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:

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)

Comments

[lemosbrasil]

The same algorithms: Citi, BOFA, JPMorgan, Goldman and XLF. They could more creative....heheheheh

See here: http://pracompraroupravender.blogspot.com/2011/11/algoritmos-iguais-citi-bofa-jpmorgan.html

[High Plains Drifter]

the mark of cain.

http://www.myfoxatlanta.com/dpp/news/ginger-white-claims-affair-herman-cain-20111127-es

put a fork in him. he is done for............

see how they are setting up gingrich for the run?

[saiybat]

"The time has come for the next great step forward in American politics. It is not a matter of Democrats versus Republicans, or of left and right...but something more significant...a clear distinction between rear-guard politicians who wish to preserve or restore an unworkable past and those who are ready to transition to what we call a “Third Wave” information-age society…

A new civilization is emerging in our lives, and blind men everywhere are trying to suppress it. This new civilization brings with it new family styles, changed ways...a new economy, new political conflicts, and...altered consciousness... Humanity faces a quantum leap forward. This is the meaning of the Third Wave…

Our argument is based on what we call the “revolutionary premise”... The revolutionary premise liberates our intellect and will.

Nationalism is...First Wave. The globalization of business and finance required by advancing Third Wave economies routinely punctures the national “sovereignty” the nationalists hold so dear...

As economies are transformed by the Third Wave, they are compelled to surrender part of their sovereignty... Poets and intellectuals of Third Wave states sing the virtues of a “borderless” world and “planetary consciousness.”

The Third Wave...demassifies culture, values, and morality... There are more diverse religious belief systems.

The Constitution of the United States needs to be reconsidered and altered...to create a whole new structure of government... Building a Third Wave civilization on the wreckage of Second Wave institutions involves the design of new, more appropriate political structures... The system that served us so well must, in its turn, die and be replaced." - Newt Gingrich

I would love to see conservatives vote for him.

[High Plains Drifter]

he knew full well that clinton was giving american nuclear technology to china and he did nothing........the man is a traitor of the first order........he was forced out of office in 1998 because of ethics complaints and maritial infidelity problems........etc..........  is this the best the republicrats can come up with?  

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/28/EDOR1M52I8.DTL

[wisefool]

for the tldr; crowd. google is you freind

Newt Loves his country too much. 3 waves, 3 wives. Impeach that scoundrel Bill Clinton. To distract the masses while Bobby Rubin gets me a million dollar gig at Fannie Mae.

[Cathartes Aura]

oooh yes, you can see where he's steering this behemoth. . .

Nationalism is...First Wave. The globalization of business and finance required by advancing Third Wave economies routinely punctures the national “sovereignty” the nationalists hold so dear...

As economies are transformed by the Third Wave, they are compelled to surrender part of their sovereignty... Poets and intellectuals of Third Wave states sing the virtues of a “borderless” world and “planetary consciousness.”

The Third Wave...demassifies culture, values, and morality... There are more diverse religious belief systems.

whether "elections" happen or not, Newt will be out there chanting his verbiage, implanting those memes as the infrastructure crumbles and the financials burn. . .

until the peoples beg for the global New Third Wave Brave New World. . .Rulers.

(thanks for posting that saiybat, would never have read it otherwise)

[High Plains Drifter]

http://online.wsj.com/article/SB10001424052970204753404577066421106592452.html

hmmm, russians might block supply routes to afghanistan , if we attack syria..............

[FrankDrakman]

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.

Man, their second "fact", and they're already out to lunch. The above is ONLY true is health care costs (HCC) are 100% of labour costs, which is ridiculous. If HCC are 10% of labour compensation, then a 10% rise in HCC is a 1% rise in labour costs.

If you want to know what the future will look like, read any of William Gibson's cyberpunk novels after Johnny Mnemonic. The authors of this piece are fond of the word "bifurcation", but Gibson describes in great detail what the bifurcated world will be like - a small class of creative and/or connected elites who enjoy tremendous luxury, and a huge class of low intelligence, low skilled proles, who live a very few steps above subsistence. (Come to think of it, it sounds a lot like Nineteeneightyfour as well. ) If you're smart enough, you might break out of the masses, otherwise you're doomed to compete with virtually everyone else on the planet for a few crumbs.

And, naturally, as the wealthiest and most privileged societies on the planet, the Western nations have squandered this advantage with unionised schools that systematically punish creativity and independent thinking, and reward submission, passivity, and regurgitation. Feed the boys more Ritalin! The future we're losing is our own.

[Steve in Greensboro]

Again, please give the author's name on the main screen on a guest post so I don't waste time clicking through only to find a note from Chuckles. Thanks.

[High Plains Drifter]

http://www.google.com/hostednews/afp/article/ALeqM5ieH-MbrEFgCS2ShaAxdCkt9-ccDw?docId=CNG.51fd675c802c00ccf6a4fb87f46cd12d.c1

rockets fired into israhole from lebanon..............

oh that is just great...........just great.........

[tim73]

US Constitution said something about right to bear arms...what about right to fly drones? Is that allowed?

Your handgun is about as useless as throwing teddy bears against robo-armies.

[Marley]

What the TPTB want for US citizens:

http://www.bbc.co.uk/news/world-asia-india-15926267

[Franken_Stein]

If you don't think that the Freemasons financed and supported the communist revolution in Russia, then please read this here:

http://www.jyrilina.com/index.php?page=under-the-sign-of-the-scorpion--t...

[hedgehog99]

Uh, bit of a problem.  Amazon price is $180.  Even with the code, Chris Martenson price is $209.  The Excalibur Dehydrator, 9 shelf model.  Am trying to see if CM is worth subscribing to.  Based on the dehydrator, no.  http://www.amazon.com/Excalibur-Tray-Dehydrator-Dehydrater-Excaliber/dp/B000I6MXZG

[JohnG]

Make your own with a Styrofoam cooler and  100W light bulb at the bottom... Just vent it at the top, a couple of holes.

Keep it simple

Screens and the sun work in the summertime as well.  No need to spend a bundle.

(why do humans make everything so complicated??  It's simply absurd!!)

[mynhair]

Jobs is dead, dammit!  Get a life.  Or two.

[Franken_Stein]

WHO ARE "THEY"?

When the interrogator presses Rakovsky for Illuminati notables to approach with an initiative, Rakovsky is sure of only two who are now deceased: Walter Rathenau, the Weimar foreign minister, and Lionel Rothschild. He says Trotsky is his source of information.

Others he insists are speculation:

"As an institution, the bank of Kuhn Loeb & Company of Wall Street: [and] the families of Schiff, Warburg, Loeb and Kuhn; I say families in order to point out several names since they are all connected ... by marriages; then Baruch, Frankfurter, Altschul, Cohen, Benjamin, Strauss, Steinhardt, Blom, Rosenman, Lippmann, Lehman, Dreifus, Lamont, Rothschild, Lord, Mandel, Morganthau, Ezekiel, Lasky....any one of the names I have enumerated, even of those not belonging to "Them" could always lead to "Them" with any proposition of an important type." (272)

By allowing bankers the privilege of creating money, we have created an insatiable vampire. If you could manufacture money, imagine the temptation to own everything!

http://www.savethemales.ca/000280.html

[tyler]

As a recovering alcoholic and drug addict with six years of sobriety off drugs and fourteen months from alcohol, I'm seven classes away from being a drug and alcohol counselor.  In this economy I plan on being busy.  

[Lester]

In the American Collapse, there will be no economy.  There will be no organized distribution or production.  What there will be in aftermath of the nuclear devastation we will suffer is chaos, warlording, and ethnic cleansing.

Figure the UN will be deployed here to restore order?  How many hundred million personnel will it take?  Too many to happen...

TPTB will destroy the evidence and audit trails.  20yrs ago, Chuck Harder of For The People radio, heard on SW chiefly, stated that the big-wigs would travel to work in armored limos so they could withstand attacks made by bomb-throwers and other ambushers.  Seems almost tame compared to what has been happening with the Looting Of America thats gone one for over 3yrs now...

Need to be Out Of The Line Of Fire and able to live in some realm of self-sufficiency.  Also need firearms and knowledge to use them effectively for your self-defense.

Ain't gonna be no job market.  Might be a bounty on attorneys though, so there''s that potential if you bring in ears and fingers.  The first couple years, you need to stay off the radar and healthy, while the die-offs occur.

Wish you all the best.  Sooner you face up to fact that America Has Been Intentionally Destroyed and Looted by our "betters" the sooner you'll have to formulate a plan for your own survival and family preservation.  Blood Relations are about the only folk you really have cause to trust.  Best mend any fences and gather your clan together so all can work together.

Shit; there are no jobs now....  Why think it will ever change since all the capital has been stolen?  Consider that those who stole from US were licensed, educated, and trusted to act credibly "in the public interest" and all the did was fuck the Nation that made their career and family fortunes possible.... 

In the Patton speech, George C. Scott acted in the movies opener, there is the timeless line:  "When a bullet turns your best friend's head into a pile of goo, you'll know what to do..."  Our Nation has been killed even more violently and graphically.  The longer no action is taken, the more violent the action taken will be manifest.

See my blog for more survival discussion:  http://lesteronsurvival.blogspot.com

[darteaus]

Jobs is dead.

[TMLutas]

Lowering friction is not that complicated.

Step 1 - get a list of all taxing authorities

Step 2 - get a list of all their laws, rules, and regulations

Step 3 - evaluate each law/rule/regulation to see if we can improve employment by getting rid of it

Step 4 - repeal where appropriate

That doesn't mean that it will be easy. You can't even get a national list of all taxing authorities in the US, though some states keep state level ones. Running through all those laws is fairly simple, if tedious but getting repeals done is going to take a change in attitude at the subnational level that will be pretty difficult to pull off because it will be a change in culture.

[teotwawki]

See Mexico for our future. Get used to it. Upper class and the lower class. Majority lower class has nothing to do; starts selling drugs , kidnapping, cutting eachothers dicks off for 200 bucks. The border is a gaping hole here in arizona on purpose. Of course these things take time, our globalist masters will always ease us into the next level of tyranny slowly. Theyre so nice like that. 

[stevencruiser]

With the advance technology,people are finding themselves jobless.The future is not safe for us.So,it would be a better option to start your own small business.If you are interested in web programming then you can make your own websites and make money with it.I have started the same kind of policy,i have my personal blog on resume website for giving tips about how to make your website for resume.