Unemployment is growing very unreliable as a measurement due to both the large number of people dropping out of the labor force and the creation of only part-time or minimum wage jobs, the high inflation of education prices and staggering amount of debt the average student holds, and an unexpected negative profit growth the corporate sector in Q1.

Let’s start with why unemployment, as a base statistic, is becoming an unreliable measurement. Since the great recession in 2008, the economy has fallen from nearly 11% at the peak and a little after the recession, to a current holding at 5%, based on statistics from the Bureau of Labor Statistics. On the surface, this looks really good since the US economy likes to be around 5%. We are back to normal! This is just on the surface; a report from the New York Times back in 2014 says that yes, more jobs are good, but it also states that the jobs being created are terrible and are far from what the US needs to be doing. Statistically the report shows that the recession took out mid and high wage jobs such as accounting and legal work with a loss of around 3.6 million jobs and a gain back of only 2.6 million in the recovery. Subsequently, the low wage sector, especially fast food, reported losses of 2 million with a gain of around 3.8 million. Another aspect of why unemployment is not an accurate measure is due to the fact that it does not count those that have not looked for a job within the past four months or are out of the labor force altogether (27.6% according to the Bureau of Labor Statistics).

Next, I want to talk about the inflation rates of tuition of higher education and the constant increase of student debt. Back in the years of my parents (the 90’s), and even more so before, a college degree meant you had a job waiting for you upon graduation and a manageable amount of student debt. Since the 90’s, we have seen a tuition increase that is staggering. An extreme 69.98% increase in tuition was recorded from the years 1990-91 to 2000-01 in 4-year public institutions, according to Statistics Brain. Thankfully we have not continued to increase by that outrageous percentage but nevertheless we have increased continuously year over year. The percent change from the year of 2012-13 to 2014-15 still showed an increase of 6%. Student debt has also increased with the Huffington post reporting that from the year 2007 to 2013 student borrowing has gone up 28% while the typical bachelor degree holding full time worker only experienced a 0.8% decrease in weekly earnings during the same period, while those holding advanced degrees showed an increase of only 0.2% in weekly earnings.

This all begs the question, is it still as worth it to go the traditional route? The final point is that we are starting to see the effects of a decline in the economy as a whole with the corporate sector showing a negative profit growth in Q1. This can be looked at in the angle that consumers are buying less goods. Lets look at data from 1950 compared to that of 2013. According to My Budget 360, in 1950 the average family income was $3,300 annually compared to $51,017 annually in 2013. Traditionally, owning a car and home have been symbolic with success in the US. Thus, it’s not surprising to learn that the ratio of owning a home compared to income has gone up from 2.2 in 1950 to 3.7 in 2013, while owning a car stayed relatively the same with the ratio being .45 in 1950 to .42 in 2013. The really interesting thing is that instead of owning a house and car being the leaders of inflation, it is now college tuition and health care. College tuition alone jumped from .18 to .79 of the annual income of families, which means that instead of only spending 18% of a family's gross annual income (paying cash) they now must spend 79% causing massive borrowing and less to spend in the future. This, in turn, leads to less spending on the corporate market since there is less money to go around. This coupled with the loss of a guarantee of getting a decent job out of college inflames the problem even more by having little to no money to pay the student debt off let alone to spend money in the corporate market.

It is agreed that innovation is what drives our economy and I fully support that innovation and ultimately economic growth is what is needed most of all. That being said, I do not think it will happen-- at least not fast enough. Back when I was an engineering major, I was required to watch a Tedtalk on the expansion of cities and in this talk he explains that in order for a city to maintain functioning forever innovation, which fuels growth economically, growth will be required to happen faster and faster at an exponential rate. I believe the same is true with our economy now; innovation needs to happen at an exponential rate. Based on the data and what I read in the news, I do not see it happening fast enough to sustain the US Economy. The downhill slide has started in my opinion and unless we see major restructuring of the Americas and the world’s economy, or crazy helpful innovation, it will not be pretty.