Salient to Investors:
Laurence J. Kotlikoff and Jeffrey D. Sachs say smart machines are substituting for young unskilled labor, and our children and grandchildren will be worse off as the wages of unskilled young adults decline.
While a subset of young adults is tech savvy and the leading edge of Internet development and highly rewarded, a larger segment has been raised and educated to be tech consumers rather than producers and now faces a lifetime of low wages as ever-smarter machines substitute for their labor.
Learning to program is as necessary for unskilled labor in the Internet Age as reading, writing, and arithmetic were to unskilled labor in the Industrial Age.
BLS says employment in the information industry was 2,659,000 in 20111 versus the 3,630,000 peak in 2000. 54 percent of the jobs decline came in newspaper publishing – from 422,600 to 240,900 – and in wired telecommunications – from 921,800 to 577,200. Internet publishing businesses employed 108,000 in 2011 versus 110,800 in 2000.
Richard Vedder, Christopher Denhart, and Jonathan Robe of the Center for College Affordability and Productivity give three reasons for going to college – To increase human capital and make workers more productive, as a screening device for employers, and because it’s fun. The US labor force has 42 million employed college graduates and 29 million jobs that require a college degree.
The Pew Research Center says that among Americans aged 40 to 59 with adult children, 73 percent have provided financial support to at least one child in the past year.
The Census Bureau reports the annual homeownership rate fell to 65.4 percent in 2012, from 66.1 percent in 2011 and an all-time high of 69.0 percent in 2004.
The percentage of first-time bachelor’s degree recipients who borrowed to pay for college climbed from 49.3 percent in 1994 to 65.6 percent in 2009. The cumulative amount borrowed by first-time bachelor’s degree recipients for their undergraduate education rose from $14,700 in 1994 (in 2009 dollars) to $24,700 in 2009.
The National Center for Education Statistics says the number of students enrolled in college is projected to grow steadily through 2021, at both public and private colleges and universities.
The Census Bureau says median household net worth was $68,828 in 2011, versus $106,585 in 2005 and $81,821 in 2000. Household debt is declining from its 2010 peak, and credit card debt has plunged. Other debt, including student loans, is higher than ever.
The 2013 Retirement Confidence Survey says most workers aged 55 or older have little savings: over one-third has less than $10,000 in savings and investments, and the 52 percent majority has less than $50,000. Only 42 percent have more than $100,000. 54 percent of older workers say they will never retire or will postpone retirement until age 66 or older, versus 37 percent who said this a decade ago.
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