Yesterday I was listening to an NPR program about how small businesses are adapting to the downturn in the economy. Talk focused on the usual tips and tricks for pounding the pavement and interviewing well and what not, and then about how small businesses are reluctant to hire and prefer to just work their present staff harder if businesss is good, but then the tone got progressively darker.

A woman PhD called in and said that even though she has a lifetime of professional experience and excellent credentials, she has been unable to secure any kind of conventional job (nevermind employment in her field of expertise) since being laid off over a year ago. She is currently working for herself, drumming up freelance gigs online and paying a 10% referral fee to the job board for each project she wins. (Most freelance boards take a percentage of the payment once the freelancer completes a project).

This caller made the point that she is doing the exact same work she used to do at her old professional job, but now she makes substantially less money (when she can get projects). Working for herself, she makes about what she made in the workforce when she first graduated college in 1991.

In addition to the reduced pay and the pressure of having to constantly drum up work, she no longer has health insurance and she has to pay all of her own business expenses including: maintaining her own internet connection and software, driving to and from client meetings and to and from sites where she does her contract work, job board fees, and more.

To have a shot at being awarded projects, she has to bid against hundreds of other freelancers, some of whom are living in foreign countries with reduced costs of living, or who live in the U.S. but are willing to do the work for almost nothing for their own personal reasons (lack of confidence, desperation, other wage earners in the household). Although these competitors do not usually possess her skills or her expertise, their presence in the provider pool drives down the price she can command for her skills as contract laborer. Her skills do give her an edge in winning contracts, but they do not get her decent pay.

She made the following excellent point:

Given that contract labor is now so readily available to both corporations and small businesses at a fraction of the cost of carrying a professional employee (and all the costs of a benefit package), what incentive do businesses (large or small) have to ever hire American professionals again?

Why should we expect that these kinds of jobs will ever come back?

I confess it’s a question I’ve had in my own mind on more than one occasion.

Today the U.S. Department of Labor announced that the unemployment rate is holding steady at 9.7% and that ‘only’ 36,000 jobs were lost in February. Does anyone still believe these figures? Is there a person working or not working today who doesn’t just assume that these figures are cooked and cooked and cooked again until they give the very best spin on things? Even after all that, the figures look positively dreadful because they are positively dreadful.

Over six million people in the U.S. have been out of work for over six months. And that’s the official figure. (Watch the clip above for a clearer understanding of the real numbers.) Even if the U.S. sees positive job growth in March, most economists estimate it will take at least five years of steady sustained job growth for the country to get back to anything resembling full employment.

Government jobs bills may help some, but when you get right down to it, how many wind turbines can we build in the U.S. anyway? How will creating jobs caulking windows help people like the NPR caller—people who spent years acquiring professional skills and expertise that have now been so radically devalued that they can barely provide a stable, entry level wage within the U.S.?

At the other end of the spectrum, students in California were busy holding mass protests the same day as the NPR call-in show. Tuition at state colleges in CA is going up over 30% in a single year, and many of the students have already borrowed beyond their capability to pay back their loans and are now facing the very real possibility that they will have to drop out before their education is complete. They want to know what kind of future they can possibly have now, saddled with loads of privately financed college debt, no degree, and little prospect of getting a full-time job of any kind?

In fact, the NPR caller mentioned she is still paying off $150,000 in student loans—19 years after graduation—while watching the pay she can command drop with each passing year.

The elephant in the living room is clearly corporate greed and bogus government talk of an impending economic recovery. Wouldn’t it be better to have an honest discussion about the real longterm prospects for full employment in the U.S. than to keep pretending like any minute here the consumer confidence index will pop up and everything will magically be all better? Do we really have a jobs problem? Or are we looking at a much, much deeper policy problem? Something that has been buidling for decades?

If jobs are not coming back soon, if more people in the U.S. will want jobs than can get jobs for years to come, if this crisis is going to last another year or three or five or ten, then we really need to get some kind of social safety net in place and we need to do it fast.

Once that is accomplished, all of us will need to take a long hard look at our future as a nation and face the fact that most of us are going to have to accept a radically lower standard of living for the forseeable future. It’s not good news, but if we at least are talking about reality we can plan accordingly.

On the other hand, we could just go on pretending that one day we will all wake up, whip out our credit cards again, and it will all be magically better… somehow.

Somehow, I think it won’t. Not soon anyway.