When will the economy get better?

June 23, 2011 11:27 AM

When will the economy get better?

I graduated from college in 2007. Finding a job was difficult and I ended up having to settle. I have since struggled unsuccessfully with finding a new job. The search has been difficult due to decreased demand for staff in my industry as well as many people in my industry that were laid off and are looking for a new job.

For my generation, this weak economy is all we know. I feel like since 2007, people have kept saying every year that the economy will recover in 12 to 24 months. Well I'm still waiting, people.

I'm not going to define "better," as the term is subjective and many people would argue that it is impossible to recover to how the economy was prior to the most recent recession due to a number of structural factors. Key aspects of betterness include renewed confidence, job market recovery, etc.

posted by prunes to Work & Money (24 answers total)

For my generation, this weak economy is all we know.

If you graduated college in '07, weren't you born in '85 or so?
posted by box at 11:37 AM on June 23, 2011

prunes said: "Finding a job was difficult and I ended up having to settle."

Welcome to adulthood. This is how it works for a lot of people, a lot of the time. And it's how it's going to work for a long time to come. Lots of things are fucked right now and it's going to take several years at least for those things to become un-fucked. Especially if you're comparing now to 5 years ago, as those times are on opposite ends of the spectrum. All you can do is make the best of a bad situation, because a mess of this size isn't going to be cleaned up quickly.
posted by Solomon at 11:39 AM on June 23, 2011 [4 favorites]

box, whether or not prunes was (I was, "or so"), you don't really think about the economy 'til you're out of college and trying to find a job. So, I'm with prunes -- the weak economy is all I've ever known, because I really didn't "know" until post-college.
posted by AmandaA at 11:39 AM on June 23, 2011

There is no way anyone can answer this question with certainty (except may Lew Rockwell and his daily anthology of doom and gloom). Better to be asking yourself what you can be doing to improve your economy (situation). Isn't that all you really have the slightest control over anyway?
posted by dukes909 at 11:40 AM on June 23, 2011 [2 favorites]

I think this like asking "How long is a piece of string?"

I think the best thing you can do is start doing some reading, but I don't think you're going to get a cut-and-dried answer.
posted by Specklet at 11:43 AM on June 23, 2011

Best answer: It's a good question and "the experts" who mostly missed the downturn simply have no idea.

The current Fed projections have a high unemployment rate (at least over 8%) continuing for many years (2014 or longer).

Honestly this is a good time to consider moving to Asia for awhile, where there are jobs for young graduates. It would be an adventure, and I know friends who didn't think they could hack it nevertheless manage to enjoy it for awhile.

It's really unfortunate that the US doesn't want to hire its young and talented citizens. This is essentially a political problem. The country is not broke, we are by far the richest country in the world. The wealth is simply concentrated at the top 2% and they're paying the lowest tax rate since WWII.

Meanwhile the US government is investing a smaller % of its GDP on public infrastructure than at any time since WWII. During recessions, a very standard theory in economics (Keynesianism) has it that the government should be massively hiring people, restarting the economy, and generating jobs.

My point is that if you choose to stay here I think the underemployed and unemployed in this country should at least get informed and organized and help influence the US's politics in a positive way.

Rich people like everyone talking about the deficit and government spending cuts b/c it means no one will come after their money even though it's sitting on the sidelines. Maybe become a little political with some of the time that you're not devoting to a career.
posted by airing nerdy laundry at 11:46 AM on June 23, 2011 [30 favorites]

So, I was supposed to graduate college in 2006, which means we are roughly the same age. We don't know anything but bubbles. We grew up in the tech/dotcom/etc bubble when everyone could get a job doing something with a tech startup. That ended with everyone ripping copper wire out of the walls. Hot on the heels of that came the real estate/finance bubble and job as mortgage brokers, real estate agents and construction were plentiful. Now that's over too. "Better" as you know it is "unnaturally good." Save a new bubble -- likely, but nothing to put money down on -- things aren't going back to that.
posted by griphus at 11:46 AM on June 23, 2011

I miswrote earlier. The Fed currently projects that unemployment will be 7-7.5% through 2013.

But they've been consistently revising unemployment rates up and GDP down for a few months now. People who have a decent record of recent economic forecasting - Paul Krugman, Dean Baker, Brad DeLong, etc. - often speak of a 'lost decade' as a robust possibility.

It's good to be realistic. I also think it's good not to think of this as some naturally occurring phenomena about which nothing can be done.

The people in charge are screwing this up, and in the past that's meant changing society so people can have jobs.

My view is we've been cutting taxes for wealthy individuals and business for long enough now to know that isn't a meaningful solution. So anyone saying it isn't actually advocating for your interests.
posted by airing nerdy laundry at 12:05 PM on June 23, 2011 [3 favorites]

I posted this on Facebook yesterday:

http://motherjones.com/politics/2011/06/speed-up-american-workers-long-hours

In a nutshell, Americans are working themselves out of jobs. US productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute. To repeat: Up. Twenty-two. Percent.
posted by cyndigo at 12:21 PM on June 23, 2011 [4 favorites]

S&P recently predicted that real estate prices will re-gain there 2006 numbers in 2025.

This economic dissater is real estate driven. So many Americans are up-side down in their mortgage. In the county where I live in FLA, over 50% of all mortgages are up-side down.

For those people, things will not be right until the real estate market is back to the price they paid for their home and their mortgage, until they are right side up on their debt - which S&P predicts will be 2025.

The reality is that America is moving towards a Plebian/Patrician type system. There will be ultra-rich and poor. The America where a middle class could live comfortably and happily is gone.

If you are just entering the job market right now, and you are not among the ultra-rich - well, then, there will be no retirement, no middle class white picket fence for you. Sorry.
posted by Flood at 12:22 PM on June 23, 2011

I agree with airing nerdy laundry.

The interesting thing about economics is it's not like other areas of politics. "Should we have invaded Iraq?" has a pretty clear answer to me, but it's a moral question about which there can be different opinions, depending on your values.

But with economics, it's pretty much been factually proven what works and what doesn't. A larger stimulus would have meant a better recovery by now, that's almost certain. However Obama is adhering to more GOP-style policies of low taxes and blather about debt when it isn't the most important thing right now.

I think your (our) best hope is that things actually get worse shot-term, forcing a change of course. Right now things are just ok enough to make politicians to keep going as they are. The other possibility is that Obama wins a second term, and no longer worried about re-election, undergoes a re-liberalization and does the right things.
posted by drjimmy11 at 12:24 PM on June 23, 2011

You speak vaguely about what industry you're in. That's a reasonable thing to do, but unfortunately it makes it harder to provide even the vague, not-really-helpful answers that we can provide.

For example, I know a lot of people with software-development and related skillsets. Most of us have found the recent economic slump to be kind of problematic, but by no means apocalyptic. I know several people who've been laid off, but nearly all found new work at a roughly comparable level to their old jobs very quickly. The lawyers, by contrast, are mostly in a state of permanent worry, and the teachers - being young, and at the bottom of the seniority ladder - are all either being laid off or anticipating layoffs. I don't know anyone in the construction biz but that industry is double-triple-fucked.

So "When will things get better?" is a combination of "probably not for a while," but depending on what your field is, that might get modified to "probably soon-ish" or "possibly never."
posted by Tomorrowful at 12:31 PM on June 23, 2011 [1 favorite]

On one level, there are some good answers here. Certain things are undoubtedly true -- e.g., real estate can't come back until the foreclosures clear.

But the economy is vastly complicated, and no one can predict all the factors that enter into it. So answring this question isn't difficult -- it's impossible.

If you could predict the climb, you could have predicted the crash. Either way, you you could invest accordingly and be rich. Many people do invest like that -- and some get rich, and some go broke. No one can predict the future except by luck.
posted by LonnieK at 12:40 PM on June 23, 2011

When we raise taxes. I'm being completely serious.
posted by breakin' the law at 12:50 PM on June 23, 2011 [6 favorites]

Best answer: wow, there are a lot of dubious things being written in this thread. people, this isn't chatfilter about how great / bad group x is. my favorite comment was that the money of the rich is "sitting on the sidelines". do you think the rich just stuff it all under their mattresses? no matter who you are, if you stick your money in a bank or any other financial institution, it's probably being invested. somewhere. that's how banks make money. the government can definitely take more of anyone's money and invest it in its own priorities, rightly or wrongly, but that's just a movement of capital from one area (country, industry, group of people) to another, so generally you get less of that and more of what the government wants.

ugh, anyway, nobody knows when things will get better, sorry. it's true that the massive decrease in real estate values is a real problem - the home is most Americans' most valuable asset, and when it decreases in value they stop consuming as much since they have less money. reduced consumption = reduced demand for goods and services. which means less demand for jobs that produce those goods and services.

and there's a lot of uncertainty, as well, since we know that even relatively small shocks can lead to a domino effect. so when Greece gets in trouble again (which it will), and has to be bailed out, again, people will worry, again, about countries like Spain and Italy that are too big to be bailed out. and then all of their lenders...

the current model of governance - lots of services, not enough tax revenue to pay for them - is not sustainable, and we are eventually going to have to deal with that reality. whether that means cuts in spending or tax increases will obviously have a big impact on national economies, and I don't think anybody has any idea how (or when) that will be resolved. but that is what it will take, barring another bubble, which is also possible. we have to pay back the money that our parents borrowed, and unfortunately it wasn't all invested that wisely.

and of course, on the employment thing, specifically - there isn't as much hiring going on because hiring isn't productive right now, as was pointed out upthread. if you run a business, you will only hire an employee if they produce some value over and above what you pay them, that you can then use to pay your investors, or yourself. right now it makes a lot more sense for a businessperson to invest in more technology, and we're well into an age where a lot of manufacturing jobs are headed overseas, possibly never to return.

things will get better, but it will take a while. a lot of it does have to do with how the economic debates of the next few years play out. even more of it depends on what industry you're in, so you may want to look into making a change there if you're worried. software engineers are still in huge demand... buggy drivers not so much.
posted by thumpasor at 1:36 PM on June 23, 2011 [1 favorite]

The core problem with the US economy is that the US isn't producing things people want to buy. People who were paying attention have been complaining about the "trade deficit" for a long time. It's like any business: it can't be run like "Okay we're not producing, but we have lots of credit, so who cares? We'll just import what we need."

There's no short-term fix for that. The government has to help stimulate industries that will be competitive in future, and tax people who can afford to pay for that stimulus. Keynesianism, and redistribution. But it takes decades, and actually doing it takes political will.
posted by Net Prophet at 1:41 PM on June 23, 2011

Finding a job was difficult and I ended up having to settle

This IS better. Try graduating in 2002 when settling meant not having a job in your field at all if you were in engineering.
posted by rr at 3:03 PM on June 23, 2011

Don't know what your industry is, but there are worse things you could try just now than entrepreneurship. To be realistic, it probably won't work out, but you will learn a lot and it might just impress the hiring folks when things do get better.
posted by IndigoJones at 6:07 PM on June 23, 2011

Response by poster: Unbeknownst to me when I posted this question, NPR's Planet Money podcast actually discussed this very question on its most episode. Check it out.
posted by prunes at 8:17 PM on June 23, 2011 [1 favorite]

For my generation, this weak economy is all we know.

I hear your pain. But keep in mind that all generations--assuming an average lifetime in developed nations of 80-some years--will know, and be forced to reckon with, a weak economy. My grandparents were alive during the Great Depression. Their parents lived through the Panic of 1873. Bottom line: the economy is cyclical, and it's inevitable that you'll experience a few downturns and at least one "Great Recession"-level event before you die.

People in your generation are lucky in one respect: if (and it's a big if, I know) the recession is a single "lost decade," the boom years will hit in 2020, when you're a thirtysomething. You'll have mobility in the job market. You'll have plenty of time to make money and save for retirement. Many people who turned 60 this year, on the other hand, are in a jam, and rightfully so. If they're unemployed, their options are limited--Starbucks doesn't hire sextigenarians. If they haven't saved for retirement, they're facing a 401K plan with limited growth.

The online papers are filled with stories of oldsters toughing it out. You're toughing it out too, but at least you're not one of them.
posted by Gordion Knott at 3:01 AM on June 24, 2011 [1 favorite]

The economy IS better, if you are willing to:
1. Live within your means
2. Eliminate debt
3. Move nationally or internationally
4. Acquire skills that are currently "in-demand"
posted by blue_beetle at 5:56 AM on June 24, 2011

you don't really think about the economy 'til you're out of college and trying to find a job.

That luxury is not available to everyone.
posted by box at 6:02 AM on June 24, 2011

I would offer that the last 50-100 years of prosperity that the world has experienced is mostly a fluke which is now coming to an end. World economies have been floating on a sea of cheap oil and other energy resources which are the primary resources that growth in just about all other sectors rely on, and increasingly there have been supply constraints. Some part of me even believes that supply constraints were the main cause behind the start of this recession (and I'm not the only one who thinks so). Ever heard of peak oil? Ever read any E.F. Schumacher?

I might get dismissed as a doomer, but the way I see things unfolding is not pretty at all. The slow decline of world economies as they wean themselves off of industrial ways of doing things is not going to be a happy time. So no, I don't see a global recovery at all, but only global decline for quite some time. However, the decline will be geographically diverse. Some areas will have it harder than average and some will have it better than average. It will also be chronologically diverse. Some times will be better than others.

Specifically? It's anyone's guess how it will all play out. I try to avoid making too many predictions, although I'm starting to see unemployment as the industrial economy's way of saying "you're getting kicked out of me for now, better come up with a plan in the next 99 weeks". Unemployed and economic non-persons will be a category that will see growth proportionate to the shrinking of the industrial economy. At some point the government will have to do something, but I have no idea what it will do, or when it will act.

Sensible advice ranges from "keep a job, any job" to "learn skills that everyone used to know but don't anymore due to industrial convenience" to "learn permaculture". I would also personally recommend adopting a stoic worldview, as it has helped me put a lot of this into perspective.

I sincerely hope I'm being naive and that everything will just work out ok, but I doubt it a teeny bit more every day. We're about the same age so all I can offer you at this point is: don't be so down on yourself for not being able to find a job, appreciate all that you have for now (and forever), treasure your relationships with those you love, and good luck.
posted by symbollocks at 6:28 AM on June 24, 2011 [3 favorites]

The economy is always changing it's demands for workers, so you will have to adapt to whatever people want to pay you to do. Plain and simple....there is no guaranteed path to take that will work. Do whatever it is to get you to where you want to be to enjoy life and be sure to enjoy it to the fullest. If you wait around for some perfect opportunity you will probably miss out on a lot of great things.
posted by mikesrex at 8:47 PM on June 25, 2011