The 21st century labour market: square pegs, round holes and an unpredictable future

ballerina


Reality is the starting point on the road from the way things are to the way we’d like them to be.


In his New York Times op-ed piece, ‘College’s Priceless Value, Higher Education, Liberal Arts and Shakespeare’, Frank Bruni used his “most transformative educational experience” to argue for degrees in the humanities and against those who see only dollars and cents when they think of higher education.

Bruni’s passion was unmistakeable and hardly misplaced. But with so many pieces just like it in circulation, the public is becoming desensitized to the real issue: the need to open its eyes and the eyes of its children to the reality of the “employment landscape”.

Parents in Canada and the U.S. have yet to acknowledge, let alone step up to, their responsibility to provide the guidance and discipline that goes with preparing their children to be self-sufficient. They point an accusatory finger at an education system that pays lip service to the subject. And at a corporate and political establishment that does much the same. Then they insist on clinging to ideas about university graduation as a general purpose ticket to the good life and a rosy future that are 20 or more years out of date.

Edward Fiske described the hell that was preparation for university entrance in Japan in his 1983 New York Times article entitled ‘Japan’s Schools: Exam Ordeal Rules Each Student’s Destiny’. It was a hell that was not without its casualties. He started his article by saying: “American students, by and large, take examinations to get out of school. Japanese take them to get in. One result is that once Japanese students get to college, they can relax.”

Admission to university was an automatic ticket to the good life. Attending university was anticlimactic. Things have changed. “Cram Schools” continue to figure prominently in Japan. China takes university admission just as seriously.

The Child Trends Data Bank 2011 Home Computer Access and Internet Use report shows how many children have their own personal computers and smartphones before and during high school, usually at no cost to them and with no strings attached. These devices can entertain and enlighten. Why are they not doing both?

There’s no shortage of information about the economy or the labour market. It’s accessible and it’s free. The combined power of the personal computer and the Internet is out of all proportion to its cost. But we’ve conditioned our children to use desktops, laptops, tablets and smartphones as replacements for the family television as North America’s collective, unsupervised electronic babysitter of choice. Children know how awkward their parents are around computer technology so they skate rings around them. They also know that they’re indifferent to how their children are using it. Hackers halfway around the world know more about how children are using those babysitters than the parents of those children do.

China has begun to experience consumers who want everything to be cheap and available now. So says Bloomberg Businessweek’s account of what’s driving Chinese outsourcing in ‘Say Goodbye to Made in China’. If, as Bruni suggests, employers are less than enamoured of graduates with degrees in the humanities, it’s because the times demand it. Shareholders agree. They’re responding as they should to the demand for consumer and corporate technology it takes to run a 21st century country.

Our children aren’t the only ones who aspire to or already have degrees. According to the New York Times (Mr. Bruni’s employer), China’s student population stands at 31 million. In the U.S. there are 21 million. More than 9 million sit for the gaokao (college entry exam) each year; fewer than 3.5 million sit for the SAT and ACT combined. According to the OECD, and as reported by the BBC, there were 129 million university graduates in the OECD/G20 countries in 2010. By 2020, that number will have risen to 204 million. Twenty-nine percent will be in China; 12% in India; 11% in the U.S.; 2% in Canada.

Bruni observed: “It’s impossible to put a dollar value on a nimble, adaptable intellect, which isn’t the fruit of any specific course of study and may be the best tool for an economy and a job market that change unpredictably.” Should we take that to mean that only arts graduates have nimble, adaptable intellects? How would he describe the intellect of the bankers who engineered 2008 and have yet to be charged, let alone tried?

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Fig. 1: Bloomberg Businessweek February 9 – February 15, 2015

The evidence is mounting that parents have no alternative but to work one-on-one with their children to open their eyes to the labour market if they want to have a future. Gone are the days of teaching them that the best way to deal with preparing for work in the 21st century is to put off confronting it by ignoring it altogether and hoping for the best. We hear the evidence every time a graduate says: “I can’t find work in my chosen field.”

Our children aspire to pictures of the rosy future their parents painted for them based on out-dated experiences. They’ve bought into the notion that universities are places where young people go to “discover themselves”. If that discovery process were working, there would have been no need to write this.

Oxford Dictionaries defines “reality” as:

The world or the state of things as they actually exist, as opposed to an idealistic or notional idea of them

A thing that is actually experienced or seen, especially when this is grim or problematic

Dealing with reality is daunting, but some have dreamed of and succeeded in changing it. The list includes, but is in no way limited to:

Nelson Mandela, Mother Teresa, Grace Murray Hopper, Malala Yousafzai, Oprah Winfrey, Roberta Bondar, Susan B. Anthony, Pearl S. Buck, Helen Keller, Steve Jobs, Bill Gates, Larry Ellison, Dr. Martin Luther King, Jr., Thomas Edison, Guglielmo Marconi, Alexander Graham Bell, Dr. Jonas Salk, Dr. Christian Barnard, Gottlieb Daimler and Karl Benz, Orville and Wilbur Wright, Marie and Pierre Curie, Frederick Banting and Charles Best, Johannes Gutenberg, Albert Einstein, Craig Kielberger, Galileo Galilei, Sir Isaac Newton, Jennie Trout, Coco Chanel, Sandra Day O’Connor, Rosalind Franklin.

The ballet slipper on the right in the Huawei advertisement (top) depicts what many parents see or want to see. The foot on the left says that it takes more than a nimble, adaptable intellect to turn a dream into reality. Career “planning” and career “counselling” imply that the end result will be a foregone conclusion. What’s called for in the 21st century is career prospecting based on hard, verifiable data because there are no foregone conclusions where university degrees are a dime a dozen.

Industries predicated on the humanities aren’t going to roll over and die. There will always be a Broadway, the Oscars, the Emmys, symphony orchestras, the Nobel Prize for Literature, books, poetry, art and philosophy because we will always have a need and an appetite for anything that reflects and talks to us about the human condition. But for the moment, technology, climate change, global warming, the prospect of megadrought, and antibiotic resistant bacteria are beginning to impact on that human condition and they demand our attention.

Without the humanities there would be no: oil paintings, watercolours, sculpture, pottery, blown glass, music, poetry, literature, philosophy, tapestries, television delivered to smartphones and tablets, movies, Oscars, Grammies, Tonys and Clios and pondering of the human condition.

That is a given and it will never change. But for now, the pendulum is swinging in a different direction and we have to give it its due.

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Kevin O’Leary’s Best Advice

 

On July 5, 2013, I wrote “If you want to live a happy life, tie it to a goal, not to people or objects.” — Albert Einstein

What follows is what Kevin O’Leary, Shark on ABC’s Shark Tank and late of CBC’s Dragon’s Den, had to say on the subject in a LinkedIn Influencer post dated February 3, 2015.

Neil Morris

 


 

Best Advice: What You Want to Do Isn’t Always What You Want to Be

Feb 3, 2015

I was raised in a household that deeply valued education. When I was a teenager, my brother Shane, was making a beeline for engineering — an aspiration he had held since he was a kid. My parents were thrilled. Me, on the other hand, they were worried about.

Success was not a given for me. I liked music, taking pictures, and hanging out with my friends.

In my last year of high school, my stepdad George sat me down for the Talk About My Future. I was fidgeting, reluctant to pay attention, worried about telling him of my photography dreams. George was adamant. His singular question: What do you want to do with your life?

I told him that I didn’t want to go to university. That I was going to be a photographer.

“That’s not what I asked you. What do you want to do with your life?”

I repeated my answer with greater conviction.

“OK. That’s all well and good, Kevin, but do you have any idea what you have to do in order to be a photographer?” he asked.

I didn’t know how to answer that. Be? Do? There’s a difference? I crossed my arms and mumbled something about taking night classes, getting an agent, opening a gallery. I had no idea what I was talking about, but it sounded good.

Then he asked another crucial question.

“How much money do you think you’d need to make, every year, to be happy?”

I told him $20,000 which in the early 1970s was a lot of money.

He shrugged.

“Most photographers don’t make that much money,” he said. “They’d be lucky to pull in a few thousand a year. On the side.” He explained that the majority of my income would have to come from a job of some kind, a job I wouldn’t necessarily like doing, but one that wouldn’t interfere with what I love doing. That was the “do” part of George’s question.”

“Are you able to do that Kevin — to work at a job in order to support yourself as you try to be a photographer? That’s how it’s done, Kevin. Actors wait tables between auditions, and writers hold down steady jobs, writing in their spare time.”

What was I willing to do to make money while I honed my craft? Lay bricks? Work in retail? Clean garbage trucks? Plant trees? I’d done all those jobs. The idea of spending the rest of my life subsidizing a passion felt impossible, and because I had no postsecondary education, those were about the only jobs for which I was qualified. George wasn’t discouraging me. He was being brutally honest with me about my chances at making it. Without the drive to work at other jobs to support that passion, I had no chance of becoming a wealthy photographer.

So “to be or not to be?” isn’t the question. The question is: What are you willing to do in order to be what you want to be? It’s not enough to say you want to be a photographer, or an actress, or a writer. You have to want to do all the necessary difficult things that are required to support that goal.

Lots of people are willing to do just that. Some of them make it, both at the doing and the being… but George’s advice was that most don’t.

I simply wasn’t willing to take that risk, to perform all the tasks and jobs required to support my dream of becoming a full-time photographer. I wasn’t willing to work days as a bricklayer or at a mall, shooting and developing photos on weekends. I didn’t want to inch toward my twenties — maybe even my thirties — accumulating debt and rejection, just to build a portfolio of work or a string of shows where most or all of my photos would go unsold.

There was no shame in understanding that about myself. It was an important, life-changing discovery. It meant that I had to stay on the scholarly path, because getting off the path altogether wouldn’t take me anywhere good. I wasn’t willing to make artistic pursuits my full-time priority, and I really wouldn’t have fared well as a punk. I love money too much.

Today, thanks to George’s advice, my decision to pursue academics, and a few other fortunate events and right turns along the way, I’ve built a successful career that allows me ample time and resources for my real passion — photography.

In October 2013, I held an exhibit of my photography in Toronto, titled Kevin O’Leary: 40 Years of Photography. I sold framed prints for $6,000 each, and raised $97,000 for teen entrepreneurs. There’s no doubt in my mind that this never would have been possible if George didn’t teach me the importance of knowing that you need to know what you want to do with your life, before you decide what you want to be.

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James T. Kirk and the Kobayashi Maru

 

On his third attempt, Captain James T. Kirk of the starship Enterprise passed the Kobayashi Maru holodeck “no-win” training exercise by reprogramming it. He was subsequently commended for original thinking. Whether or not this was Starfleet’s way of saying that reprogramming was an option because it was not expressly forbidden, only the film’s writers Roberto Orci and Alex Kurtzman know for sure.

Fiction or no, that part of Star Trek lore resonates in 2015, especially the part about original thinking. The 6 crew members onboard the International Space Station may be excused if they haven’t had time to contemplate how sub-US$50 crude oil will impact on them and their families. But the rest of the people on planet Earth won’t have that luxury.

For Canadians, the world started to change on July 1, 2014. On that day, the Loonie closed at 94 cents. It started changing a lot faster when the Bank of Canada lowered its interest rate to 0.75% on January 21, 2015. We’ll soon be paying a lot more for our morning orange juice, and a lot of other things, courtesy of a 78.5-cent dollar as of February 1, 2015. The interest rate could fall to 0.5% as early as March. Barclays Bank has downgraded its stock ratings for the Bank of Montreal, Royal Bank and TD Bank, noting that “consumer borrowing, the main profit driver for Canada’s banks, will likely slow even more than previously expected”.

Much of the reason will be stories like Target Canada’s abrupt closing of its 133 retail outlets and the 17,600 Canadians who were let go as a result. That doesn’t include Target’s suppliers. SONY Canada is closing its retail stores. Alberta now faces the prospect of recession. Oil companies are cutting back on capital expenditures and hiring. CIBC will be laying off 500 employees because of slower than expected profit growth.

The Kobayashi Maru scenario left little room for “if it ain’t broke, don’t fix it”. For the moment, Canada looks like an oil-based, one-trick pony. Canadians will have their say about whom they blame and what should be done about it on October 19th—or sooner.

We keep hearing that a lower dollar will be good for Canadian manufacturers and exporters. But in the meantime, we have to play the cards we’ve been dealt. That will call for out-of-the box thinking by Canadians looking to become re-employed and those hoping to land that first job.

What is broken and needs to be fixed is the notion that we can or should rely on governments at any level to do our thinking and planning for us. Most have shown that they can barely think for themselves. We’re going to have to develop our own versions of Kirk’s Kobayashi Maru, because without them, not all choices having to do with postsecondary education will be the right choices. There is nothing on the horizon to suggest that conventional thinking will mean that there will be more than enough good, secure, full-time work to go around.

As Jean-Luc Picard, captain of a later Enterprise, would have put it: “Make it so.”

 

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Are you just starting out in this strange time?

The times are strange. Your university, college, or school, your parents, and those you take advice from know one world — but you live in another.

The world they know is one of relentless, unending inflation. One where racking up debt to study, then to “get on the real estate ladder”, was the right thing to do.

But you live in a world of deflation. Debt is your enemy, because money is worth more every day, and debt parts harder to repay.

So here’s the necessary steps to prosper in the world you actually live in.

First, if you owe, make it go. Every penny of debt must be retired as fast as you can. Live cheaply, plough as much as you can to take that burden off your neck.

Second, be very cautious around buying real estate. It will be illiquid when you want to sell, and the mortgage and condo fees will choke you over time. Landlords will try to churn units to raise rents (they, too, are being choked by their mortgages) so ride it out. The less you owe, the easier it’ll go.

You can buy when and if you see a period of stability for yourself — if you do, accelerate your payments and get out from under as fast as you can, and don’t pay for space you don’t need. Four child families were comfortably raised in 900 sq ft bungalows sixty years ago. That’s a lot cheaper than the 3,000+ considered “essential” for a family that large today.

Third, be employed. If the best you can get is flipping burgers or pouring coffees, accept it. some income is better than none. A year later, at least your résumé says you don’t quit.

Fourth, consider the pressure to keep going on — Master’s, Doctorates, certificates galore — with a cynical eye. These are the remaining profit centres in higher education (which hires sessional instructors now rather than tenure-track staff). What do you get out of it? For a solid answer, go. For speculation, avoid it: it’ll still be there in a few years and they’ll take you part-time to get your money when you go back (if you do).

Accept that no degree comes with a guarantee of employment. No, not even engineering, medicine, or the like. (If you’re in high school and reading this, study what motivates you, and pay cash. Seven years (study one, work the next) to do a Bachelor’s degree will become “normal”. Working until you’re 21, then going, not only let’s you go with cash, it brings you in as a mature student — one they’ll back off a lot of rules for.

This period is likely to last most of your life. You may do twenty different things before you finally stop working, as employers downsize or frat merged out of existence. Be adaptable — and always be working.

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Are You Ready for a Strange Time?

A strange time. What, on earth, is a “strange time”, and why might you have to prepare, to be ready, for it?

The past few months have given us clues, if we only bother to look for them.

So let’s look, shall we, and think about what it might all mean.

This is, after all, about doing personal due diligence. Such looking is a diligent person’s stock in trade.

A society deflating around us

Deflation is far more than just falling prices, although that is how it is often portrayed. It’s also far more than something central bankers get all panicked over, doing “whatever it takes” to fight.

Deflation is the shrinking of the economy. In particular, money increases in value. Labour is less valuable. So, too, is debt – quite a bit less valuable, in fact.

A deflating economy takes real money – cash in hand – and raises its value. Technological improvements (whether those are physical or programmed technology, or better processes, or better ideas) increase productivity. This shows up as needing less people to do the same work. That, in turn, shows up to you as job risk.

Since the 1990s at the very least – it was then that the first web sites went online, that most people started to buy computers, and that electronic communications (starting with email and text messages) became a part of our lives – technology has been wiping out jobs left, right, and centre.

This hasn’t shown up in an obvious fashion. The jobs I held in the 1970s were still there in the 1990s. They don’t exist at all today in the 2010s. But new jobs have replaced them, right?

Well, not exactly. Toronto, where I live, is a prosperous city on the surface. But it has over ten percent unemployment. Half its citizens only hold part-time jobs – often, two or three of them, none with benefits, none paying well – or are “consultants” scratching out a living from one project to the next.

50% with no security, 10% with no anything – only 40% have some degree of security. That’s not prosperous.

But, like Japan two and a half decades into a deflation, appearances differ from reality. Japan has lost its lifetime employment guarantees during these years. Only the fact that the Japanese population is falling has stopped mass unemployment from becoming a reality (the way it is in Europe in most of the countries along the Mediterranean). But many Japanese now scratch out a living from project to project or hold part-time positions without benefits, rather than the lifetime positions they used to hold.

Canada and the United States faced their last long deflation after the American Civil War and after Canadian Confederation. The 1870s, 1880s, and 1890s were decades of deflation. Look at the progress: streetcar networks in cities, electricity, the phonograph, the projector, the automobile, asphalt and macadam (to pave roads and put the mud at bay), street lighting, a web of continental railways – it’s a long list. But for a quarter century jobs were hard to find, self-employment wasn’t rewarding in most cases, people on farms (and doctors) lived near starvation most of the time.

The next few years will see this deflation – that began two decades ago – erupt into full view. The central banks will, either by choice (as with the Swiss National Bank this month, or Iceland’s central bank), or by being forced into it by the market, to give up trying to forestall this deflation.

They spent $50 trillion – yes, $50,000,000,000,000 – over the last seven years to stop this deflation. That money must still be repaid (it’s on their books as loans). But, in a deflation, debt doesn’t get cheaper – it must be repaid with ever more expensive money, as money grows in value (a dollar buys more, in other words).

The nineteenth century didn’t have central banks and spent half its time in inflation, half in deflation. That was the pattern since the fourth century in Europe. The twentieth century was one long inflation.

Dare you bet that the twenty-first, starting in deflation, won’t be a long, long run of deflation (relative to periods of inflation)? I wouldn’t.

What this means for your career is twofold. First, everything you know about assets, how they change in value, their long term value, is suspect. All that knowledge comes from inflation. None of it comes from deflations.

Second, jobs held up by inflation – especially those that aren’t critical to the work of the firm – are about to be dispensed with. Firms need plant workers and sales staff. They don’t need analysts, strategists, human resource clerks, and the like.

Look at how much of the support of the business is already outsourced. Ask what happens next.

It’s not only important that you do – it may be the difference between you having a retirement and feeding your family, or not.

If that sounds extreme, well, I’m sorry. But deflations are payback time – payback of debt, and payback of structural debts in the economy.

You and me? We just have to stay out of the way of being ground down.

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Which degree? At what cost? Why?

Due diligence is behaviour designed to protect an asset from actual, perceived or anticipated harm. Most of those assets are financial and can be measured in dollars and cents, but not always. A child is a “hyper-asset” that parents instinctively protect from the moment he or she is born. Most of what they’re protecting their child from is measured in terms of lumps, bumps, bruises and scrapes. Except for extreme cases, healing takes place within days and the child is none the worse for wear.

But as children grow up, lumps, bumps, bruises and scrapes are replaced by situations calling for decisions. Some have to be made on the spot; others can take much longer. All have consequences. Decisions about post-secondary education fall into the latter category, especially when they involve life and career objectives.

Each year of primary and secondary school is a stepping-stone to the one that follows. Grade 12 is a stepping-stone to the first year of university or community college. Parents believe that graduating from university or community college is a stepping-stone to well-paid, secure, predictable employment. There are disciplines in which that outcome is more likely than others because of labour market, economic and, increasingly, technological conditions. The trick is to know which disciplines and under what conditions, and even then, there are no guarantees, from universities or otherwise.

Research done in Alberta in 2005 showed that young people consult their parents in these matters more often than any other group and by a wide margin. But outdated ways of thinking, like old habits, die hard. Parental wishful thinking rather than fact-based understanding of labour market and technological trends is one of the greatest risks our children face. We started seeing evidence of that in the latter part of 2012 and the trend shows no sign of abating.

Choosing postsecondary education, especially in today’s job market where, to quote the Economist, “[the] rise of the on-demand economy poses difficult questions for workers, companies and politicians,” comes with a considerable risk of displacement. Due diligence is about minimizing the negative consequences of those choices by anticipating them and factoring them into the final equation. It’s about developing and costing out plans for dealing with those consequences, then determining whether implementing them will be less or more costly than the value of achieving the original objective. If less, parents and children will probably proceed: if not, they probably won’t. Either way, they’ll do what they do with their eyes wide open.

Many of today’s employers are either infatuated with technology or inextricably bound to it. To what extent will be reflected in the kinds of people they hire and under what conditions. To be sure, there’s more to life and business than technology, but it’s only prudent to know where along the technology-non-technology continuum your child plans to work when the bulk of his or her formal schooling is done. This applies to every discipline without exception.

In What is the Meaning of The Medium is the Message? Mark Federman, Chief Strategist, McLuhan Program in Culture and Technology wrote:

“Marshall McLuhan was concerned with the observation that we tend to focus on the obvious. In doing so, we largely miss the structural changes in our affairs that are introduced subtly, or over long periods of time. Whenever we create a new innovation—be it an invention or a new idea—many of its properties are fairly obvious to us. We generally know what it will nominally do, or at least what it is intended to do, and what it might replace. We often know what its advantages and disadvantages might be. But it is also often the case that, after a long period of time and experience with the new innovation, we look backward and realize that there were some effects of which we were entirely unaware at the outset. We sometimes call these effects “unintended consequences,” although “unanticipated consequences” might be a more accurate description.

“Many of the unanticipated consequences stem from the fact that there are conditions in our society and culture that we just don’t take into consideration in our planning. These range from cultural or religious issues and historical precedents, through interplay with existing conditions, to the secondary or tertiary effects in a cascade of interactions. All of these dynamic processes that are entirely non-obvious comprise our ground or context. They all work silently to influence the way in which we interact with one another, and with our society at large. In a word (or four), ground comprises everything we don’t notice.

“If one thinks about it, there are far more dynamic processes occurring in the ground than comprise the actions of the figures, or things that we do notice. But when something changes, it often becomes noticeable. And noticing change is the key.

“As McLuhan reminds us, ‘Control over change would seem to consist in moving not with it but ahead of it. Anticipation gives the power to deflect and control force.’“

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2014 in review

The WordPress.com stats helper monkeys prepared a 2014 annual report for this blog.

Here’s an excerpt:

A New York City subway train holds 1,200 people. This blog was viewed about 5,000 times in 2014. If it were a NYC subway train, it would take about 4 trips to carry that many people.

Click here to see the complete report.

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