This slump is worse than most; so is the mood. Once demand returns, they say, jobs will come back and, with them, optimism. But Americans are far more apprehensive than usual, and their worries seem to go beyond the short-term debate over stimulus vs. deficit reduction. They fear that we are in the midst of not a cyclical downturn but a structural shift, one that poses huge new challenges to the average American job, pressures the average American wage and endangers the average American Dream. The middle class, many Americans have come to believe, is being hollowed out. I think they are right.
People who get paid a decent wage for skilled but routine work in manufacturing or services are getting squeezed by a pincer movement of technology and globalization.
(Thursday, Oct. 21, 2010, Time, Fareed Zakaria, How to Restore the American Dream)
The news this morning in Dallas is not good. Home sales are down 30% (though prices are slightly up). And though our area is relatively healthy, there is a great sense of unrest in our city. Leaders of nonprofits see requests for basic human needs increasing significantly, and they are finding it harder and harder to raise needed funds. I run into people all the time who are “in transition.” They are looking for a job – increasingly, jobs that are very hard to find. Especially for the “middle-aged” among us. But, also, for the recent college graduates. And older folks, who thought they were about to retire – and can’t.
No group seems immune from the sense of unrest.
I recently spoke to a very sharp group of current MBA students. More than one has a “job lined up” – a company that he/she is starting upon graduation. They might succeed. Or, they might not…
Recently, Brian Whetten posted The Death of Dilbert: Why Your Children Will Need to Love Their Jobs on The Huffington Post. He quotes from both Fareed Zakaria and Thomas Friedman, and he pulls it all together in a simple, clear way. Here’s a lengthy excerpt:
In Time Magazine, Fareed Zakaria pointed out that there are basically three types of jobs in America.
• Unskilled service jobs (such as waiter or security guard)
• Skilled, routine jobs (such as sales, office management and factory workers)
• Managerial, technical and professional jobs (such as executives, entrepreneurs and doctors)
In other words, you can flip burgers, shuffle papers or innovate. And over the last 100 years, our country has been built on the backs of “middle America”; the hard working men and women who worked 9-5 jobs, and did the work they were told to, so they could bring their paychecks home to their families.
The majority of today’s middle class jobs involve skilled but routine work; it can be boring and unfulfilling, but at least is safe and predictable.
Perhaps this is why Dilbert is one of our funniest, most popular cartoons. I mean, who can’t relate to the idiocies and inefficiencies in his world?
But here’s the thing. Dilbert is dying.
While the number of unskilled jobs and professional jobs have both been increasing, even in the face of this recession, the number of skilled, routine jobs — the bread and butter work of the middle class — is falling through the floor.
As Thomas Friedman points out,
Just doing your job in an average way — in this integrated and automated global economy — will lead to below-average wages. Sadly, average is over. We’re in the age of “extra,” and everyone has to figure out what extra they can add to their work to justify being paid more than a computer, a Chinese worker or a day laborer. “People will always need haircuts and health care,” says Katz, “and you can do that with low-wage labor or with people who acquire a lot of skills and pride and bring their imagination to do creative and customized things.” Their work will be more meaningful and their customers more satisfied.
I think we are in the midst of, what the experts call, a structural shift in our economy. And we haven’t figured out just what to do about this.
As I have written quite a few times on this blog, this is the problem that keeps me awake at night: Where will people work? For all of us, we have to keep learning, to keep innovating, to keep being valuable to someone who will hire us, for a job that lasts a while, or assignments that come and go so quickly we barely have time to catch our breath. And for many, simply finding a job is becoming the survival challenge of the era.
Here is one list of top books: the finalists for the “Business Book of the Year.” The Financial Times and Goldman Sachs oversee this particular award. Read about it here. This is from the Financial Times article:
Books that investigate and explain the financial crisis dominate the shortlist for the 2010 Financial Times and Goldman Sachs Business Book of the Year Award.
The finalists are:
The Art of Choosing by Sheena Iyengar
The Facebook Effect by David Kirkpatrick
The Big Short by Michael Lewis
More Money than God by Sebastian Mallaby
Fault Lines by Raghuram Rajan
Too Big to Fail by Andrew Ross Sorkin
All but the first two tackle, directly or indirectly, some aspect of the crisis that hit the financial world in 2007-08 and whose impact is still being absorbed by global businesses and economies.
The Business Book of the Year will be announced on October 27 in New York.
Here are prior winners:
2009 – Liaquat Ahamed for The Lords of Finance
2008 – Mohamed El-Erian for When Markets Collide
2007 – William D. Cohan for The Last Tycoons
2006 – James Kynge for China Shakes the World
2005 – Thomas Friedman for The World is Flat
Read more about each of this year’s finalists here.
Note: I have presented synopsis of two of the book listed: The World is Flat and The Big Short. It looks like I have more reading to do!
Thanks to First Friday Book Synopsis participant Leslie Garner for alerting me to this.
A Few Thoughts About Our Need For Oil – Prompted By The Big Rich By Bryan Burrough, And the Oil Rig Disaster in the Gulf
A few comments about oil… First, my leanings. I think we ought to get off of oil – as soon as we can. I prefer some kind of clean, renewable replacement. No, I do not know what it will be.
But, I was re-visiting The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes this past week, and was reminded of the role of Texas oil in World War II. The Axis Powers (the other guys) used a total of 276 million gallons of oil in all of World War II. Texas alone provided more than 500 million barrels to the Allies – more than 100 million barrels from H. L. Hunt alone.
Here are some lines from the book:
When the war was finally won, American oil was among the heroes. The Allies, it was said, “floated to victory on a sea of oil.”
As Axis leaders acknowledged, they couldn’t compete with the Allies’ supply of aviation fuel and gasoline. “This is a war of engines and octanes,” Joseph Stalin said in a toast to Winston Churchill in Moscow. “I drink to the American auto indusrtry and the American oil industry.”
Now, here’s my big observation. For all of World War II, the entire amount of oil used was less than 1 billion barrels of oil. For all of World War II! On both sides! Today, the entire planet uses 85 million barrels of oil every day. Every 11 days or so, we use as much oil as was used in the entire Second World War. That is why we look for oil everywhere we can find it – under ground, under oceans – we need it all. And we will need it all until we find an alternative. Which we need to find – fast!
When the Exxon Valdez went down, the planet earth used 66 millions barrels of oil a day. 21 years later – today – we are using 85 millions barrels a day – every day. And every teenager in America, and now every teenager in China, and India, and… dreams of having his or her own car. And those cars will need fuel. As Tom Friedman put it in Hot, Flat, and Crowded, the problem is not how much oil America uses. The problem is that there are now “too many Americans.”
As the rest of the world catches up to us, there will be more big cities needing more electricity and more cars and more oil and more…more.
It really is breathtaking to realize that we use as much oil every 11 days as was used in the entire Second World War. And our 85 million barrels a day today will grow to 110 million barrels of oil in the blink of an eye. I was 39 years old when the Exxon Valdez went down. We’ve increased oil usage by 19 million barrels a day since that happened. By the time my son is my age, we will have far surpassed the 110 million barrels a day figure. And why is that figure important? There are plenty of experts who say that 110 million barrels a day is it – the top – the most we can get out of the ground and ocean and use. In other words, when we hit 111 million barrels a day, need exceeds capacity. (And let’s say that the capacity can increase some more. This much we know – the day will come when need does exceed capacity).
And if you know any history at all, when that happens – when need exceeds capacity — with any needed resource, you’ve got real trouble.
Last night, I presented my synopsis of Hot, Flat, and Crowded by Thomas Friedman. It was a large, opinionated, animated group. The conversations were passionate, and the whole evening really was quite a learning experience.
He observed that Collapse is a book with real implications for the whole oil usage/crisis question. I think he is right.
The message of Collapse: How Societies Chose to Fail or Succeed, written by Pulitzer winner Jared Diamond, is that culture after culture throughout history has “collapsed,” many because they lived only for the day and did not make the right choices for tomorrow. They “used up” what they had, foolishly – tragically. But, because it was then and not now, their collapse was an isolated collapse.
We now are too connected to “collapse” all by ourselves. Diamond wrote:
“Globalization makes it impossible for modern societies to collapse in isolation… Any society in turmoil today, no matter how remote, can cause trouble for prosperous societies on other continents, and is also subject to their influence (whether helpful or destabilizing). For the first time in history, we face the risk of global decline. But we are also the first to enjoy the opportunity of learning quickly from developments in societies anywhere in the world today, and from what has unfolded in societies at any time in the past. That’s why I wrote this book.”
He tells the stories of a number of “collapses,” including modern day Montana, and Easter Island, and the Norse in Greenland, and others.
Diamond presents a five point framework for collapse:
1) Environmental damage.
2) Climate change
3) Hostile neighbors
4) Friendly trade partners
5) The society’s response to its environmental problems
And he asks this perplexing question:
“ How could a society fail to have seen the dangers that seem so clear to us in retrospect?”
(or – “what were Easter Islanders saying as they cut down the last tree on their island?”)
I think the participant was correct. It’s a good time to take another, very close look at Collapse.
For a quick read of just one of the stories in Collapse, check out Malcolm Gladwell’s The Vanishing for The New Yorker, his retelling, from the book, of the collapse of the Norse in Greenland. Cultural snobbery was one of the reasons they collapsed. Here’s Gladwell’s concluding paragraph:
When archeologists looked through the ruins of the Western Settlement, they found plenty of the big wooden objects that were so valuable in Greenland—crucifixes, bowls, furniture, doors, roof timbers—which meant that the end came too quickly for anyone to do any scavenging. And, when the archeologists looked at the animal bones left in the debris, they found the bones of newborn calves, meaning that the Norse, in that final winter, had given up on the future. They found toe bones from cows, equal to the number of cow spaces in the barn, meaning that the Norse ate their cattle down to the hoofs, and they found the bones of dogs covered with knife marks, meaning that, in the end, they had to eat their pets. But not fish bones, of course. Right up until they starved to death, the Norse never lost sight of what they stood for.
(note from Randy – I am certainly no expert in this field. I read books, and then try to let the authors and the books speak. This post is an attempt to let Friedman’s book speak to us).
The news is not yet turning any better in the aftermath of the Gulf Oil disaster. Oil continues to escape. No expert is sure, but there seems to be a growing consensus that the total amount of oil seeping into the environment is going to be greater than the 11 million gallons of the Exxon Valdez disaster – maybe much more.
Maybe it’s time to revisit a few of the quotes/warnings from Thomas Friedman’s book, Hot, Flat, and Crowded. Like this paragraph:
We now understand that these fossil fuels are exhaustible, increasingly expensive, and politically, ecologically, and climatically toxic. That’s the line we’ve crossed.
What changed? The simple answer is that flat met crowded. So many more people were suddenly able to improve their standards of living so much faster. And when the crowding of the world and the flattening of the world converged around the year 2000, the world went into a track where global demand for energy, natural resources, and food all started to grow at a much accelerated pace – as the Western industrialized countries still consumed considerable amounts of energy and natural resources and big emerging countries got to join them at the middle-class dinner table.
So, this is the problem. What is the solution? There is no “one solution” — it will take an array, a constellation of solutions. But, before we embrace any solution, we have to acknowledge the reality:
“Hello, my name is Randy,
We are the United States,
We are the world,
And we are all addicted to oil.”
Only when we acknowledge the depth of the problem do we have a chance to turn toward true alternatives. (Remember, the phrase “alternative energy” is about true alternatives!)
Friedman includes this quote in his book:
“Obsessing over recycling and installing a few special light bulbs won’t cut it… We need to be looking at fundamental change in our energy, transportation and agricultural systems rather than technological tweaking on the margins… To stop at “easy” is to say that the best we can do is accept an uninspired politics of guilt around a parade of uncoordinated individual action…” (Michael Maniates, Washington Post, November 22, 2007).
Our economy needs us to make money on energy in ways that are – renewable; cleaner; different.. The fish, and the people who make their living from our oceans, need no more oil spills. Our bodies need cleaner air. The reasons are numerous – it really is time to get serious about alternatives.
Here’s Friedman’s key quote from the book:
Green is the new red, white, and blue because it is a strategy that can help to ease global warming, biodiversity loss, energy poverty, petrodictatorship, and energy supply shortages – and make America stronger at the same time. We solve our own problems by helping the world solve its problems. We help the world solve its problems by solving our own problems.
If climate change is a hoax, it is the most wonderful hoax ever perpetrated on the United States of America. Because transforming our economy to clean power and energy efficiency to mitigate global warming and the other challenges of the Energy-Climate Era is the equivalent of training for the Olympic triathlon: If you make it to the Olympics, you have a better chance of winning because you’ve developed every muscle. If you don’t make it to the Olympics, you’re still healthier, stronger, fitter, and more likely to live longer and win every other race in life. And as with the triathlon, you don’t just improve one muscle or skill, but many, which become mutually reinforcing and improve the health of your whole system.
• The new “zippies” — “a young city or suburban resident, with a zip in his stride. Generation Z. Oozes attitude, ambition, and aspiration. Cool, confident, and creative. Seeks challenges, loves risks, and shuns fear.”
(Describing younger adults in India — Thomas Friedman, The World is Flat)
Last night, I spent a really wonderful evening with a group of very sharp women. We discussed the book Womenomics by Katty Kay and Claire Shipman. There were many parts of the book that were met with approval and agreement. But they weren’t so sure about this: in the book, the authors state that “The millennials are influencing expectations for the entire workforce…the next generation has no interest at all in the sixty-hour work week.”
I remember reading David Halberstam’s great book The Reckoning. In the book, he described some bad years for Ford and the ascendancy of Nissan. The book is in storage, so I can’t give you an exact quote, but I clearly remember this: younger Americans had become complacent, not driven, not hungry – and a little lazy and apathetic. At the same time, the younger adults in Japan were working really, really hard because they were so hungry. He clearly implied that hunger trumps apathy.
I thought of that when I read Thomas Friedman’s column this morning: The New Untouchables. Here are some excerpts:
A year ago, it all exploded. Now that we are picking up the pieces, we need to understand that it is not only our financial system that needs a reboot and an upgrade, but also our public school system. Otherwise, the jobless recovery won’t be just a passing phase, but our future.
A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.
Bottom line: We’re not going back to the good old days without fixing our schools as well as our banks.
I agree that we need to retool our education, or we will be in genuine trouble. We are definitely growing an alarming education deficit.
But I would suggest that Friedman is hinting at another bottom line. I would word it this way: we’re not going back to the good old days unless we get a little more hungry, and develop a new generation of zippies right here in our country.
I don’t think that Kay and Shipman are calling for a lesser work ethic. They are, in fact, arguing for hard work – when you are at work. But, this desire of a younger generation to “work less” may translate into a lesser work ethic at the very time that we are in competition with people all over the world who may be ready to work harder than we do. And if there is anything I have learned in business books lately, work ethic really matters. From the 10,000 hour rule popularized by Gladwell’s Outliers, to the call for deliberate practice in Colvin’s Talent is Overrated, it takes hard work over a long period to get really good at anything. And that hard work has to start with working hard to learn what is available to learn in school — and then adding skill after skill after skill after school.
In Freidman’s article, he describes that a person can be a very competent lawyer with just the skills learned in school. But then, the lawyers that survive and thrive in tough times have to develop other skills – skills not taught in school, like client cultivation, networking, the skill to imagine new ways to work…the list grows and grows. As for the people who learned what they learned in school, and expect that that will be “enough” – well, it isn’t enough. Not anymore.
So – here is your simple question for the day. Do you “ooze attitude, ambition, and aspiration?” When a person watches you walk down the sidewalk, would they describe you as a “zippie?” If not, you’d better look over your shoulder, because someone is about to pass you.
You can purchase my synopsis of The World is Flat, with audio + handout, at our companion site, 15minutebusinessbooks.com. The Womenomics synopsis is coming soon.