Number One Reason American Students Can’t Find Jobs

A report from the National Institute of Retirement Security (NIRS) found that American households have a shortfall of anywhere between $6.8 trillion to $14.0 trillion when it comes to their retirement savings.

Looking at their assets only in their retirement accounts, 92% of working households in the U.S. economy don’t have enough savings to meet their retirement target. (Source: “The Retirement Savings Crisis: Is It Worse Than We Think?,” National Institute of Retirement Security, June 2013.)

Sadly, that’s just one part of the problem. The report also pointed out that as many as 38 million working-age households in the U.S. economy don’t have any retirement savings. In addition, for all working households, the median retirement savings is just $3,000. For those who are near their retirement, their median retirement savings are just $12,000.

About 67% of working households between the ages of 55 and 64 and with a minimum of one person involved in the jobs market earning income have saved less than the amount of one annual income. (Source: Ibid.)

How will this phenomenon impact the U.S. economy? The effects of a major shortfall in retirement savings can be many, but one of its main victims may just be the already struggling jobs market.

What we already know from the most recent jobs market report is there are almost 12 million unemployed Americans. Most of those who were lucky enough to find a job are working low-wage jobs, like those in the retail sector, or are working part-time.

According to the U.S. Department of Labor, in 2012, there were 284,000 college graduates who were working for minimum wage in the jobs market—a figure that has doubled since 2007, and has increased 70% from 10 years ago. (Source: Wall Street Journal, March 30, 2013.)

As the report cites, there is a significant number of Americans without sufficient savings who are closing in on retirement age. It’s likely that they will stay in the jobs market longer, because they don’t really have any other option.

The jobs market will feel a ripple effect as those who are already looking for work or those who are looking to enter the workforce find fewer openings.

Consider the college graduates working for minimum wage in the jobs market. If they have student debt, they will have troubles paying it off—which will lead to a higher delinquency rate on the already $1.0-trillion student debt load.

And those with lesser skills in the jobs market will have even more difficulties finding work compared to what they see now.

Dear reader, food stamp usage in the U.S. economy is at a dangerous level; and I can see it going even higher as more Americans are unable to find work due to those staying in the jobs market longer rather than retiring.

As we have learned, and similar to Japan’s mishap, printing more paper money helps the stock market and big banks—not the little guy. About two-thirds of U.S. gross domestic product (GDP) is dependent on consumer spending. If consumers are not spending, we have no GDP growth. If consumers pull back on spending, we have negative GDP growth. That’s why I’ve slowly been preparing my readers for another recession. And no stock market I know has ever risen during a recession.

What He Said:

“Many of today’s consumers have purchased properties with very little down payment. They’ve been enticed by nothing-down, interest-only, second and third mortgages. Bottom line: The lower interest rate environment sucked consumers into the housing market big-time. And that will eventually cause us all problems.” Michael Lombardi in Profit Confidential, June 22, 2005. Michael started warning about the crisis coming in the U.S. real estate market right at the peak of the boom, now widely believed to be 2005.