Is it possible to reinvent yourself - Avoid the pitfalls of the Long term Unemployed

At a holiday party over the weekend I sat next to an economist and the conversation ended up focused on the long-term unemployed.  Quickly one realizes that economist have a brutally different way of thinking.  The gentleman I sat next to said there is nothing that can be done for approximately 40% of the long-term unemployed.  For a staggering number of people like that to be allowed to just fall off and never to be counted again is somehow at minimum unacceptable for me.  Unfortunately, though he is right when you are looking at it from an employer's point of view.  When employers are seeking to hire they do not see through a lens that accommodates for the Great Recession.  But more from a bargaining view as this allows them latitude to negotiate wages better, as such big gaps in employment history are frowned upon.

With what appears to be the end of extended unemployment benefits questions on how this will affect the unemployed in an economic that appears to have found a rhythm without their participation.  For some the economy itself is still in great need of stimulation to create jobs for those who without the benefits will most likely end up on the fringe of a population that is gainfully employed.  Keeping the benefits going is for some its purely unsustainable.  It was a temporary measure used during extraordinary times that should be shut off now.  For others it is a moral issue.  How do you just dump that many people into "wilderness" without offering viable options.

While most of us agree that the job front has changed dramatically over the last two decades -  Gallup shows unemployment - 30-Day Rolling average  of 7.3% and 17.3% underemployed but we are also constantly hearing of 3 millions jobs that employers are finding difficulty in filling.  These 3 million jobs that remain unfilled represent a staggering skills gap where the majority of the unemployed are coming from manufacturing background and the available positions very technical.  There are many suggestions out there on reinventing oneself to meet the needs of the new job market but precious few are psychologically prepared to go through the necessary steps/training.

Failing to reinvent oneself leaves many with the undesirable option of accepting compensation that is way below what they were accustomed to prior to the Great Recession.  Few are able to come to terms with this decrease in earnings and adjusting their living standards accordingly.  Those that fail to make said adjustments then use their IRAs and 401(k) as bank accounts draining all their retirement assets. 

People general misrepresent "wants" and "needs".  At the beginning of our professional lives we generally do not earn a huge amount.  When we first start working we are grateful for income and we general budget and stretch things here and there.  As our income increases so too does our spending.  Living in a retail society are pressured by the constant bombardment of commercials; special offers and introductory prices that soon wants becomes needs.  

Who truly needs 50 pairs of shoes?  Or a brand new television, cell phone, tablet or game?  I often hear people speaking of upgrading - the shows you watch on your TV do not upgrade nor do the conversations you have on your cell phones.  As such that "upgrading" is all about keeping up with the Jones. But the question to ask here would be - do you know what the Jones' true earning power is?  As the economist so love to say - "All things being equal", or as the rest of us love to say but seldom apply appropriately, "comparing apples and oranges".  If your possessions must be on equal footing with those you wish to emulate in the retail world shouldn't first strive to earn as they do?