The irony of the US economy: no jobs and no one to hire

http://randfishkin.com/blog/28/the-irony-of-the-us-economy-in-2010-no-jobs-no-one-to-hire

by will_critchlow • 16 years ago

63 92 16 years ago

narrator• 16 years ago

The per-pupil spending graph reminds me of the healthcare spending as a percent of gdp graph. They are both symptoms of the very American ideology that the only way to improve anything is to blindly spend more money on it.

tomjen32• 16 years ago

I doubt that it is an American ideology - it seems to be something pretty much everybody does.

wyclif6• 16 years ago

Yes, but speaking as a citizen of the USA, we spend the most with the least progress to show for it.

Vivtek2• 16 years ago

I question his (somewhat oblique) assertion that people in their 30's are too old to train effectively in new skillsets.

Encosia• 16 years ago

Absolutely. I'm in my 30s and haven't noticed any decrease in my ability to continue learning. It's definitely a challenge to discard your old mental models if/when they start to become hindrances, but far from impossible.

My Mom (nearly 60) went back to school last year to learn occupational therapy, and has been doing great. It's not rocket surgery by any stretch, but it's exactly the kind of retraining that's relevant to the article's assertion.

jimmyjim• 16 years ago

I had a guy in his late 70s in my accelerated Calculus II class this summer at a community college (power series, curve arc length, determining convergence/divergence, etc.) -- with a class full of students from second-tier schools. He was one of the few students to ace every test and exam.

crenelle• 16 years ago

I have 30 years of experience in software development, with a computer science degree from the University of Illinois. I applied for a position at SEOmoz a few months ago. No phone screen interview. The CEO's comments seem to imply a very selective criteria was used to hire, and that it took them months. We don't know what criteria was used by SEOmoz to hire those candidates. I found his comments regarding older people slower to learn new stuff "enlightening".

azanar4• 16 years ago

It's definitely a challenge to discard your old mental models if/when they start to become hindrances, but far from impossible.

I think this is actually the most important skill one develops by constantly reading up and playing with new technologies and languages. Just as mathematics is as much about learning to reason about things as it is about the particular theorems you prove, learning about technologies and languages and ideas is constant exercise for your brain to absorb new models and reconcile them with ones it has already internalized. Discarding old ones isn't a big deal, because you've been doing that almost continuously anyway. But, like everything else in this discussion, it requires a certain amount of willpower and ability not to take one's own comfortable position for granted.

techiferous2• 16 years ago

It's just patently absurd. First of all, a person who is 35 expects their body to live until they are 80 but throws in the towel on learning new skills because their brain is broken? And what about the requirement that the president be at least 35...if he/she isn't able to learn new skills? And then, most importantly, where's the data? I don't observe that people in their 30s and 40s have trouble picking up new skills.

techiferous2• 16 years ago

Original quote for reference: "but for workers in their 30s, 40s and older, learning new skills is extremely challenging (humans simply don’t learn as well or as quickly as they get older)."

Apparently the author realized his mistake and redacted this from the blog post. Kudos.

ScottBurson2• 16 years ago

-- His mistake being that he was putting himself at grave risk of a big fat lawsuit.

civilian• 16 years ago

My Professional & continue education Python course has 30 people in it and I'd say that the average age is mid-30s. My friend and I, at 25 and 23, are the youngest in the class.

(Why are my friend and I so young and are re-training? Well, we got out of college and realized that our English & Biochemistry majors suck.)

azanar4• 16 years ago

I'll make a tangentially related assertion that I think is a bit more defensible: people tend to become increasing resistent to training in new skillsets as a function of their age.

Like you, I think they are perfectly capable; the problem is motivation. The longer someone has been doing something, the more it becomes a comfortable habit. Not just in economic skillsets, but in most everything, people will rabidly defend comfortable habits, to the point of declaring that society should be forced into steady state if that is what will keep them comfortable. Every human interest story we hear of someone who saw their industry vanish out from underneath them, and then they indignantly plant their feet and declare that we must bring their industry back is an example of this.

We become resistant to change, but I do not really believe this is an inevitability of age; I think it is something that we societally accept from older people far more than we do from young people. They've worked hard their whole lives, they deserve us subsidizing the comfort they now deserve as a result. Young people haven't worked hard for long enough yet, and so they not only don't deserve comfort, but we should steal away the comfort they do have to pass to the older generation that has earned their stripes.

Accusations fly in all directions, each group screaming to the other that they are the entitled ones, and that all this group wants is fairness and consideration. It's ridiculous; they are all caught up in a sense of entitlement, and all participate in an economic system that fundamentally doesn't care what they think they deserve. No matter who you are, you will never get what you think you deserve; best leave this sense of deservedness at the door, and realize there is a large random component to all of life's happenings.

You might not deserve, in some existential sense, to lose ten straight poker games holding a flush or better, but the worst thing to do if you do is get indignant and either declare the game is rigged, or try to rig it yourself.

So, agree with Vivtek; people in their 30s are more than capable of learning new things. But capability is orthogonal to willingness, and along that vector I think we have a lot of motivating to do.

wccrawford• 16 years ago

He is 1 step away from saying that the government should be telling people what education to take, and what jobs they'll fill. (Remember Gattaca?)

Some industries (not all!) have a shortage of workers. This has -always- been the case. Each generation feels a different pull when they are children, and so has different goals for later in life. We even encourage children to pick a career in Elementary school! By the time they are out of college, the job market has had 15 years of changes. It's no wonder that the jobs available and the skills that people trained for aren't a match.

Is there a solution for this problem, other than the government ordering people around? Not that I see. I think the system is working as well as it can while not encroaching on people's freedom.

1 final note: It's a LOT easier to find people for jobs if you offer better salary. Nobody ever mentions that when they're complaining that they can't find people to hire. Instead, they blame the 'market' or the 'government' and keep their offered salaries low.

randfish• 16 years ago

That certainly wasn't my intent - I was just brainstorming a list of ways one might fix the shortfall of math/science/engineering professionals.

Salaries: Maybe we're still low, but looking at http://gigaom.com/2010/11/10/stat-shot-the-results-of-silico... - we're paying between 10-20% above these figures (generally) for our engineers, so I suspect that's not the case.

terra_t4• 16 years ago

Rand, your post is repeating the same garbage about job training that's been universal for the past 30 years (See "The Job Training Charade" by Gordon Lafer,) with a little dash of age discrimination just so you'll fit in with the hacker news crowd. (I know a lot of people who are in their 30's, 40's and 50's who've successfully learned new skills)

Communications of the ACM has hand-wringing articles in every issue about "Why don't students want to study CS?" They never mention the elephant in the room -- that these students are hearing from computer professionals in their 30's and 40's who all of a sudden find they are working a dead end job.

There's a huge demand for inexperienced out-of-college engineers that will work for cheap (for instance, equity that probably won't materialize), not demand health insurance, and work 80 hours a week on "charge of the light brigade" projects that lack any semblance of project management. There's very little demand for experienced engineers who realize that management is full of it.

There's no educational institution that produces people with the skills it takes to develop today's web sites. Often CS graduates get a bunch of 20-year old pap about algorithms and never learn a thing about project management, modern distributed systems, and all the little details from CSS to the management of social systems. People get those skills working in the school of hard knocks, and a lot of those people (like myself) have been doing it for 15 years and we're not going to take crap from anybody.

When it comes to inequality, it's dawning on people that higher ed is part of the problem, not part of the solution. The few remaining "good" and "secure" jobs in this country are open to people who graduate (as undergraduates) from Harvard and Yale. The entrance of women into the workforce has doubled the opportunity of employers to play out their racist and classist impulses.

earl• 16 years ago

First, if you're paying in comparison to those charts, in the SF area you aren't paying anywhere near well enough. Good devs with 5+ years of solid experience go for $100K+.

Second, this exact point has been discussed between you and patio11 before. If you think you're paying excellent wages -- 10% to 15% above market -- and still having trouble hiring, then I'd like to repeat patio11's suggestion that you are mistaken about either the wages of the quality of the job you're offering.

JoachimSchipper• 16 years ago

In fairness to the author, engineers of all stripes have been in demand for a long time, and English majors or people without any real education have always had trouble finding a job.

Yes, the 15-year lag presents a very real planning problem, but that doesn't mean that the current distribution of pupils creates the highest possible employment/value.

wonderzombie• 16 years ago

"1 final note: It's a LOT easier to find people for jobs if you offer better salary. Nobody ever mentions that when they're complaining that they can't find people to hire. Instead, they blame the 'market' or the 'government' and keep their offered salaries low."

This is something I see over and over. You'll a NYT article or whatever about how this or that business is _totally_ hiring! And then they mention what they're offering in terms of pay, and it's no wonder.

In times like these, companies can offer less pay and rely on people being grateful that they have jobs. There's no real security beyond "I have a job right now," but you've got paychecks for now. Commensurate with that, companies offer less pay and fewer benefits to new hires.

My guess is that a substantial number of people find these offers laughable and, structuring their lives around what the role used to be worth (e.g. children, aging parents, mortgage), they can't afford it. However, it costs a company next to nothing to leave those offers open.

StrawberryFrog2• 16 years ago

It's a LOT easier to find people for jobs if you offer better salary

If there are 200 openings for people who "must have 5 years of java" (pick a different buzzword/skill each year) and only 100 qualified people, can their salaries reach a reasonable equilibrium level, or will they spiral up?

You'll get the situation where there's a tacit understanding that people who put "5 years of x" on their CV actually only have 2 years and enough intelligence to fake it until they make it (hopefully); which is not healthy either.

Multiplayer• 16 years ago

I never understand the hiring requirement of a degree for a startup - that is a silly way to hold your company back. The best coders and designers I have worked with have either had no degree or have an irrelevant degree. Skilled people with sharp minds will train themselves to do the things that interest them.

davidamcclain• 16 years ago

I'm a self taught designer/developer, not a genius but pretty competent with some useful skills. No CS or Art/Design degree so a lot of companies (start-ups included) will dismiss me out of hand rather than for my own merits and failings. And as the saying goes, I know some really dumb people with some pretty great degrees.

I agree there's value to a degree (any and all degrees I mean) and there's certainly some painful ineptitudes in my self-taught skills which I might not have if I did a CS or Art/Design degree. My point is that just requiring a degree seems somewhat arbitrary. It doesn't tell you if I scraped through and don't really understand the subject or if I'm the next Woz. It doesn't tell you if I know how to ship or if I'll need constant hand-holding for the next few years.

aphexairlines3• 16 years ago

300 resumes arrive in your inbox and you need to narrow those down to a few, since you don't want to spend all your time interviewing. Are you more likely to prefer the ones who have been vetted already? Probably.

JSig2• 16 years ago

The BLS does a TERRIBLE job of managing the unemployment stats. The birth/death model just does not work at cycle changes. For a detailed look at these issues check out Mish's many posts at http://bit.ly/9yjUjN

Additionally, there is something going on beyond a flawed model. From zerohedge.com => http://bit.ly/b5AJsz

"Readers may be surprised to discover that beginning in April, of 2010, continuing through today, there have been 22 out of 23 consecutive upward prior weekly revisions! In other words, the BLS has a definitive mandate to underrepresent the "current" weekly data and to allow it to catch up with reality once it has become "prior", and thus no longer market moving, when in reality should the BLS present true data it would have likely missed estimates on more than half the occasions it has "beaten" and caused ridiculous market spikes like the one experienced earlier. Furthermore, combining all individual weekly data, demonstrates that the BLS has underrepresented initial claims by roughly 80,000 year to date."

Check out the post for a nice chart.

rbranson2• 16 years ago

Disclaimer: zerohedge is a bunch of hysterical Austrian economist nutcases.

SkyMarshal3• 16 years ago

Ad hominem, try again.

tbrownaw• 16 years ago

They're definitely nuts, but I hadn't noticed that they were any particular flavor (Austrian or otherwise).

Natsu• 16 years ago

Why did you use bit.ly to shorten those URLs? This isn't Twitter.

http://bit.ly/9yjUjN -> http://www.google.com/search?q=site:globaleconomicanalysis.b...

http://bit.ly/b5AJsz -> http://www.zerohedge.com/article/charting-statistical-fraud-...

JSig2• 16 years ago

My apologies. Thanks for making my hyperlinks work.

motters• 16 years ago

This article highlights something which I think will become a growing issue. Higher education is becoming prohibitively expensive for many young people, and often doesn't deliver (and isn't intended to deliver) the sort of training which employers seem to want. There's a need for better and more accessible vocational training, but at the same time a reluctance from government and employers to get involved with it - both seeing it as someone else's responsibility.

Probably this is an opportunity in disguise for some new kind of vocational training system to emerge.

candre717• 16 years ago

While it might be a new opportunity, I think there is too much lobbying in Washington to protect the interest of the status quo and not the students'. Education is a big money machine, and since there's enough groups and individuals who want to keep it as is, it may very well stay as is.

We live in a world that has outgrown the current education system.

robryan3• 16 years ago

I do think that vocational education in terms of job ready skills does need to be separated in some way from a theoretical university education which isn't designed to what employers want. The problem is I don't know if universities could afford to maintain the more traditional form of education while also offering vocational training.

reynolds• 16 years ago

I'm not sure that I agree with the claim that retraining someone for a short while can place that person at a similar level of mastery as his or her high-tech peers. It may work for entry level positions. And even then they may not have the same motivations as someone devoted to their craft.

pedanticfreak• 16 years ago

If you can teach high school students to be decent programmers surely you can teach a intelligent art history or English majors as well.

Solution: Hire anyone intelligent to do the job for a fraction of the pay. They learn a new skill and you avoid paying a premium for hard to find skilled workers. You also get fiercely loyal employees instead on entitlement filled prima donnas.

space-monkey2• 16 years ago

A high school student probably has much less to unlearn than some Art History and English majors. Not to say that there aren't great people that have come from those backgrounds, but some highly intelligent folks come out of there with a bad attitude towards concepts like objective reality.

aphexairlines3• 16 years ago

> "entitlement filled prima donnas."

Where is this coming from?

ianb2• 16 years ago

None of the hard-to-fill positions could be filled by someone with "training" - those are positions that require experience and talent. Both of those can be cultivated (I'm not so pessimistic to believe they can only be imported, or are formed by a population of fixed size), but training/education isn't going to do it. Which is maybe the fault of education, or maybe it's just that we ask too much of education. But try-harder techniques (like increasing funding) won't result in the qualitative changes to make training a problem-fixer.

josh33• 16 years ago

I agree. I think people need to try harder to improve their situation. But that's easy for me to say because I'm employed. Maybe one creative (okay, not that creative) solution is for people who are employed to try harder to help those who are not so fortunate. If we have the training to keep income coming in and food on the table, certainly we have the ability to train others.

Although this will not generally directly benefit the trainer financially, it can help the overall situation of a community which benefits the trainer in the long-run. Plus there are the non-monetary benefits of helping someone less fortunate.

lotharbot• 16 years ago

Not that long ago, I read several quotes along these lines:

"We have plenty of openings, and we're getting 5 times as many resumes as before, but only half as many qualified applicants."

Most of the quotes were from people in medicine, IT, and similarly complex fields. The problem isn't a lack of "training" of the sort that could be covered by a community college course and a 3-month internship; the problem is a lack of "training" of the sort that comes through years of hard work and experience, combined with an entitlement mentality that says "the world owes me a job" instead of "I will develop skills that are useful to an employer, and therefore be able to get a job".

As you say, this is not a problem that will be solved by increasing funding.

space-monkey2• 16 years ago

A corollary to this is that in any complex field that is expanding at any material rate, demand for capable (experienced) people will be higher than supply. There are more jobs than yesterday, so there are more jobs than there were people getting experience yesterday.

robryan3• 16 years ago

One issue I can see is that people can hone their skills on freelancing, open source and learning projects, but when they go for a job they will probably get beaten to the position by someone who better fills the 5 years of industry experience in x.... regardless of skill.

ianb2• 16 years ago

I really feel like apprenticeship could be useful in these cases. It's not like investment in employees, where if they jump ship you lost your investment - there's always the expectation that an apprentice leaves, it's a system built for informant operators.

But to be an apprentice requires more humility than most people are ready to offer - the basic equation is you get training and you pay for it by doing shitwork. Though I guess that's not too much different than an internship, except you work with a master (a person) not an institution (an employer).

okaramian• 16 years ago

Back in the old days companies would hire smart/capable people and train them up.

This mentality works well when you don't expect your workers to leave in under 5 years. I don't really know if this is a good or bad thing, but given the structure of American businesses it doesn't make as much sense to take on a new person, train them, then take the risk of them taking their skill set elsewhere.

gscott• 16 years ago

Now in order to be hired you have to know trivia questions.

chubs2• 16 years ago

Do people leave companies after a few short years because they're job hoppers? Or do companies drive them away with constant focus on profits, redundancies, cutbacks, and all these wonders of modern management? I'm more of the opinion that people 'jump ship' because they're worried that the rug is about to be pulled from under them at any moment by management.

chesser2• 16 years ago

If everyone is competing for the top 1%, you're never going to solve the problem.

And of the people with the skills you want, why should they work at your crappy company instead of starting their own?

Try this on for size: "Here, I'll give you a salary and maybe a tiny fraction of equity to come work at my company. But you're over 30 so you'll need to be re-educated."

Why aren't you jumping at the chance!? Oh, maybe other people feel like you do. Imagine that.

If you want to hire talent, you need to pay for it. If you can't pay, then it's no surprise. (Would you work for me for what you're offering to me to work for you?) If you won't pay, then you're not "desperate for talent", you just have a preference for cheap labor.

You're not entitled to a cheap labor pool just so you can live out your personal aspirations to be a CEO. And I like how you expect other people to pay for all that education and training they'll need.

bigboote• 16 years ago

Only the top 1% of people (by creativity) are useful to creative companies. People in the bottom 99% reduce productivity. So yes, creative companies all need to compete for the top 1%.

chesser2• 16 years ago

That's the point.

Even if that top 1% gets bigger in absolute numbers, there will just be more or bigger companies vying for them, so the problem never goes away.

Even if you magically boost everyone drastically so the average person of the future is equivalent to the top person now, imagine how big an advantage the top 1% will still have.

A company that can't get top people is simply not competing well enough in terms of compensation of whatever sort.

An equivalent article could be written on the problems with employers and what they need to do to meet the requirements of the people they want to hire!

speby• 16 years ago

Maybe offensive but this is perhaps the 12th or 13th article related to income-inequality or Bush tax cuts that I've seen on HN in the past month or two. Frankly, these articles are getting old and I'm seeing almost no new perspectives. Most are written in a kind of, "this is unfair, let's do something about it," tone and the authors rarely have any real basis for understanding how wealth is created (or how the super wealthy sustained their wealth or created such massive new wealth over the past 4 decades). It just sort of gets old to read the same thing and then ultimately, read many of the same righteous comments on here.

Any chance someone is open to some new politics topics instead of this and healthcare?

How about abortion? Immigration maybe? Military spending? Education costs? Unemployment and underemployment?

wheaties• 16 years ago

You'd be surprised at what is being done in the government to reeducate disabled and hurt soldiers. Some of the engineers at my company are working with some 20 veterans who have no training in software. Unfortunately they're being lead and managed by beaurocrats who also have no software experience. It's so awesome to see the kinds of pratriotism displayed but in many things government the effort/focus is in the wrong direction. They should have hired software folk to train these guys and lead them.

canterburry• 16 years ago

I think one of the fundamental flaws with American companies is that someone with "the right skills" means the person is a shoe-in at the time of hire. They are expected the walk onto the job with all the training, know-how, experience etc that the company needs at that very minute.

Since trends are constantly changing and always towards something new and never before seen, there will simply never be a time when there is a bounty-full supply of shoe-in candidates.

American companies need to look for people who are fundamentally smart, able and willing to learn, are problem solvers and have reasoning skills and whom they can shape into the exact resource they need...and then know they can reshape them again when needed. I really believe this will lead to a far more qualified workforce at every company and be a source of renewed loyalty between employers and employees.

Consumerism has driven America into treating labor as any other store bought product which can be easily, quickly and cheaply acquired to fill a momentary need and discarded when trends change.

This is not a labor market problem, it's a problem of approach and mentality in staffing and HR.

Look at the really successful companies out there and you'll see they hire fundamentally smart people, everything else can be learned.

klbarry• 16 years ago

"...it's a problem of approach and mentality in staffing and HR"

This seems to go deeper than that - in economics class, they teach that labor is always an easily variable input, that can be changed more or less instantly. Especially after reading about the effect of all "A" people in a company, it seems to me that economics is still stuck in the thought of labor as factory workers or the like - not modern thought workers. You can see how this thinking could influence company hiring practices.

On another note; Maybe the real shortage we have is of people "who are fundamentally smart, able and willing to learn, are problem solvers and have reasoning skills"? I don't think so personally, but it's possible.

ataggart• 16 years ago

And in physics class they teach that all planes are frictionless.

Please don't disparage an entire field of inquiry simply because you either had a crappy econ class, or missed the point of simplifying assumptions.

StrawberryFrog2• 16 years ago

I think one of the fundamental flaws with American companies is that someone with "the right skills" means the person is a shoe-in at the time of hire.

I don't think that it's a uniquely American problem. It's just like that in IT in London, UK.

arethuza• 16 years ago

It's endemic in a lot of companies in the UK - I keep having arguments with non-technical managers about their insistence that people have to "hit the ground running" with a very narrowly defined set of skills (which usually turn out to be wrong).

The same people who take this approach to hiring then complain when developers get stroppy about only working on specific skills that will get them their next, better-paid, job.

codexon2• 16 years ago

That's not an American problem. It is a global problem.

100 years ago you got job training. Then you had to pay colleges the privilege filtering you or your colleagues out for the companies. Nowadays even that is not enough, and businesses are demanding 2-3 internships because people are desperate enough to push all the costs of job training onto themselves.

It is a welcome change for many businesses, but the result is that too many people choose a field by accident. Then they have effectively wasted X years and X dollars. As a business, you don't foot the bill of training a potentially bad worker/student, but the entire society loses total productivity.

codexon2• 16 years ago

Clarification (since I can't edit my comment anymore):

Businesses should foot the cost of job training to prevent supply/demand mismatches where thousands of people spend 4+ years preparing for a job they never get hired for.

Why? A business is much more in tune with market demand than students following the flavor of the year and end up being edged out by 0.1 GPA or being the 101th person in a market that can only sustain 50 new workers a year etc...

enjo• 16 years ago

This is another great opportunity to point out something rather puzzling about this recession.

If you have a college degree your unemployment rate is 4.7%, with a big chunk of that 4.7% in the building related fields (architects, civil engineers, etc... are having a tough go right now).

http://www.bls.gov/cps/tables.htm#monthly

It's a double digit unemployment rate if you just have a high school diploma. Meanwhile manufacturing output has actually increased dramatically, without adding any significant jobs. That's what I find scary. The U.S. is the worlds leading manufacturer (I'm having trouble finding data from 2009, but in 2008 we we're the largest manufacturer by a wide margin). Yet, manufacturing jobs are way down. I'm not sure those jobs are ever coming back. We've gotten crazy good at automation. Until the cost of human labor in the U.S. decreases by a rather large percentage, we'll continue to build ever more sophisticated systems for building things.

I'm not sure what that leaves us with.

wyclif6• 16 years ago

I hear you. I'm an unemployed land surveyor re-learning how to program with Python (I learned BASIC and C in high school). So far I'm loving it and wish I'd never been sidetracked into such a dead-end industry. One way of making lemonade from lemons for me is thinking that at least there is some engineering crossover between the two fields. That's what I tell myself on a good day.

corprew• 16 years ago

actually, there's huge opportunity in GIS right now where your skills would probably be really handy.

IgorPartola• 16 years ago

The problem is that our current economic system is not ready to deal with such a high productivity level. With technology advancements eliminating entire job classes virtually overnight, in our lifetime we will reach a point where there will be way more people than necessary jobs; and the economic system will have to adapt. Two simple (not easy) solutions that come to mind are artificial population control or a different resource diatribution model.

dhh• 16 years ago

I'm sure people thought like that when agriculture got automated and didn't need as many people any more. Higher productivity shifts people from industry to industry. There's often a lag between the death of one industry and the rise of another.

ScottBurson2• 16 years ago

There's another solution: massive differentiation of the economy. I think this is already starting to happen (witness the success of YC). Entirely new categories of products and services are springing up, many of which are meeting plenty of demand. In the new wired world, information about these new products and services can travel fast enough for them to serve distributed clienteles; this makes them much more viable than they would have been as local businesses. In short, the long tail of business models has opened up. It is a time of mind-blowing opportunity, but the opportunities demand creativity. It's not enough to do what somebody else is doing; you have to find another workable point on the long tail.

3pt14159• 16 years ago

That is a clearly predictable outcome of overzealous regulators and labor unions. When overhead, risk, and direct cost are raised a business will rationally shift more resources into automation and electronics. The increase in price of unskilled labor means that the supply and demand curves don't actualize and what you get is less consumption of the resource, actualized through higher unemployment rates.

This also means that highly skilled people become more in demand because they are the ones that are capable of designing and implementing these systems.

Unleashed unskilled labor in a low cost country such as China doesn't help the plight of the unskilled labor force in America/Canada either. Especially with the artificially low Chinese currency.

biafra• 16 years ago

Basic income could be the solution to the unemployment problem caused by automation and higher productivity per person:

http://en.wikipedia.org/wiki/Basic_income_guarantee

zaphar• 16 years ago

I've been thinking about some of this for a while. Someday I'd like to try an experiment where companies ignored College education and up but recruited at the High School level with the intention of taking someone from Intern to Highly Skilled worker. Something like the apprenticeship model from the past. In some ways I think College and Post-Grad education is overkill for some careers and an apprenticeship/intern model would be superior.

Unfortunately I'm not the Founder/Entrepreneur type so I'm unlikely to ever own my own company to try the program out in. Maybe I'll be able to convince an employer to try it someday.

wyclif6• 16 years ago

I hear you, and you know I agree with you on this point, but the naysayers (mostly employers, it seems) will shoot that down with, "We already know the apprenticeship model works, but we can't afford to implement it in a culture where the average American worker changes jobs every 6, 7, or 8 years. Essentially we'd be training our competitors, and we can't afford that."

I myself have benefited greatly from the apprenticeship model-- up until very, very recently (for example) there was no other way to become a land surveyor. You had to actually apprentice, in the formal sense, with a licensed professional to get on the career track and achieve the minimum level of years of experience and then sit for the licensure exam.

prodigal_erik• 16 years ago

Why is apprenticeship so prevalent for that profession, compared to others which seem similar (at least to this outsider)? Is it the amount of hands-on field work? The number of potential students to support a classroom?

chubs2• 16 years ago

If everyone only wants to hire 'the best', the jobs market will soon end up the way of the metaphorical bowl of jellybeans: only the aniseed ones left, which nobody wants to eat. Why not employ people who aren't what you want yet, and, here's a thought: train them up!

andre3k1• 16 years ago

This has a very specific name in economics: structural unemployment.

http://en.wikipedia.org/wiki/Structural_unemployment

To my surprise, the author made no use of that term.

Worth checking out the Wiki if your interested in reading more on the phenomenon.

skybrian• 16 years ago

It's an opportunity for a business that can somehow put non-highly-skilled people to work and make a profit doing it. But startups don't usually think that way. Everyone wants to work at a place that sets a high bar for hiring.

natrius2• 16 years ago

This is really just taking one person's (or one industry's) hiring issues and painting them as the cause of the entire economy's problems. If you actually ask businesses what their concerns are, slow sales come in way higher than a low quality labor pool.

http://krugman.blogs.nytimes.com/2010/09/20/structural-imped...

Yes, there are probably sectors that need more employees. Yes, there are probably people whose old jobs have disappeared. That doesn't mean that structural unemployment is necessarily a significant factor in the economy's current problems, and there is considerable evidence to the contrary.

The irony of the US economy: no jobs and no one to hire

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