Guest Post: The Future Of Jobs

Tyler Durden's picture

Submitted by Charles Hugh Smith via

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:

  1. 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.
  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.
  10. 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. 
  11. 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.
  12. 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.
  13. 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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c'mon man's picture

Those days of working 40 years at the same place are over....

Carlyle Groupie's picture

Unless you be workin for .gov.

johnu78's picture

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!


How to get started in amateur radio

Carlyle Groupie's picture

Amateur radio will be a valuable skill in the future. Thumbs up.

sqz's picture

Reminds me of this saying:

10 years ago we had steve jobs, bob hope and jonny cash.
now we have no jobs no hope and no cash.

Troll Magnet's picture

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. 

VyseLegendaire's picture

That's so utterly jaded, dear lord.  

Ahmeexnal's picture

Get a Ph.D. in gravedigging.

That'll be the most demanded profession in the nearby future.


Teamtc321's picture

Can you run a back hoe? I mean come on..........  

Oh regional Indian's picture

Only radical, new ways of thinkning will get us through and beyond this mess.

De-construction before re-construction.



Cathartes Aura's picture

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. . .

Shocker's picture

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.




The Big Ching-aso's picture



Don't forget reloaders.    They will be generating repeating customers.

Jorgen's picture

...and funeral services.

bigkahuna's picture

The funeral services are already planned for. FEMA coffins

The Proletariat's picture

And, Taco Bell will be fine dining

The Big Ching-aso's picture



I'm trying to figure that one out.    Ya push in a button, then you talk into a mike.   WTF?

Flakmeister's picture

You might want to reconsider that statement about the federal  gubbmint...

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.

Carlyle Groupie's picture

Now now Flagmaster. Be tolerant. ZH is all about tolerance.

Carlyle Groupie's picture

I only knew of Mynhair as a friend! There was NO affair!

GMadScientist's picture

What happens in prison should stay in prison.

Flakmeister's picture

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....


CH1's picture

Being correct and being a prick are two different things.

Flakmeister's picture

The problem is the pricks that are wrong...

kaiserhoff's picture

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.

the PTB's picture

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?

Esso's picture

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.

wisefool's picture

+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.

Cathartes Aura's picture

. . . each skimming the fat off the payments as they trickle down.

wisefool's picture

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, 


The recycled materials used in those parts are often sold overseas through a complex web of suppliers, contractors and subcontractors. And the use of counterfeit parts, Senate staffers said, has at times resulted in millions of dollars in waste, with U.S. taxpayers footing the bill when contractors discover the need for replacements.

Ranger4564's picture

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?

Flakmeister's picture

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....

BigJim's picture

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

krispkritter's picture

So you believe everything the gov't tells you? That's your first mistake....

Doomer's picture

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?

chindit13's picture

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.

Pegasus Muse's picture

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. 

High Plains Drifter's picture

so i have to ask my government daddy for permission to talk on my radio. gtfo............

e2thex's picture

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 .

Mattress Money's picture

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

Kayman's picture

40 years working for the government ?  Are you crazy.

We're heading for government employess retiring at 40 (years of age)


High Plains Drifter's picture

yes and they make excellent yardmen too......

peekcrackers's picture

Carlye Groupie

"Unless you be workin for .gov."


The only Gov jobs that will be given are BLOW jobs