Monday, January 23, 2012

Roswell, Georgia ... An Example of Structural Suburban Long Term Unemployment Issues

Long-Term Unemployment Ripples Through One Town reveals details of the current recession's effects on the Atlanta suburb of Roswell, a middle class community.

The article serves as a stark reminder of how this lengthy and deep U.S. recession has affected life in many U.S. suburbs as well as how unprepared these communities were to meet the unforeseen challenges.

In brief here's the Roswell story:

"ROSWELL, Ga.—The waiting list for subsidized housing here, just 40 families long a year ago, is up to 500. The number of children eligible for free or reduced lunch is up 50%. A little more than a year ago, the Methodist church began seminars for marriages strained by job losses.

Roswell is a pre-Civil War cotton mill town that grew into a wealthy bedroom community of Atlanta as the metro area prospered. More than half the city's 88,000 residents have four-year college degrees. But Roswell sits in a region with an unusually severe case of long-term unemployment: About 40% of the unemployed in the Atlanta metro area in 2010, the most recent local data available, were out of work for a year or more versus the national average of 29%."

Broadcast journalist Edward R. Murrow once said that "The obscure we see eventually. The completely obvious, it seems, takes longer."

With that in mind, let's use Roswell as an example of the many troubling aspects of our nation's structural long term unemployment problem:

"'This is what people saw in Europe: You had large groups of people who hadn't worked in a long amount of time," says Betsey Stevenson, former chief Labor Department economist and now a visiting professor at Princeton University. "I am really quite fearful that 10 years from now we're going to look back and go, 'Why didn't we fight this harder?"


The longer people are out of work, the more likely their skills are to become obsolete—particularly at a time of rapidly evolving technology. "You are in your 40s, 50s or 60s, and you are suddenly out of work," said Jonathan Warner, director of community and economic development at Chattahoochee Technical College, which has its main campus in Marietta, Ga., the next town over from Roswell. "What are you going to do? Who is going to hire you? The smart ones come to us to get retooled.'"

One basic issue for Roswell and similarly situated suburbs is how to address the widespread issues raised by structural unemployment in their middle class communities:

"Unemployment is, at first, a personal struggle. But as it persists, the ripples spread throughout a community.

Local governments in the arc of wealthy suburbs north of Atlanta don't have the infrastructure to deal with thousands of middle-class residents who have been out of work for six months or more. They never had the need before.

"I haven't experienced this kind of impact in my lifetime," says Jere Wood, a 63-year-old lifelong resident of Roswell who has been its mayor since 1997. "This isn't the first time a lawyer's lost his job, but it's the first time a lot of them have lost their jobs." Unemployment in the Atlanta metropolitan area in which Roswell sits was 9.8% at last tally, well above the national average.

The roster of Roswell residents collecting Social Security disability benefits, often the last refuge of those who can't find work, is up nearly 16% since 2007, mirroring the national increase. Local charities are serving residents who once earned six-figure salaries. Unemployed parents scramble for fee waivers to keep children in after-school sports."

But it's not just Roswell that is experiencing this huge issue of quasi-permanent unemployment conditions for a community's residents. Not by a long shot, as the chart below shows.


Our U.S. long term employment dilemma is not a temporary one. Short term government spending won't do anything to cure the patient. But our society needs to recognize its severity and that the private sector's jobs machine is the only viable long term solution. But how?

Well, stopping the government assault on private sector job creators, including especially energy companies, would be a most welcome first step. Curtailing government spending would be a nice second step. And reducing taxes wouldn't be a bad idea either.

We need to come to grips with the simple fact that government spending programs, whether stimulus related or not, won't make a genuine dent in our very real structural and global competitiveness issues.

Our politicians have been acting for several years as if we're only experiencing a severe but temporary slowdown. It's severe, for certain, but there's nothing temporary about the lack of jobs issue.

In a fundamental sense, we are facing enormous structural issues which must be attacked and resolved, although there's no short term or painless way to get back to the "good old days."

So even though the vast majority of our politicians have no clue what to do, they could at least admit as much and get out of the private sector's way. The lack of government "help" would be a great way to start the process.

In the meantime, through ongoing government intervention and regulation, we're becoming more socialistic like Europe each day. And that's not a very hopeful sign for America's future. A role model Europe's clearly not, unless as an example of what not to do. Free lunches for all are the most expensive kind.

In simple terms, our tendency toward more of a welfare state can't continue indefinitely.

We simply can't afford to maintain existing social security, medicare and medicaid benefit programs without implementing big tax increases. And if we do that, we'll have lost our way.

Waiting for our problems to remedy themselves with the passage of time is foolhardy. We must aggressively resolve and then act to improve our global competitiveness.

To be sure, things on the jobs front will continue to improve somewhat even if we do nothing, but only temporarily and not all that much. Besides, the structural employment problems aren't going away anytime soon.

Unless we initiate steps to free the private sector and support its efforts to get us back on our competitive feet globally, our best days will be behind us. And that must not be permitted.

It's time to stop the platitudes and begin the restoration of American growth and competitiveness.

Otherwise the Roswells of today will come to represent the entire U.S. of tomorrow.

There's time to get the job done, but there's no time to waste. So let's stop pointing fingers and get busy figuring out the best path forward for Roswell and for the rest of us as well.

Thanks. Bob.

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