By TED LUX
Have you been walking around the streets of Los Angeles recently just a little dazed and confused? If so, you’re not alone.
Today, with rising unemployment across this country (now 10.9 percent in Los Angeles County) many are scratching their heads trying to figure out what to do next. And the scratching is more severe than ever with the destruction of market wealth on an almost unprecedented scale over the last 18 months. Look for massive changes in our work force in this country and Los Angeles as our economy continues to slide into chaos.
It was recently reported that more than 5 million Americans have filed for unemployment benefits the most on record. But that figure does not take into account the underemployed and self-employed. That is, the consultant or agent trying to make a buck on his or her own. It also does not factor in those who have stopped looking for work altogether. Many more people are living on the fringe than the 5 million.
The American and L.A. economy is in deep straights. A prominent L.A. real estate owner told me, “The economy is really upside down. We are in deep doo-doo and I don’t know what it will take to get us out of this mess.”
President Obama has been pressing for job growth through government intervention and massive public works projects. The majority of jobs created, no doubt, would be yellow hard-hat ones. Look for displaced auto workers and other blue-collar citizens to fill the majority of those infrastructure jobs.
White-collar sector
But what happens to the massive amounts of unemployed people now coming out of mortgage lending, real estate and financial services? These are mostly white-collar jobs; many are college graduates and some have MBAs and law degrees. Are these displaced workers going to immediately find jobs in accounting, engineering, health care or the so-called green occupations? I doubt it, and I don’t think the government or anyone else has figured that one out.
I would venture to say that most displaced 50-year-olds coming from those industries don’t see themselves donning yellow hats and riveting bridges or constructing highways starting tomorrow.
The displaced middle-aged $50,000-$200,000-a-year white-collar wage earner is going to find a terribly tough time today reinventing himself or herself. A friend of mine, recently laid-off from a senior banking role, mentioned over coffee, “Ted, I guess medical school is out of the question for me at this stage of life. Now what am I going to do?”
My friend and many others like him in Los Angeles are facing this challenge, and even crisis and the pain’s magnified with the crumbling of the real estate and stock markets.
Wealth has basically been cut in half for millions of American and Angeleno families over the last 18 months. Look for retired grandmothers and grandfathers being forced back to work. Look for them to compete for jobs with 18-year-olds at fast-food, urban-cookeries and kitchens across America. For many there will be no retirement on a golf course. That notion and that dream are quickly fading.
What’s confronting many Americans is the “perfect storm.” Millions of adults, no doubt, will find it tough to weather this one. We’re entering the greatest redefining, redirection, reinvention and retweaking of this country’s work force in history.
There is no easy solution to this predicament. And look for our collective head-scratching to continue for quite some time.
Ted Lux is a former account executive with a major securities firm and has been involved in L.A. real estate lending for more than 20 years. He is author of an investment book.
