The U.S. Economy A Different Prospective: The “Sub-Economy” – The underutilized work force

By Paul A. Brooks
PMB Ventures Founder
This blog examines the US economy from a different prospective.
The intent is to analyze the impact the underutilized work force has on the social and economic wealth of the American society.
We define this work force to consists of individuals compel to take jobs below their skill and or educational levels, due to lay offs, company closers, down sizing, and disenchanted individuals who joint the ranks of the chronically unemployed.

With professional, manufacturing and high skilled jobs being out sourced and replaced with lower paying service industry jobs, the U.S. economy, is creating a work force under siege. In essence, it is continually generating a social economic divide, with a shrinking middle class, and increasing the ranks of the lower end of the economic middle class. This in turn, is adversely reducing consumer spending and consumption levels whilst lowering the quality of life for those families. The effects can be seen in increasing household debt such as credit cards, loan defaults, the need to creatively generate additional funds, by re-financing ones home, thus falsely inflating consumer prosperity and artificially stimulating the economy, potentially creating a balloon effect and synthetically prolonging the economic expansion cycle.
With each economic down turn, companies are forced to cut operating cost, leading to job freezes and employee layoffs, thus perpetuating the every ending feast or famine cycle. With each cycle down turn, an additional layer of disenfranchised individuals is added to the existing pool of the unemployed ranks. While the majority of these individuals will be rehired, the question then becomes, are they rejoining the work force at or above the level at which they were let go. The level referred to is defined by their skills & educational set, salary, benefits and job satisfaction. In addition, what percentage return to work below their prior level and the number of individuals that were unable to find employment. The individuals that were unable to find employment, and exhaust their unemployment insurance, including out of work self employed, are considered the high-risk pool.

These are the populous, that fall off the radar and seamlessly become non-existent. Though the Bureau of Labor Statistics (BLS) attempts to capture these individuals (the so called U1, U4, U6 etc. measure, with U6 measuring the broadest group of underutilized workers) in their unemployment report, the accuracy is highly questionable.
These are the individuals that we refer to as being members of the “sub economy”.

To follow
The U.S. Economy A Different Prospective: The Social-Economic Effect Of The Sub-Economy
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