What the Unemployment Statistics Will Not Show

One of the traditional measures of economic health is the unemployment statistics. And with unemployment statistics rising sharply, clearly the economy is in trouble.

But, I believe the real story lies behind the reported unemployment levels. I am seeing an acceleration of corporations and professional service firms exiting older workers who do not truly distinguish themselves with the value they contribute through their employment. What is shocking is the rate of acceleration of this trend and the reduction in the targeted ages.

In the last significant downturn (in the early 90’s), corporations exited their marginal contributors who were in late 50’s and early 60’s. Given what I believe will be the magnitude and duration of this downturn, I fully expect to see the “targeted” age group drop even more. Anyone who is just filling a job is vulnerable, but anyone over 50 will find themselves in the crosshairs. Saddest of all, the prospects for re-employment at a similar job level will likely be non-existent.

Faced with the prospects of claiming unemployment, or getting a (relatively) menial temporary job, most in this situation will opt for the latter. That is why the unemployment statistics will not tell the entire story. And, that is why road warriors like me will...for example... experience that the person checking us into the hotel is a former white collar worker, previously making a salary many times higher than what he, or she, is making as a clerk.

Because my clients count on me to understand the dynamics of the markets in which they compete, I am quasi-social scientist…forever looking to learn what is happening at every level of the economy. In recent times, I have discovered that the people checking me in at hotels have shifted.

Would you believe that I have been checked-in by a former retail VP, former Big 4 audit partner (that one really hit close to home with my being a former senior partner of one of the major accounting firms), a former long time management consultant, and even, recently, a former lawyer. All of these examples are “employed” but at jobs paying a fraction of what they once earned. And with only a fraction of the vocational satisfaction. OUCH!!!!!!!!!!!!!

I just returned from South Florida, where the economy is in a world of hurt. As I was studying the legal market for a client, it became very apparent that many other law firms in the area are beginning to experience severe pain. I fully expect a blood bath of layoffs from competitors, shortly after the holiday season. That alone is sad news. But what about the lawyer who has de minimis business and is terminated at, say, 52. Where will he or she find a job? Sure they can hang out their shingle as a sole practitioner. But, if they couldn’t generate business with the resources of a prestigious firm, how much business will they generate as a solo. Very, very sobering.

Are you creating real value for your employer? Could a younger person do almost as good a job at a fraction of the cost to the employer? If you are counting on the patina of your years of experience, is your experience really that relevant in a rapidly changing world? Please, please don't fool yourself with your answers to these questions.