In some cases, a recession can be a good thing because it forces companies and people to write off bad investments, obsolete technology, and out-of-date practices, all aimed at one important goal: Increasing productivity, or the operating profit per employee.  As the recession fades into the background, which they inevitably do as people adjust and wring the excess out of the system, many of the gains in know-how and productivity stay with the system.

This bodes well for the overall economy but not for the people most likely to be hit by a recession – those who have low skills relative to the general population.  As I’ve written about in past essays, the unemployment rate among those with advanced professional degrees is only 2%,and  among those with college degrees, only 4% or so.  In this class, for all intents and purposes relative to historical norms, there is no recession.  All of the pain is concentrated in the low-skill sector of society, especially men without high school degrees or only high school degrees.  In certain sub-groups, economic data shows the unemployment rate is as high as 40% to 50%.  That is one of the reasons it is short-sighted and foolish to talk about “The American Consumer” as Don Peck pointed out in a fantastic article called Can The Middle Class Be Saved?

Obviously, no one wants to hear that especially if you are among the low-skill, unemployed segment of society.  All you know is it’s hard, if not impossible, to put food on the table.  But until politicians start getting honest and tell folks these jobs are not coming back, and they will never come back, people will continue clinging to a false hope.

The only reasonable chance someone has of climbing up the socio-economic ladder is to retrain and acquire skills that are in demand relative to supply.  For example, there is a shortage of dentists in the United States right now and a general practitioner in that field earns roughly $ 150,000 per year, or $ 12,500 per month.  A dentist married to a dentist in a joint practice, earning a combined $ 300,000 per year, would be in the top 1% of income.