Guest Post: The Future Of Jobs
Submitted by Charles Hugh Smith via ChrisMartenson.com
The Future of Jobs
That the American and global economies are being transformed by the forces of globalization, demographics, and over-indebtedness is self-evident. What is less self-evident is the impact this transformation will have on the future of work, earned income, and financial security.
The key question an increasingly vulnerable workforce is asking is: What skills will be in demand once this transition occurs?
In order to answer this question, it's necessary to understand the macro trends that will shape the nature of employment in this new era. In our previous look at The Future of Work, we focused on the US economy’s dependence on debt as a driver of growth and found that debt saturation was correlated with declining employment. But there are many other long-term dynamics influencing the economy, and no survey of the future job market would be complete without considering these other factors.
The Trends That Will Determine the Future of Jobs
Most cultural and economic trend changes begin on the margin and then spread slowly to the core, triggering waves of wider recognition along the way. Thus some of these long-wave trends may not yet be visible to the mainstream, and may remain on the margins for many years. Others are so mature that they may be primed for reversal.
The key here is to be aware of each of these, think on which are most likely to impact your current profession and how, and estimate when that impact is likely to be expressed so that you can position yourself wisely in advance:
- Automation enabled by the Web continues to eliminate or reduce the role of human labor in production and services. The low-hanging fruit may be gone, but labor-intensive industries such as health care, government, and education are ripe for software/Web automation and streamlining.
- The cost structure of the US economy—the system-wide cost of housing, food, energy, transport, education, health care, finance, debt, government, and defense/national security--is high and rising, even as productivity is lagging. This reflects the growth of "friction" in the economy—unproductive expenses that add neither value nor productivity.
This high-cost structure drives the cost of labor ever higher, even as employees’ share of compensation stagnates. For example, if health-care costs rise 10% a year, the employer must reap 10% more surplus from labor to pay the higher compensation costs, while the employees see no increase in their take-home pay.
Rising systemic costs make employers wary of hiring more workers unless they create enough surplus value to keep ahead of the rising systemic costs and generate a return on investment. In low-productivity, high-cost basis economies like the U.S., the incentives shift from expansion to reducing labor costs by via automation and replacement of stable workforces with flexible freelance contract labor.
- The stress of operating a small business in a stagnant, over-indebted, high-cost basis economy is high, and owners find relief only by opting out and closing their doors. I call this exhaustion and loss of faith “when belief in the system fades.” Pundits may speak of our fraying “social contract,” but small-business owners increasingly feel betrayed by a system that constantly increases the burdens on enterprise at every level.
Much of Main Street America is stuck in two unenviable roles: tax-donkeys saddled with ever-higher taxes and fees, and/or debt-serfs working just to service crushing debt. Many are planning for the day they escape the burdens of enterprise by shutting down their business.
- The Central State has been co-opted or captured by concentrations of private wealth and power to limit competition and divert the nation’s surplus to Elites within the key industries of finance, health care, education, government, and national security. The rising friction within these vast systems is distributed over the entire economy via cartels and taxes, raising costs in every sector and lowering the nation’s productivity.
As a result of central State intervention and politically expedient controls, the prices charged for these services are “sticky,” meaning there is little to no market pressure to lower prices, as competition has been largely eliminated by collusion, cartels, and/or government control.
At some point, these top-heavy, protected industries will experience a “stick/slip” event in which their fixed pricing and funding will collapse once the dwindling productive economy can no longer support this enormous dead weight of unproductive friction.
- Financialization of the economy has incentivized unproductive speculation and malinvestment at the expense of productive investment. Financialization has been driven by low interest rates and abundant credit for speculation while credit for capital investment is restricted. In the boom years, money was effectively diverted into consumption such as luxury McMansions while the productive segments of the economy stagnated.
The direct costs and lost opportunity costs of zero-interest rates and malinvestment have been spread over the entire economy, as income that once flowed to savers was diverted to “too big to fail” banks and speculators. Speculation creates vast profits for financial Elites and a modest number of service jobs catering to the Elite: clerks in luxury retail shops, personal trainers, dog-walkers, etc.
- The U.S. economy has bifurcated into a two-tiered regulatory structure. Politically powerful industries such as finance, education, health care, oil/natural gas, and defense benefit from either loophole-riddled regulation or regulation that effectively erects walls that limit smaller competitors from challenging the dominant players.
Enterprises outside this politically protected circle are treated as adversaries by state and local government regulatory agencies.
- Selective globalization and political protection has created a two-tiered labor market in the US. Industries exposed to direct competition from low cost-basis economies with low labor costs must either close, automate or rely on minimum-wage immigrant labor. At the top end, global corporations are increasingly hiring talent in their offshore markets. Jobs, which remain in the US at the top tier of global companies are well-paid, but increasingly insecure.
The domestic industries that cannot be outsourced (education, health care, government, national security) have gained political power as their share of the national income has increased, and their domestic position astride the economy has been enhanced by political protection. As a result, the pay scales in these sectors are much higher than those in globally exposed private sectors.
These industries have thrived as Federal government spending has continued via borrowing 11% of the nation’s GDP every year. In this sense, these domestically protected industries are prospering at the expense of future taxpayers, who will be burdened with servicing this stupendous debt that has been taken on to fund these politically protected sectors.
- Financialization and the two-tiered labor market have led to a two-tiered wealth structure in which the top 10%'s share of the nation’s wealth has outstripped not just the stagnant income and wealth of the lower 90%, but of productivity, the ultimate driver of national wealth. This trend towards concentrated wealth also plays out in the top 10%, as the share of national income flowing to the top 1% has outstripped the wealth growth of the other 9%.
These trends are all visible and well established. Looking farther out, there are emerging trends I call “the five Ds:” definancialization, delegitimization, deglobalization, decentralization and deceleration. Though these may not be visible to the mainstream just yet, they will slowly influence the job market and our definition of work.
- Definancialization. Resistance to the political dominance of banks and Wall Street is rising, and the financial industry that thrived for the past three decades may contract to a much smaller footprint in the economy.
- Delegitimization. The politically protected industries of government, education, health care, and national security are increasingly viewed as needlessly costly, top-heavy, inefficient, or failing. Supporting them with ever-increasing debt is widely viewed as irresponsible. Cultural faith in large-scale institutions as “solutions” is eroding, as is the confidence that a four-year college education is a key to financial security.
- Deglobalization. Though it appears that globalization reigns supreme, we can anticipate protectionism will increasingly be viewed as a just and practical bulwark against high unemployment and withering domestic industries. We can also anticipate global supply chains being disrupted by political turmoil or dislocations in the global energy supply chain; domestic suppliers will be increasingly valued as more trustworthy and secure than distant suppliers.
- Decentralization. As faith in Federal and State policy erodes, local community institutions and enterprise will increasingly be viewed as more effective, responsive, adaptable, and less dysfunctional and parasitic than Federal and State institutions.
- Deceleration. As debt and financialization cease being drivers of the economy and begin contracting, the entire economy will decelerate as over-indebtedness, systemic friction, institutional resistance to contraction (“the ratchet effect”), and political disunity are “sticky” and contentious.
While these trends will cause harsh disruption to the Status Quo economy resulting in job loss and/or lost relevance for many of today's workers, there is good news here for those who remain flexible, open-minded, and adaptable. For those individuals, making the best use of the gift of having time to re-focus and re-skill professionally -- while the shock waves have yet to hit the Status Quo in earnest -- should be a top priority.
In Part II: The Skills Most Likely To Be In Demand, we explore the opportunities that this long-term transformation opens for those willing to adapt to the new realities of "work", including the business models that are likely to thrive, and what type of skills will offer the greatest job security.
Click here to access Part II of this report (free executive summary, enrollment required for full access)
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Those days of working 40 years at the same place are over....
Unless you be workin for .gov.
That's for sure!
The only sector of the economy that's expanding right now is the Federal Government sector. Every other sector is contracting, with manufacting contracting the greatest amount!
The whole economy is imploding, soon the dollar will collapse and then everything will really go to sh*t!
-John
How to get started in amateur radio
http://johnu78.blogspot.com/2011/11/how-to-get-started-in-amateur-radio.html
Amateur radio will be a valuable skill in the future. Thumbs up.
Reminds me of this saying:
One word: Prison.
Reasons: Growing population, dwindling job market, growing wealth gap, faltering economy, growing discontentment, overreaching government on a mission to take away the remains of our so-called liberty...the list goes on and on and on.
So, open up your own detention facility or go work for one.
That's so utterly jaded, dear lord.
Jaded? Yes, but true.
Get a Ph.D. in gravedigging.
That'll be the most demanded profession in the nearby future.
Digging or filling?
Can you run a back hoe? I mean come on..........
Only radical, new ways of thinkning will get us through and beyond this mess.
De-construction before re-construction.
ORI
/the-plan/
prisons, yes, and robo-cops for enForcement of all the new laws that will be broken.
oh, and to help dis-appear all those new enemy combatants across the street as newly defined by the National Defense Authorisation Act.
I'm guessing you either help dis-appear 'em, or be prepared to go yourself. . .
Since we are talking about Jobs, a Very relevant subject is what is going on with all the job losses.
Can't just grow State/Gov jobs and think everything is good.
Yes, as will gunsmithing.
Don't forget reloaders. They will be generating repeating customers.
...and funeral services.
The funeral services are already planned for. FEMA coffins
http://www.youtube.com/watch?v=1FnZLx8J4oM
And, Taco Bell will be fine dining
I'm trying to figure that one out. Ya push in a button, then you talk into a mike. WTF?
You might want to reconsider that statement about the federal gubbmint...
http://www.opm.gov/feddata/HistoricalTables/TotalGovernmentSince1962.asp
Oh yeah... can't let facts get in the way of what your ideological bias tells you to be true...
you are a blowhard asshat.... go away and educate yourself.
Now now Flagmaster. Be tolerant. ZH is all about tolerance.
FU, doggie butt.
I only knew of Mynhair as a friend! There was NO affair!
What happens in prison should stay in prison.
I am very tolerant except when it comes to misstatements and getting facts straight...
We got to where we are in this country by ignoring facts and letting ideology tell us what the answer should be....
By all means blast away at the gubbmint, but at least have something defensible to argue....
Being correct and being a prick are two different things.
The problem is the pricks that are wrong...
What is ideology?
Total numbers are not the only issue. Ridiculous compensation, fringe benefits, and the strangling of the private sector are what have the country very angry. Consent of the governed and all that jazz.
Look at it this way, Sergeant Flakmeister. The proportion of productive output neutralized by the gov't, Fed and otherwise, has never ceased its expansion from the time of the ratification. All gov't represents wealth consumption and nothing more. It is a drain on the productive activities of society that does nothing to enhance prosperity. At best it is a benign parasite, but its current incarnation is a metastatic cancer which is eating out all our substance. Does that help put your little chart into perspective, sir?
That chart doesn't show government "contractors" which have been increasing exponentially since about 2000, give or take, to hide the true numbers of .gov employees.
Add that number in, and the true scope of .gov becomes eye-popping. About 60% of the people now rely on a .gov paycheck of some kind, whether it be fed, state, county or local.
That's the problem. Zero production.
+1 JP Morgan Chase actually runs the food stamps program in the USA. .gov subs it out to them.
Most of the .gov actual workings are run by sub contactors (read: $60k total compensation) who are pimped by "small disadvantaged bsinesses" (read: paris hilton is a wee little girl in charge of the small family business) who are themselves subbed out by defense industry umbrella contactors, who are hired for the work by some current or former politicians' close relative/donor who is the actual .gov employee.
. . . each skimming the fat off the payments as they trickle down.
which is why the 'Bamer says "Since congress can not get anything done I am going to make sure small busineses get payroll tax deductions for each employee"
So as you said, the "cut" that 3 layers of flesh peddlers get will not be on the table for taxation. Meanwhile, on the other (John McCain - R) side of bizzaro town,
http://www.washingtonpost.com/world/national-security/chinese-counterfeit-parts-found-in-us-weapons/2011/11/07/gIQAQGh7wM_story.html
And it's not because they're all lazy no-good parasites... for fucks sake... we are undergoing a paradigm shift, but we have utterly failed to address what to do with people during the shift, from a society bound to an economy, to a society that will be bound to surplus production and lack of economy. We have unemployed people because there is not enough work, in the hyper efficient world we've created. Instead of planning for this ripe moment, you fuckers want to chastise the poor slobs who were the first to encounter the shifting landscape.
Realize that you will be joining them. It's only a matter of time. I'm ready. Are you?
Esso... no real argument... seems like the MIC is in control and the feckless Congress won't initiate a draft to maintain the overseas adventures....
Erm... that table shows a clear expansion of Federal government employment since 2007:
(from page, figures in thousands)
Year Executive branch civilians Uniformed military personnel Legislative and judicial branch personnel Total Federal personnel
2007 2,636 1,427 63 4,127
2008 2,692 1,450 64 4,206
2009 2,774 1,591 66 4,430
2010 2,776 1,602 64 4,443
So you believe everything the gov't tells you? That's your first mistake....
Well, as your OMB table shows, it has been expanding since 2007, so I think you proved his point.
Hmmm, who has the idealogical bias?
Look at the trend from the 1960's and normalize by population growth... year to year stuff is in the noise. The dominant trend is that it is a decreasing fraction....
you mean a chart like this?
http://pithocrates.com/wp-content/uploads/2011/08/Population-Growth-vers...
Full page http://pithocrates.com/2011/08/25/lessons-learned-80-a-nations-government-spends-too-much-when-its-spending-increases-at-a-rate-greater-than-its-population-growth-old-pithy/
Come on, Flak, what's a little sophistry amongst friends?
The posters fault was not in getting the facts wrong, but that in this Internet Age it is inexcusable for someone not to link to some blogger who pulls convenient and corroborating 'data' and 'proof' out of his arse.
Nice chart. Doesn't include Private Contractors that work on projects for the Feds. One government employee I know currently supervises the activities of 25 Private Contractors. At least in the case of DOD, the Clinton/Gore "Re-invent (downsize) Government" initiative enabled the hiring of millions of Private Contractors, which of course, are not "on the books" and not cited in official numbers reported by OPM. Not to worry though. The Defense Contractors are happy. They get a contract, then hire a bunch of "temps", called self-employed private contractors, to work the project and don't have to pay them retirement or other benefits like they did in the good old days. It is a Win-Win deal for Big Government and Big Defense Contractors.
so i have to ask my government daddy for permission to talk on my radio. gtfo............
All my friends in the 'hood are doin' okay. We got jobs, good jobs and good pensions and health care, too. If you wanna join us for a party tonite, come to the large White house on the mother lawn with the long driveway. You can't miss it .
What part of government! Im in the military and they are downsizing. I am not seeing workcenter fight over bodies like zombies in the movie I am Legend
40 years working for the government ? Are you crazy.
We're heading for government employess retiring at 40 (years of age)
yes and they make excellent yardmen too......
Carlye Groupie
"Unless you be workin for .gov."
The only Gov jobs that will be given are BLOW jobs
There will be no non-govt jobs with the muslim or puppet replacements like Newt, Mitt, etc.
Ron Paul is it followed by Santorum and Bachmann.
Health Care. Politically protected. A massively subsidized "vampire squid" industry that is sucking the lifeblood out of the economy. Not mentioned.
Thse days were over 20 years ago....
Those days of working 40 years at the same place are over....
As are the days of buying a home. A mobile workforce must be mobile so renting a house will be the new normal. The only people buying homes will be renting them out.
I know you guys are focused on the charts and your jobs, but have you read this???
Federal Reserve Warns Banks Too Big To Fail
http://cryptome.org/0005/frs120111.pdf
This is nothing to do with any reality based evaluation and strategy. This is not about too big to fail, this is a banking system being dismantled using false arguments and erroneous logic, to the benefit of the oligarchs / financiers. The new regulatory oversight by the FED will essentially allow them to catastrophically destroy the banks, prevent their survival, force an eventual "rescue" takeover by the FED, so that in the end, the FED and the FED buddy banks - the 5 biggies, will rule the financial world within the US. Now's a good time to protest these changes. The policy is set to start on 12.01.2011. That's 2 days.
... Goldwatch blues x2 ?
NO mention of the biggest things that will influence jobs going forward: energy depletion (peak oil) and global warming.
Worthless article.
Future of jobs in 4 words: "there won't be any". Here comes the Next Depression
http://djia.tv/al-jazeera/oecd-cuts-global-growth-forecast/
There's at least forty years of chin and butt wiping as the Boomers go senile and die off.
Opportunities await!
Bwaney Fwank is on it!
On our Franklins, of course.
I don't care how senile I become, I will never allow Barney Frank to lick my ass.
Today is the only time I ever smiled when I heard he was packin it in ;-)
packing it in? perhaps it would a good idea to not talk about mr frank like that..........
Its the "little things" in life...lol.
Hope nobody in his family has been making calls to ESPN...
After the catatonic state we found you in after last time, I'm not surprised.
Don't think we haven't noticed how you bristle at Elmer Fudd cartoons.
I laugh at seniors and baby boomers who voted for the muslim which has f**ked the rest of their lives. Nice job.
Not that Soros Manchurian plan B McCain was much better. Still Jimmy Carter or Satan would have been better.
Freddie, we get the point that you don't like "The Muslim". You mention it in everyone of your posts. If you believe that one man, Muslim or not, is responsible for this entire mess then I don't think you know what is going on.
Why are you proclaiming your ignorance?
long Depends.
Future of jobs in 4 words: "there won't be any".
Two words: Underground economy.
Well, in theory, prices reset in a depression which is nice if you have no debt. The only problem is prices aren't allowed to reset due to excessive money creation. The end result is an inflationary depression which is a distorted clusterfuck.
$7.00 dollars an hour and live in a dorm over the place of business thats the future.....jobs are coming back!
Hehe
Some of my most fun times were in a dorm.
Thats not so bad.
Make it co ed and the company can avoid the expense of anti suicide netting.
Bankster Hitman
http://hitman.us/
50,000 dollars for a hit.
Expensive, but looks like they do quality work.
Mozillo, Paulson, Blankfein, Prince, Shapiro, Corzine.
I cant afford it. Can we take up a collection?
They take plastic.
did you ever do any streaking?
It won't be that kind of dorm but a Chi-Com style serf dorms for slave workers. 30 people in a small room up at 5 am and work til 10 pm.
I doubt most of us will be that lucky to get those $7 a hour slave gigs.
What kind of drug are you on???
-John
http://www.johnu78.com
Jobs aren't coming back until they go elsewhere first. Minimum wage needs to go down until the average Joe can't afford to eat.
Here in Thailand, the government increased the minimum wage to 300 baht (less than $10 US).....and that's not an hour -- that's per day!
However....
Multinational corporations (greedy bastards that they are) are pulling up stakes and moving to Cambodia where they can paid the equivant of 80 baht per day per worker (or about $2.60).
So at $7.00+ and hour, jobs ain't coming back to the US anytime soon.
Anyway - you can't expect a poor CEO to make less than a few hundred thousand times what the average "trained monkies" make, now can you???
This is the reality that Americans just won't face ... that they have priced themselves out of the mass labour market! America once provided natural resources, produce and manufactures to the world through the sweat of imported labour from the dying industrial economies of pre- and post-war Europe. Now, fifty years of continuous war, social welfare and debt-based growth have given them a false sense of importance combined with a multi-generational sense of entitlement.
Those still clinging onto some desperate hope that the Asians (or Africans, or Martians) will continue to toil in poverty to supply them with imported SUVs, flat-screen TVs and unlimited calories are simply deluded!
Thai workers can live quite well on $10/day -- and Cambodian workers on $2.60/day -- because they don't all swan around in gas guzzling SUVs looking for the next high-calorie feed to take home and lay out on the granite benchtops for their bloated progeny to graze on.
The survivalists on here who are thoughtful enough to have provided themselves in advance with a roof over their heads can probably also live on $2.60/day. The rest just remind me of baby chicks sitting in the nest and squawking loudly for their mommy (the gov, or some dumb employer struggling to feed his own family while employing labour at $20-40/hr) to drop food in their mouths!
Agreed. Solyndra is nothing. The USA cant even manufacture the technology we invented 50 years ago. And places like china/india/cambodia simply cant because it is too outdated. I posted a link above about counterfet parts ending up in our military equipment. The way that scam works is, much of our military electronics runs on old chips. The space shutte (intentially obfuscated) used mil-spec 286 processors that ran at 7 volts instead of 5 volts. The only difference between the chips was a "M" on the end of the etched part number. Instead of getting somebody to buy the license from intel to manufacture the chip domestically, we'll get somebody who buys a bunch of consumer PCs, ship them to china where they are polished up and that magic "M" is historically, acurately, "restored" on the consumer chip. It ends up back in america to a vendor who "wink wink" assumes it is the real deal. Rings out, makes it through the 24 hour burn in and off it goes into a set. 2 weeks later that 5V chip plugged into the 7 volt back plane doesn't hold up too well. I just pray it aint on gear in a hostile environment.
Back to your point. We spend more on our military than the next ten nations combined, but we can not even competitively manufacture 40 year old technology that we invented for the gear that puts oil in the tanks of those SUVs that drive to the grocery to buy packaged food using food stamps for 15% of the populous. I'd ask G.E. to do it, but they are too busy dodging taxes and financing real estate. I'd ask .gov to be more careful about this stuff, but they are too busy catching guys like tim giether on his taxes.
Chris Mattews would say something about american exceptionalism to refute both of us.
I have been studying blacksmithing and will sideline as a ferrier once the collapse plays out.
I'm gonna be a Viking!. Or a Firewatcher.
I just found an old guy near me who built a forge in his garage, and teaches from time to time. I see smithing as a growth industry in the post-industrial world, where people will actually have to repair things, instead of tossing them.
Though I'm assuming a welder will meet most of my redneck metal-engineering needs. Well, at least where bailing wire and duct tape won't work.
I'm working on my alcohol production skills. That has always been a valuable skill, even if it has often been illegal.
And it's too bad Big Pharma's got that opioid pill thing going so strong....thousand acre hemp farms would be bitchin'
how much does a pound go for these days?