Tag Archives: jobless recovery

My Very Fond Memory of My Favorite Bookstore Owner – (And, Where Will the Jobs Be?)

We lived in Beaumont, TX for one year.  It was the early 1970s, I was fresh out of college, getting my feet wet in the work world.  I was a youth minister, but really preparing for my preaching years.  Every week, (sometimes more than once a week), I would drive to a small bookstore. These days, we would call it an “independent bookstore.”  It was a Christian bookstore – i.e., books that dealt with faith, and church, and preaching…  The woman who owned the bookstore knew her books, and kept up with the new releases.  I mean, she knew what was in these books, what they dealt with…  I got to know this woman.  She was “middle-aged,” and smart.  I was young, hungry to learn.  She was not a “clerk,” she was a teacher.  When I resigned, and readied to leave Beaumont, she was one of the first I told.

I loved that bookstore – and her wise counsel.

I could tell other such stories.  I am a serious Nero Wolfe fan.  I have every volume of the Rex-Stout-written volumes, and re-read the entire corpus every few years.  In Snyder Plaza in University Park, there used to be a Mystery Bookstore.  The woman who owned it (at least, I assume she owned it), tried to tell me that the newer Nero Wolfe mysteries, written by Robert Goldlborough with the approval of the Rex Stout estate, were worthy of my time.  I did not warm up to them, though I appreciated her recommendations.

But now…  as much as I love the customer reviews on Amazon (our blogging colleague Bob Morris has written many, many of them), they do not quite mean as much as those conversations with that Beaumont bookstore owner meant to me.

And now, a few “fulfillment center” workers, and lines of code getting me my Kindle App versions of books, have replaced how many countless book-loving bookstore owners across the country?

Call this a snapshot of the modern economy, and one of the reasons why many jobs are disappearing, and others are “less” than they used to be.  In recent weeks, we have learned that “temp workers” are rising rapidly in the overall percentage of jobs.  Here’s the current national look, from this article:

Workers at temporary-help service agencies accounted for about one-third of U.S. job gains in June.

And, read this from Andrew Sullivan:  Temps Are Here to Stay.  It has links to more.  Here’s a key paragraph.:

In the early 1980s, employment in the “temporary help services” industry—which covers both temp workers and employees of the firms that supply them—stood in the several hundreds of thousands. Now it’s 2.5 million, a seven-fold increase in less than four decades. By 2020, the BLS foresees more than 440,000 new jobs in the sector. In the meantime, the temp craze has expanded from air-conditioned offices to warehouses and construction sites.

And, I recently posted about Farhad Manjoo’s rather alarming look at the ascendancy of Amazon and its threat on all retail.  And I am part of the reason – blame me.  It so happens that I like this development.  Over the weekend, I ordered:  numerous household items, ink for my printer, a book or two for my Kindle App, and did so while never leaving my iPad or my easy chair.  In other words, I am helping put people out of a job.  I called my take on Manjoo’s article:  Amazon’s Secret – Make it Easy; Make it Fast; Make it Insanely Convenient. And that is what Amazon has become for me – easy, fast, convenient.  (Oh, and money-saving).

But, here is the thing.  In our quest for convenience and speed, and in the successful efforts of so many companies’ innovative techniques in giving us “what we want” (Amazon is clearly #1 in this regard), the outcome is this:  it takes fewer and fewer people to provide us what we want.  (And, if you have not read, Amazon has invested in some robot company that will replace even more fulfillment center workers).

And, so…  temp workers are on the rise; automation is on the rise; retail is threatened.  And so I ask again, as I have numerous times on this blog, where will the jobs be?

Where Will The Jobs Be? – Even Waiters Are In Jeopardy; High School Graduates Really Do Have Fewer Places To Work

News item:
The company is selling its cost-savings and margin-boosters, not just its benefits for customers sick of waiting for the bill, to businesses. First and foremost: lower labor costs…
Annie Lowery, This Waiter Doesn’t Need a Tip:  How restaurants will use tablet computers to replace servers. – Slate.com.


In an ongoing series of posts over the last couple of years, I have asked “where will the jobs be?”  I have presented synopses of a number of books (practically all of the best sellers) on the financial crisis of recent history.  But the problem that bothers me the most is this:  more than the mortgage crisis, the Wall Street crisis, the European/Greek crisis, the real crisis is the disappearance of jobs for the hard-working high school graduates.

In Pinched:  How the Great Recession Has Narrowed our Futures and What We Can Do About It, Don Peck (author of the widely read Atlantic article, Can the Middle Class Be Saved?), writes this:

“Forty years ago, thirty years ago, if you were one of the fairly constant fraction of boys who wasn’t ready to learn in high school, there were ways for you to enter the mainstream economy,” says Henry Farber, an economist at Princeton. “When you woke up, there were jobs. There were good industrial jobs, so you could have a good industrial, blue-collar career. Now those jobs are gone.” And men have yet to adjust.
In 1967, 97 percent of thirty-to fifty-year-old American men with only a high-school diploma were working; in 2010, just 76 percent were.
In her 2010 Atlantic essay “The End of Men,” the journalist Hanna Rosin posed the question “What if the modern, postindustrial economy is simply more congenial to women than to men?”

From 97% to 76% is quite a drop!  Where did these jobs go?  Robert Reich attributes the problem primarily to “automation.”  He wrote this in Aftershock – The Next Economy and America’s Future

The problem was not simply the loss of good jobs to workers in foreign nations but also automation…  Remember bank tellers?  Telephone operators?  The fleets of airline workers behind counters who issued tickets?  Service station attendants?  These and millions of other jobs weren’t lost to globalization; they were lost to automation.  American has lost at least as many jobs to automated technology as it has to trade.

I have little worry about the future of the better-educated (though, even the jobs for this group are not quite as plentiful and well-paying as they were just a few years ago).  The much bigger worry is for the “lesser-educated.”  And the problem is that, literally, there are not enough jobs left for this group.  (See the quote at the top; now even wait staff will be reduced by technology).

So, as I keep asking, “where will the jobs be?”

What Hath Jack Welch Wrought? Maybe Differentiation Is Not All That Good After All – (Should there never be any jobs for the “mediocre?” – Then what?)

“Ah, but we can’t,” goes the prayer. “We can’t because we have responsibility, a responsibility to our employees, to our community. What will happen to them?” I got two words for that: Who cares?
{The fictional Lawrence Garfield (Larry the Liquidator), Other People’s Money – see the clip here}


A few nights ago, I was talking to the chief information/technology officer for a major company, with locations all over the country (and beyond).  He told me that his job was this:  to reduce the workforce.  His goal is to cut every 100 workers down to 20.  With technological strategies and innovation, he can do that – he is doing that.  So, I asked him, but what about the 80 that are let go.  He said, “I don’t care.  That’s not my worry.  My job is to get the workforce down.”

I said, “You should care.  Because, ultimately, if every company does what you do, then your customer base will decrease – there will be no one to purchase your products.”  Though he seemed to get that in some macro sense (barely), his focus is clear.  He is doing what he was hired to do, overall economy be damned.

This problem is real, and big.  I fully understand the concept that we have to make every worker as productive as possible, and every company needs to maximize profits in every way.

Except…  the overall economy may have been healthier when companies “overpaid” for workers, letting “mediocre workers’ have a place to work, producing more income in the overall economy.  A worker who is not as productive as others still is a customer in the rest of the economy.  And if every company gets rid of those “bottom 10%,” then soon it becomes the “bottom 20%,” and the “bottom 30%,” and before you know it, your overall customer base for a functioning, growing economy shrivels up down to dangerous levels.

Welcome to 2011!

I don’t know who invented this “shrink the workforce” approach.  But Jack Welch is known for the way he championed “differentiation.”  It is an absolutely rational, good, smart approach.  Get rid of the bottom 10%, as you build the skill levels and capabilities of the rest of your folks.  Yes, get rid of the dead weight.  Get more work out of fewer workers; workers are so expensive, after all.  Your company will be better for it, your workers more productive.

This is from Winning by Welch:

Differentiation is about managers looking at the middle 70, identifying people with potential to move up, and cultivating them. Differentiation favors people who are energetic and extroverted and undervalues people who are shy and introverted, even if they are talented… The world generally favors people who are energetic and extroverted. In business, energetic and extroverted people generally do better, but results speak for themselves, loud and clear.
Differentiation – Cruel and Darwinian? Try fair and effective.

And this is from a column by Jack Welch (read the column here):

Bottom 10%
As for the bottom 10 percent in differentiation, there is no sugar coating this—they have to go. That’s more easily said than done; It’s awful to fire people—I even hate that word. But if you have a candid organization with clear performance expectations and a performance evaluation process—a big if, obviously, but that should be everyone’s goal—then people in the bottom 10 percent generally know who they are. When you tell them, they usually leave before you ask them to.
No one wants to be in an organization where they aren’t wanted. One of the best things about differentiation is that people in the bottom 10 percent of organizations very often go on to successful careers at companies and in pursuits where they truly belong and where they can excel.

I learned it on the playground
That’s how differentiation works in a nutshell. People sometimes ask where I came up with the idea. My answer is, I didn’t invent differentiation! I learned it on the playground when I was a kid.
When we were making a baseball team, the best players always got picked first, the fair players were put in the easy positions, usually second base or right field, and the least athletic ones had to watch from the sidelines. Everyone knew where he stood.

There may be times when I want Jack Welch to run my company.  But I’m not sure a world full of Jack Welches would be good for our economy.

Think back – over your whole life, you have had waiters/waitresses who were less than stellar, retail clerks who were a far cry from the best, and companies had so many workers who were not quite pulling their weight.  They were… mediocre.  And, yes, it drives me crazy when I receive “customer service” from a mediocre worker.  I have thought, “I would fire that person.”  But, what if all of those mediocre workers had nowhere to work?

Not every one was an “A” student (should we kick the “C” students, the bottom 10%, out of school?); not everyone was the starter on the football team; not everyone was the stand-out.

I think we ought to help everyone get “better” at their job.  But I think that an economy that only has jobs for the best has a shrinking pool of workers, and then, a shrinking pool of customers.  And then, you’ve got real trouble in river city.

If our economy does not give everyone a place to make some money, even those doing a less than stellar job, then we are destined to spiral down.  This may be the hidden price-tag of the search for excellence.

Maybe it’s time to, if not reward, at least make a place for, mediocrity.

“That Used To Be Us” – “The Great Stagnation” – Still, We Keep Asking, Where Will the Jobs Be?

We’re going to be hearing a lot about jobs in the coming days.  We should have been hearing about it more, a whole lot more, but there have been too many fires to put out.  And the bad news is they are not out.  They are not contained.

(I intend this metaphorically, but at this precise moment, here in Texas, there are literally too many fires to put out).

I have already put the new Tom Freidman and Michael Mandelbaum book, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back, into my schedule for the First Friday Book Synopsis.  It is about a lot, but especially about “where will the jobs be?” — beginning with:  “where have the jobs gone?”  (Listen to in interview with Freidman, just under 8 minutes, with transcript provided, here.)

And just last night I presented my synopsis of The Great Stagnation:  How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, And Will (Eventually) Feel Better by Tyler Cowen.  A short, brilliant book, Cowen asserts that:

All of these problems have a single little-noticed root cause:  We have been living off low-hanging fruit for at least three hundred years.  We have built social and economic institutions on the expectation of a lot of low-hanging fruit, but that fruit is mostly gone.
Low-hanging fruit since at least the seventeenth century:  free land, lots of immigrant labor, powerful new technologies…  Yet during the last forty years, that low-hanging fruit started disappearing, and we started pretending it was still there.  We have failed to recognize that we are at a technological plateau and the trees are more bare than we would like to think.
That’s it. That is what has gone wrong.  (emphasis added).
In other words, we’ve been riding off the past…

And in the book, he deals with the “problem” of the internet – a brilliant “invention,” yet one that may not ever create enough jobs.  Some more highlights from the book:

The internet is wonderful, but it’s not saving the revenue-generating sector of the economy. 
More and more, “production’ – that word my fellow economists have been using for generations – has become interior to the human mind rather than set on a factory floor…  In other words, the new low-hanging fruit is in our minds and in our laptops and not so much in the revenue-generating sector of the economy.
…the big technological gains are coming in revenue-deficient sectors.  “To put it simply, only after 500 million members, and in very recent times, did the debate stop over whether Facebook can make a lot of money.”
            • Contrast:
                        • the arrival of the automobile = millions of jobs
                        • Facebook = users do the work; a relative miniscule number of jobs created
Online Industry Employment Levels
Google – 20,000
Facebook – 1,700+
eBay – 16,400
Twitter – 300

At the gathering last night, where I presented my synopsis of The Great Stagnation, a very sharp, very successful gentleman, walked up afterwords, and said this (paraphrased, from memory):  “I have looked and looked at this, and I simply do not see an answer.”  Of all the issues I have written about on our blog through our few brief years, the question that has kept me up at night more often than any other is this:  where will the jobs be?

Here’s Friedman’s answer (from the interview):

There’s kind of a hankering today, when is Ford going to put in that 50,000-worker factory in my city again? When is Intel going to come, Paul Otellini? Folks, it’s not going to happen because those factories now are all incredibly roboticized(ph), automated, and they are capital-intensive, not labor-intensive. We’re not going to have a 50,000-person factory in your town. What we need are 50,000 people, a thousand of whom are starting jobs for 10 people, 50 of whom for 100, 100 of whom for 30 – that everybody needs to be starting something.

Yes, of course, he is right.  We need to start a lot, a whole lot, of new start-ups…  But, look at Facebook – a pretty successful “start-up.”  And, look at how many people Facebook employs.  Not.that.many!

And, besides, it takes a special kind of person to start something that is successful enough to employ others over a long haul.  This is not all that easy!

But, we may have no other choice.  Because, where else will the jobs be? 

That question has not gone away – it only keeps getting louder, more urgent…

Where Will The Jobs Be? – I Keep Wondering…

If you read the news, if you pay attention to the changes in society, if you keep up with what’s happening, you know that we really do have a few very different worlds out there – maybe more pronounced than ever before.

I’m speaking especially about the world of jobs, and the search for jobs.  For example, for the college graduates, especially the new college graduates, the news is a little on the grim side.  That Bachelor’s Degree, which feels so valuable because of all the work that went into earning it, is simply not quite enough.  Not anymore.  In the article The Master’s as the New Bachelor’s by Laura Pappano (N Y Times), here are the warnings:

Browse professional job listings and it’s “bachelor’s required, master’s preferred.”
Colleges are turning out more graduates than the market can bear, and a master’s is essential for job seekers to stand out — that, or a diploma from an elite undergraduate college, says Richard K. Vedder, professor of economics at Ohio University and director of the Center for College Affordability and Productivity.

And the article begins this way:

William Klein’s story may sound familiar to his fellow graduates. After earning his bachelor’s in history from the College at Brockport, he found himself living in his parents’ Buffalo home, working the same $7.25-an-hour waiter job he had in high school.

The article is worth reading, as she delineates the specific “new” functions/purposes of a modern Master’s Degree.

But, at the other end of the spectrum, we find this:  the national high school graduation rate is right at 71%.  That means that for every 100 people hitting age 19 or so, 29 of them have not even graduated from high school.  (And most of these never will graduate from high school, and will certainly not graduate form college).

So, to put this in perspective:

• the people who used to get the jobs that were available with a Bachelor’s Degree now need a Master’s Degree.
• thus, the people with a Bachelor’s Degree now work at jobs that used to be filled by people who only graduated (or did not even graduate) from high school.
• Thus, the people who only graduated from high school (or did not even graduate from high school) will work…where?

There are many who say “jobs, jobs, jobs; this should be the concern of our political leaders.”  Yes, it should.  But, the question that I worry about is this:  where will people work — especially those who have dropped out of high school?

An Innovation Deficit – And It Might Keep Getting Worse

I keep thinking about innovation.  We all have to.

Fareed Zakaria has one of his provocative articles up…  THE FUTURE OF INNOVATION: CAN AMERICA KEEP PACE?  And here is how he begins the article (read more from his website, here):

“The first step to winning the future is encouraging American innovation.” That was Barack Obama in his State of the Union address last January, when he hit the theme repeatedly, using the word innovation or innovate 11 times. And on this issue, at least, Republicans seem in sync with Obama. Listen to Mitt Romney or Newt Gingrich or Mitch Daniels and the word innovation pops up again and again. Everyone wants innovation and agrees that it is the key to America’s future.

Innovation is as American as apple pie. It seems to accord with so many elements of our national character — ingenuity, freedom, flexibility, the willingness to question conventional wisdom and defy authority. But politicians are pinning their hopes on innovation for more urgent reasons. America’s future growth will have to come from new industries that create new products and processes. Older industries are under tremendous pressure. Technological change is making factories and offices far more efficient. The rise of low-wage manufacturing in China and low-wage services in India is moving jobs overseas. The only durable strength we have — the only one that can withstand these gale winds — is innovation.

Even more troubling, there are growing signs that the U.S. no longer has the commanding lead it once did in this area.

On his special about innovation on CNN, he interviews some genuine innovation heavy hitters, including Steven Johnson, the author of Where Good Ideas Come From (I presented my synopsis of this terrific book a few months ago at the First Friday Book Synopsis.  You can purchase my synopsis, with handout + audio, at our companion web site, 15mintuebusinessbooks.com).

He repeats what many others are saying — what, seemingly, everyone is saying.  For example, here is one recent article:  U.S. Is Falling Behind in the Business of ‘Green’.  From this article:

A recent report by the Pew Charitable Trusts found that while the clean technology sector was booming in Europe, Asia and Latin America, its competitive position was “at risk” in the United States because of “uncertainties surrounding key policies and incentives.”

And, as I think about all this innovation, I realize something else.  A lot of innovation is putting a lot of people out of work.  It goes back to the problem of “Automation” that Robert Reich wrote about.  In Aftershock, he wrote:

The problem was not simply the loss of good jobs to workers in foreign nations but also automation…  Remember bank tellers?  Telephone operators?  The fleets of airline workers behind counters who issued tickets?  Service station attendants?  These and millions of other jobs weren’t lost to globalization; they were lost to automation.  American has lost at least as many jobs to automated technology as it has to trade. 

Here is a summary of this aspect of the problem, quoted in Points this morning in the Dallas Morning News:

“If you’re doing something that can be written down in a programmatic, algorithmic manner, you’re gong to be substituted for quickly.”  (Claudia Goldin, a Harvard economist, offering a dire job-market forecast for U.S. manufacturing workers).

So…  we need innovation.  We need to do new things.  We need to do old things better, faster, more effectively.  We need innovation in products, innovation in systems, innovation in every arena.

But, we also need some really innovative thinking in this area:  “where will the new jobs come from?”

Anyway, I keep thinking about innovation.