Underemployment > unemployment in the long-term

Yesterday’s Wall Street Journal featured an article about the number of folks in the United States who have found “work” but are dramatically under-employed in their new positions.  These are folks who have found a job but whose pay and responsibilities are dramatically lower than they were prior to losing their former jobs.

Examples of this included a money manager who was now working at Starbucks.  A manufacturing manager with two masters degrees that is now working as a janitor.  And so on.

If it weren’t bad enough that these very skilled folks are underutilized, consider their future pay.  Unfortunately, most future pay increases use current pay as the basis for a raise.  This means that these workers are unlikely to ever make as much money as they did before they lost their positions.

I wrote about this likely result of the Great Recession almost two years ago.  This is another example of how intuition trumps analysis.  While other economic and financial market commentators await data, those who use their intuition have an additional, very powerful source of information.

Jason