There are two related micro trends that seem to be emerging and I think that together they tell an interesting story about why this downturn may linger for so long.
1) The contraction of the professional services industry. This includes corporate lawyers, consultants, ad execs, etc.
This is the first time that we've seen a deep downturn extend to these fields. These people were not making millions like hedge funds managers, but like the Wall Street Journal says here:
"The work that America does for the rest of the world -- advertising, software, medicine and complex financial transactions -- has fostered this kind of growth.
And this has brought a largely unnoticed surge in American households (before the crisis) making over $100,000 of income. And a look at the 2008 exit polls shows how significant the changes had become -- in 1996 only 9% of the voters said they made over $100,000. This year it was 26%.
What is a laid-off lawyer to do? They principally had their savings in the stock and housing markets, which have been decimated. Unlike many blue-collar and public-sector workers, they have no union protection, limited pensions and suburban-family expenses. And as professionals, they have perfected how to do their narrow job well. But many have little direct business sense or experience."
This has long been my criticism of the current American workforce. Our excessive specialization of services makes the average professional practically worthless outside of their area of expertise. These workers need to reemerge as well-rounded employees with broad skill sets if we are to pull out of this downturn.
2) The real immigration problem isn't people sneaking in under the cover of darkness at any of the thousands of different points of entry around the country. The real problem in my opinion is the reverse brain drain that seems to be happening as high-tech immigrants start to return to their homeland as jobs become tighter and visas become harder to obtain.
In this piece over at the NY times, you can see that the trend of workers returning home is spiralling upward. I don't care if you are from Mexico, India, Vietnam, Idaho or Mars. If you are the most talented person for a position, then I'd like to see you working in the US because you'll help your company succeed and you're family will add to the fabric that makes our nation great. Many people will play the immigration card - let 'em go, etc - arguing that it makes more room for Americans to do the work. That's foolish given that as I pointed out above most American professionals are so specialized that they can't do anything but the job they currently have.
Both of these trends need to be addressed.