Wednesday, June 5, 2013

The future of 'traditional' employment?

Several articles over the past few days, when taken together, paint an alarming picture for those trapped in 'old-school' jobs - yet also hold out new opportunities for those prepared to 'reinvent' themselves by committing to a new approach.  That's going to take guts, and willingness to commit to building a long-term future for ourselves as individuals rather than 'corporate slaves' - but I think it's increasingly obvious that therein lies our only hope to eke out better than a subsistence-level existence.

First, in 'The Age Of Smart Machines', the Economist points out:

Two things are clear. The first is that smart machines are evolving at breakneck speed. Moore’s law—that the computing power available for a given price doubles about every 18 months—continues to apply. This power is leaping from desktops into people’s pockets. More than 1.1 billion people own smartphones and tablets. Manufacturers are putting smart sensors into all sorts of products. The second is that intelligent machines have reached a new social frontier: knowledge workers are now in the eye of the storm, much as stocking-weavers were in the days of Ned Ludd, the original Luddite. Bank clerks and travel agents have already been consigned to the dustbin by the thousand; teachers, researchers and writers are next. The question is whether the creation will be worth the destruction.

. . .

There is a good chance that technology may destroy more jobs than it creates. There is an even greater chance that it will continue to widen inequalities. Technology is creating ever more markets in which innovators, investors and consumers—not workers—get the lion’s share of the gains.

This resonates with me.  I was a computer operator, then programmer, then systems analyst, then project leader and manager, back in the 1980's.  The work I did then, and the tools I used (programming languages, hardware and software, etc.), are effectively dinosaur-era compared to what's out there today.  I'd need months, if not years, of re-training before I could do those jobs today;  and no company would be prepared to pay for me to get that training.

As if to reinforce the Economist's point, the Los Angeles Times reports:

"Growth in GDP has been positive, but not exceptional," UCLA economists wrote in their quarterly Anderson Forecast. "Jobs are growing, but not rapidly enough to create good jobs for all."

The report, which analyzed long-term trends of past recoveries, found that the long-anticipated "Great Recovery" has not yet materialized.

Real GDP growth — the value of goods and services produced after adjusting for inflation — is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.

"It's not a recovery," he wrote. "It's not even normal growth. It's bad."

That has long-term implications in the face of technological advancements that continue displacing workers
, Leamer said. And the country's education system isn't adequately developing the workforce of the future, he said.

"Regrettably we reward teachers if their students can regurgitate the information on standardized tests," he wrote. Future workers will need creative and analytical thinking skills for 21st century jobs, he said.

Bold, underlined text is my emphasis.  The article makes a vital point.  If we're not educating our children to take their place in the changing workforce, how will they ever become economically self-sufficient?  Are we breeding a generation who will remain dependent, either on their parents (who can ill afford it), or on the State?

Dependence on the State isn't likely to work very well, either, as those relying on Social Security to fund their declining years are finding out.  If that's your retirement plan, you're doomed to disappointment - and possibly to poverty.  CNS News informs us:

The Social Security program faces $9.6 trillion in unfunded liabilities over the next 75 years, which is up $1 trillion from last year’s projection of $8.6 trillion, according to the latest report from Social Security’s board of trustees.

. . .

That $9.6 trillion shortfall equals approximately $83,894 per household based on the Census Bureau's latest estimate that there are 114,430,000 households in the country.

However, “[e]xtending the horizon beyond 75 years increases the measured unfunded obligation,” according to the report. “Through the infinite horizon, the unfunded obligations, or shortfall, equals $23.1 trillion in present value, which represents 4.0 percent of future taxable payroll or 1.4 percent of future GDP.”

Again, this has been forecast for years, along with calls from many parties for reforms to the Social Security and Medicare system.  However, desperate retirees (whose votes are a powerful force in US politics) have so far blocked any major reforms.  That can't continue - because when there's no money to pay the bills, they won't be paid.  No matter how much those on Social Security want their monthly payments to continue at their present level, that's not going to happen.  Those of us nearing the age when we can apply for Social Security had better get used to the idea that we're not going to get anything like the benefits that have been promised to us by our politicians.  They're unaffordable.

Finally, in 'Nine Things You NEED to Know to Survive the New Economy', James Althucher notes:

Supply and demand is starving the middle class. Population is going up, but high-quality jobs are being outsourced, globalized, mobilized, and roboticized.

I'm on the board of a $600-million revenue company in the temp staffing space, Corporate Resources (CRRS). Revenue growth last year was 35% despite job growth being about 0%. There's a reason for this.

The Fortune 500 is firing you. All big companies are systematically firing all of their employees. I'm exaggerating, of course. Maybe.

But that's why temp staffing as an industry is going through the roof. The big companies don't want employees. Why not? They don't want to deal with Obamacare. They don't want to pay the high salaries that aging baby boomers demand, and too many employees are having sex with each other. With temp staffers, they don't have to deal with all of the issues.

Sobering thoughts . . . but that's the reality of the workforce today.  There are millions of Americans in part-time, temporary work, who'd love to get full-time jobs with benefits;  but they probably never will.  Those jobs are gone, and won't be coming back.

If we want better than a hand-to-mouth hourly-paid existence, we're going to have to take charge of our own futures and reshape our own working environment.  For most of us, that'll involve a mixture of what work we can get in the formal sector, coupled with private initiatives in the informal sector, where our labor and skills can be bartered for things we need, or applied to earning opportunities outside the corporate world.  (Yes - that's what I'm trying to do by building my writing career.)



Retired Mustang said...

It was weird for me to make the recent decisions I did regarding my life. Although I started looking at the idea of being a business owner about fifteen years ago, I wasn't ready then. Now, though, I'd never go back. It's hard, changing not only what you do, but also the way you think. I've had to learn to start a business. I'm blogging, now (I guess with two blogs I'm a multiple blogger). I'm working on marketing products through my business website. I'm writing a book and before another thirty days are up I should be podcasting. None of this has to do with me, really. It's all a function of new economic reality and long term history. The closest thing to a guarantee of long term financial success is to be a business owner. Being an employee is just too risky. I just wish it hadn't taken current economic reality to make me understand this.

Mad Jack said...

There's another reason the temp employees appeal to business; the business can fire a temp for any reason or no reason at all, any time at all. Discrimination? You bet, but so what? If you have the skill set to be a contractor, you just call your headhunter and let him know you're available.

The good part about being a temp is that you're on the clock. You're hourly, so by the time some bonehead in a suit calls you at 2:00 AM on a Saturday night, you can be sure they need you.

Just make sure you get paid, and you can do very nicely.

joe said...

Mad Jack:
VA is an "employment at will" state, so we can be fired for any reason or no reason at any time. Don't have to be a temp.