Stay Curious My Friends

I highly recommend an article on why Jobs aren’t coming back (by Noam Chomsky) over at Salon.com.

I don’t agree with some of his conclusions but I do like his point that when a lot of money is concentrated in the hands of fewer people they have a lot more political power. And that can lead to some very big problems. Watching the giant slush funds that the supreme court approved battle it out on issues that don’t really matter has been incredibly frustrating, plus the 30 second takes on complex issues that does a disservice to those issues. It will be interesting to see where this leads over the next decade.

I think he is crazy on some of his turn it over to the workers thought, it just doesn’t work well in practice and unions are a majority of why the American auto industry is such a mess. For example in Canada workers are heavily protected which is good, in France too, but from a business perspective the balance has gone a little too far. The USA is a good balance from my experiences so far.

But I do like that he is so gung ho from that side, it really keeps that line down the middle instead of slipping too pro business.

Thomas Friedman has been on fire the last couple years, there isn’t much he has said that I haven’t agreed with. His latest column is entitled Average Is Over and is a MUST read.

In the past, workers with average skills, doing an average job, could earn an average lifestyle. But, today, average is officially over. Being average just won’t earn you what it used to. It can’t when so many more employers have so much more access to so much more above average cheap foreign labor, cheap robotics, cheap software, cheap automation and cheap genius. Therefore, everyone needs to find their extra — their unique value contribution that makes them stand out in whatever is their field of employment. Average is over.

In the last decade Americans have found that they are now competing for more and more jobs against people in other countries as well as gains in automation technology. I’m not going to call this good or bad, just inevitable.

What I find kinda funny is politicians in the USA complain about companies hiring people abroad, or moving factories abroad, but in the next sentence they say they don’t want the government in a free market. A free market doesn’t necessarily produce the best market for the people working in a specific country. It produces the best market for buyers and sellers.

After hearing all the blah blah blah about the Bush tax cuts I’d like to propose that anyone with a salary above $500,000 be hit with a 2% to 5% tax that goes solely to retraining the bottom of the work force. As per the previous post we need some massive educational effort to really move people who were in construction, real estate, the car industry, heavy industry in general, and other segments of the economy that have gotten hit so hard to new segments that will actually exist and grow over the next decade. And mostly this means towards green energy, computer fields, and service based industries.

Or we go with plan B, we legalize weed and tax the living hell out of it. I’ve seen estimates that claim California alone could reap 1.4 billion a year from that, let’s dump that all into retraining our work force (and possibly buying them delicious Doritos).

Over the last 50 years the USA hasn’t had to worry about training too much, globalization was still a distant worry and our economy was doing well. Now we are being forced to evolve and remember what it’s like to have a little competition in what is becoming a more equal playing field with graduates from India, China, Brazil and other countries being able to compete for jobs that were once out of their reach. So, if your job is not very hard to do, and with modern technology we can outsource it for half the pay and a 10% increase in management cost, guess where your job is going?

Just look at cashiers at grocery stores, they are slowly being replaced with computers that enable consumers to do the checkout process, in five to ten years with RFID the computer might just read what is in your cart. There will always be some cashiers but that is not a job market that is going to grow, and that is certainly not one that is going to see their pay raise over the next ten years. Similarly a lot of low paying jobs will probably always exist but technology is going to allow us to reduce those work forces, and unless the government gets involved those will not be much more then whatever the minimum wage is at. This kinda sucks but reality does suck sometimes.

So how to retrain people? That is a hard question and one I have a lot of ideas on but I’m not sure if there is a right answer besides spending a lot of money and try a lot of different things…