Tag Archives: unemployment

recession watch

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I’ve been worried about Trump causing a recession. First, he firing federal workers willy nilly, and even if we accepted the idea that these people aren’t doing anything useful, they spend their salaries on groceries, household goods, haircuts, restaurant meals, home improvement, etc. Second, he is cutting federal contracts suddenly. A chunk of the private sector and certainly the research sector relies on federal contracts in one form or another, so this uncertainty will tamp down hiring and lead to layoffs. Then there is all the money that flows from the federal government to state and local governments and economies. That won’t just get magically replaced by state and local programs overnight, if ever. Then you have the tariffs and reduction of trade on top of all that. It sounds like a recipe for a recessionary shock to me.

I’m not an economist, but Claudia Sahm is. Here’s what she has to say, backed up by some facts and figures.

Civilian federal employment (including the Post Office) is currently 3 million or less than 2% of the labor force… About 100,000 workers have either taken deferred resignation or been laid off so far. Even if the total reduction doubles by the end of the year, it would still fall far short of a recessionary shock.

In fiscal year 2023, there were about three times as many federal contractors and grant employees as civilian federal employees (including the Post Office). DOGE canceling or modifying federal contracts and grants put that employment at risk. Elon Musk has set a goal of $1 trillion in savings this year, which most budget experts consider unrealistic. Still, these efforts will lead to a reduction in employment in the private and nonprofit sectors.

But even if DOGE reduces federal employment by 200,000 and canceling contracts reduces contact and grant employment (by a proportional) 600,000, the total is below (though close to) a recessionary shock. Moreover, the reality of the net employment reductions from DOGE this year is likely to be considerably smaller.

the staffing crisis

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This article in Longreads blames the degradation of hotels and restaurants in Yosemite National Park on the Aramark corporation. I think it is part of a larger trend of absolute bare-bones staffing in the U.S. service industry which has been going on at least since the pandemic. Something just seems out of whack when workers are barely getting by, prices seem so high, and service seems so poor. Like it or not, a drop in migrant workers during and since the pandemic is part of the story, whether those pre-pandemic restaurant and hotel workers were undocumented or not. In the U.S. childcare industry, where minimum staffing levels are highly regulated, prices are out of reach of even the upper middle class. In more competitive and less regulated hospitality industries, staffing levels are just cut to the bone. In Asia where I happen to be at the moment, staffing levels at tourist attractions are much higher. This works because tourists are willing or able to pay higher prices than what the local economy alone would otherwise support, and because higher-income countries bring in workers from lower-income countries. Since this will probably never be palatable in the United States, and rents and overhead costs are not going anywhere but up, we are probably stuck with shitty service and miserably overworked restaurant and hotel staff for the foreseeable future.

AI and rural jobs

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This Wired article is written by a Microsoft executive originally from the southwest corner of Virginia, which is where I happen to be originally from. He gives a few examples of how technology can transform old jobs and create new jobs in out of the way places.

  • Running “automated” farming equipment requires some combination of mechanical fix-it ability and IT help desk ability.
  • Keeping the books at a nursing home chain requires some fairly advanced database skills.
  • Precision plastic parts can be molded locally by technicians trained at community college, rather than ordered from abroad.

October 2019 in Review

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Most frightening and/or depressing story:

  • A third of all of North America’s birds may have disappeared since the 1970s. (Truth be told, it was hard to pick a single most depressing story line in a month when I covered propaganda, pandemic, new class divisions created by genetic engineering, and nuclear war. But while those are scary risks for the near future, it appears the world is right in the middle of an ongoing and obvious ecological collapse, and not talking much about it.)

Most hopeful story:

  • I’ll go with hard shell tacos. They are one of the good things in this life, whether they are authentic Mexican food or “trailer park cuisine” as I tagged the story!  

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both:

  • A list of “jobs of the future” includes algorithms, automation, and AI; customer experience; environmental; fitness and wellness; health care; legal and financial services; transportation; and work culture. I’ll oversimplify this list as computer scientist, engineer, doctor, lawyer, banker, which don’t sound all that different than the jobs of the past. But it occurs to me that these are jobs where the actual tools people are using and day-to-day work tasks evolve with the times, even if the intended outcomes are basically the same. What might be new is that even in these jobs, you need to make an effort to keep learning every day throughout your career and life if you want to keep up.

There will still be openings for evil HR cats.

Cognizant Jobs of the Future Index

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What kind of education and job skills should you recommend to young people today (assuming career/economic success is the goal. Yes, the world needs philosophers and musicians but sadly that is not a path to material success for many)? I figure biotech, materials science, robotics and computer science (deep theoretical understanding and/or engineering, not just code writing). Again, if material/economic success is the goal, I think you need knowledge and skills that are attractive to the private sector. (My own are mostly of interest to the public sector. I don’t regret my choices but this does put a ceiling on the potential size of my bank account.) There should be plenty of jobs in education and health care services, but not necessarily well paying ones at least in the U.S. I think there will always be plumbers and electricians.

Okay, now let’s see if I’m right. Here is the Cognizant Jobs of the Future Index. There are way too many jobs to list here, but their categories are:

  • algorithms, automation, and AI (okay, this is the computer science route, although someone could also try the math/statistics or even actuarial science path)
  • customer experience (this appears to cover what might be traditionally known as sales and marketing)
  • environmental (includes energy-related fields and environmental engineering – well, what do you know, maybe my choices aren’t so bad after all…)
  • fitness and wellness (home health care, physical therapy, etc. – things an aging population will need and hard to automate at least in the near term)
  • health care (includes the obvious, but also data science, genetic related, and medical device engineering related jobs)
  • legal and financial services (yes, lawyers will still be a necessary evil)
  • transportation (more on the engineering and planning side, not so much taxi and truck drivers…)
  • work culture (your human resources department will also continue to be a necessary evil)

So, I think a kid could do worse than a degree in chemical, mechanical or electrical engineering, then specialize from there. (Civil/environmental is nice…but again…the public sector thing). If you want to be a doctor or lawyer, go for it. The world will still need artists, philosophers, and in general people who can think, understand systems and solve problems, but it is still unclear when we will start valuing these things.

Universal Basic Income, VAT, and baby bonds

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A few 2020 Presidential contender highlights:

  • Andrew Yang (polling at about 1%) is promoting a Universal Basic Income of $1000/month for all U.S. citizens 18 and older regardless of income. He would pay for it by scaling back some other assistance programs and instituting…a VAT.
  • Cory Booker (polling at about 2%) is promoting “baby bonds”, where every baby gets a $1000 bond annually, and low-income children get up to an additional $2000 per year.

These are all ideas that (any) Democratic President and Congress could explore together, if they were to get a chance and managed to keep the corporate lobbyists at bay. I am 1000% in favor of VAT. It is just one of those things that all other modern countries do and the U.S. does not. It works and we just need to do it. Other taxes people hate can be reduced.

Both the UBI and baby bond ideas are supposed to address inequality quickly. The baby bond idea is supposed to particularly help racial disparities in wealth very quickly, but there is no reason the UBI could not do that with some fine-tuning. I like the idea of setting kids up with assets in principal, but in practice I am afraid unscrupulous relatives, Wall Street and payday lenders will find a way to take advantage of them. The UBI would essentially just be a “Social Security for All” scheme. We have the bureaucracy for that all set up and ready to go, so it seems practical to me. The only other difference I see between the two is that the government can more easily go back on a promise to pay you in the future than it can take money away from you that it has already paid. But of course it can do either, let’s not be naive.

My verdict – I’d like to see a VAT and a carbon tax used to fund education, infrastructure, and research. All of these things should help keep people busy if technology really does lead to unemployment. People can study to upgrade their knowledge and skills, design and build infrastructure and other types of capital goods, or go into research and teaching. Unemployment and disability insurance could also be beefed up to cover the gaps.

service jobs and automation

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Gizmodo says automation of service jobs took great leaps forward in 2018, citing things like automated ordering kiosks in fast food restaurants. I have to admit, I kind of like it because I don’t feel guilty about making a special order, and I feel like I am much more likely to get what I want. And ordering and paying by mobile app has those advantages, plus cuts the wait time to zero and greatly decreases germ transmission.

The article talks about how Las Vegas unions have negotiated early notification and retraining programs to help deal with automation. And this is how we have to try to deal with at the level of the economy as a whole. Educate and train people for jobs where they can add value in the near future. teach them to think flexibly and creatively so they can come up with new ways to add value in jobs and roles nobody has even thought about yet, reduce barriers to starting a business or taking risks on a new idea, and share the wealth a bit more when all else fails.

more jobs doesn’t lessen poverty?

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This article digs into a study on correlations between poverty, job creation and social mobility (along with several other factors). Unfortunately, just creating new jobs in low-income areas didn’t seem to increase the chances of children moving up the economic ladder compared to their parents. However, living or moving to a neighborhood where most people are employed does increase the chances of a child moving up the economic ladder compared to their parents.

It’s puzzling. The explanation that is easy to jump to is that cultural factors are very important and can’t be changed overnight. I’m sure there is some truth to that. I can think of other potential factors though – maybe parents in low income areas are taking those jobs, but whatever extra income they are pulling in is not enough to offset spending less time with their children. Maybe they are more likely to be single parents, lack extended family support, struggle with substance abuse and mental illness, not be able to afford high quality health care and child care, and live in low-performing school districts. Under these circumstances, it wouldn’t be too surprising that their children are not getting ahead. Those middle class professional parents in the neighborhoods where everyone is employed are probably scraping together enough to pay for decent health care and child care, and are probably demanding more from their school systems.

universal basic income

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This post on BillMoyers.com runs some of the numbers on the idea of a universal basic income.

The UBI would be for those who truly needed it — those who could not endure traditional full-time employment, either because of age, illness, disability, caretaking or student status. As baby boomers grow old and need care, as students struggle to earn an education without becoming hideously indebted, and as parents yearn to stay home with infants and very young children, a UBI would truly revolutionize society.

Proposals vary, with costs depending on whether or not UBI would be paired with other social programs, like universal health care. Karl Widerquist, a Georgetown professor of political philosophy, estimated that at $6,000 per child and $12,000 per adult, the net cost of UBI would be $539 billion per year.

This number may sound astronomical, but to put it into perspective, Widerquist writes, a UBI would cost “less than 25 percent of the cost of current US entitlement spending, less than 15 percent of overall federal spending, and about 2.95 percent of Gross Domestic Product.”

Wealthy and powerful people don’t like ideas to share the wealth, of course. But they should recognize that if we get to a point where there is enough wealth to go around, but not enough jobs to go around, there has to be some way to share the wealth or else there will be no possibility of a stable society.

Will robots take my job?

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If you want to know if robots will take your job, you can go to willrobotstakemyjob.com. It turns out my job (“environmental engineer” is the closest match) is particularly hard to automate at just a 1.8% chance robots will take my job, so I’ve got that going for me. I typed in ten other other career choices to see what I would get, then ranked them from most to least at risk.

  • auto mechanic: 59%
  • electrician: 15%
  • electrical engineer: 10%
  • mathematician: 4.7%
  • biochemist/biophysicist: 2.7%
  • materials scientist: 2.1%
  • chemical engineer: 1.7%
  • computer scientist: 1.5%
  • mechanical engineer: 1.1%
  • nurse: 0.9%

I won’t bother typing in the obvious ones like taxi driver (89%) or court reporter (50%). Okay, I did and that last one surprised me a little. The ten I picked weren’t random, they were ones I thought would be safe, and it turns out I was right except for auto mechanic. I’m a little surprised at that. Vehicles are merging with computers and getting more complex all the time, which means they are going to require more troubleshooting, updating, and will become obsolete faster than the past. I would also think a car mechanic could cross-train as a robot mechanic pretty easily. So the mechanics of the future will have to be equal parts grease monkey and tech support. Maybe they won’t be called mechanics, but the complicated systems we are creating are going to break in unpredictable ways and skilled troubleshooters are going to be in demand.

Anyway, the bottom line is that most types of engineering, and research positions related to genetics and/or materials, are pretty safe. Nursing is a field where supply just never seems to catch up to demand, and medical technology (and spending) just keep marching forward as the population ages and lives longer. You can still make a living as an electrician or a plumber.

I also learned something about the Standard Occupational Classification system used by the U.S. Department of Labor.

The 2010 Standard Occupational Classification (SOC) system is used by Federal statistical agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data. All workers are classified into one of 840 detailed occupations according to their occupational definition. To facilitate classification, detailed occupations are combined to form 461 broad occupations, 97 minor groups, and 23 major groups. Detailed occupations in the SOC with similar job duties, and in some cases skills, education, and/or training, are grouped together.