips off with the commencement of Wave 3 down in the markets.
One ugly point of contention will be access to what jobs are left available in a contracting economy. On the one hand, here is how the Baby Boom Generation will paint it:
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
In June 2007, German automaker BMW was faced with an aging work force and declining productivity at its factory in Dingolfing, Germany. Older workers tended to call in sick for longer stretches, and they had to work harder to keep up with output demands.
The company responded with an innovative experiment that has been hailed as a prototype for how to keep an aging work force both happy and productive. As written up in a case study in the Harvard Business Review, BMW put a team of older workers (average age 47) on a pilot line, and let them make whatever changes they needed to keep productivity high...
I totally buy in that many older workers have very valuable skills and their knowledge can significantly contribute to a company's success. That said, here is a chart of the unemployment rate for those aged 16 to 24 from 2000 to 2010, you know the ones learning the basic job skills and laying the foundation for future careers:
Enjoy thinking about the social ramifications of that chart, especially if that rate doubles yet again or gets worse. And one can imagine that since Baby Boomers are a massive voting block that "Age Bias" legislation will be strengthened in the coming years, strengthening a trend of oldsters staying in the workplace far longer than previous generations because their nest eggs have been shredded. Fewer jobs to go around and the existing jobs won't see the rotation out of older workers that has been seen in the past.
Pile that on top of a student debt load that the Baby Boomers never had to deal with:How Debt Can Destroy a Budding Relationship
By Ron Lieber, New York Times
Nobody likes unpleasant surprises, but when Allison Brooke Eastman’s fiancé found out four months ago just how high her student loan debt was, he had a particularly strong reaction: he broke off the engagement within three days...
The propaganda that students and parents have been mislead with about the value of a college education versus the debt needed to obtain said credentials has lead countless millions into a trap that will spring shut once the true nature of credit deflation makes itself felt.
That my friends is the making of a generational storm.
A Silver Lining?
There might be a silver lining in all this. The younger cohorts might have to fall back on entrepreneurship and creative thinking just to survive. A new wave of small co-ops and family corporations might be one way to rebuild the foundation of wealth in America. I don't imagine it will be easy to do in the current restrictive tax and regulation environment, but let's hope the energy gets channeled to productive pursuits and not anger and rage at the oldsters out there...