Category Archives: It’s the economy

Riding madly off in all directions

If there are days when it feels like the world is riding madly off in all directions, it probably is. Change is the culprit and it’s never happened this fast or in so many places at the same time. Nothing in our experience has equipped us to deal with it.

Parents who are sending their children to university in the current economic and technological climate expect that when their children graduate, the jobs they’ll be applying for will be as traditional and as plentiful as they were in their parents’ day. They may be in for a surprise.

Employment relationships aren’t what they used to be. Corporate tastes in university degrees have changed. We have to factor that into how we think about the role higher education is going to play in the life of our children and what their options are going to be. Change is a fact of life for real companies and organizations with real names. Our kids need to know which companies and organizations they are or are likely to be.

We also have to bear in mind that the cost of tuition has risen 40% in the last 10 years. That will continue. Over 50% of all jobs are now precarious. Over half of those jobs will be automated in the next 10 years. That, too, will continue.

The links in what follows will take you to articles and reports about the current environment and how it will impact on your young people and those of people you know. They feature GE’s Jeff Immelt (#4), MIT’s Erik Brynjolfsson (#12), McGill’s Suzanne Fortier (#12) and Google’s Sergey Brin (#16), among others.

  1. September 1969 — The first node of ARPANET installed at UCLA
  2. August 12, 1981 — IBM introduces its first personal computer
  3. July 15, 2014 — Apple and IBM Forge Global Partnership to Transform Enterprise Mobility
  4. August 4, 2016 — LinkedIn interview with GE CEO Jeff Immelt: “Culture is not just apps. It’s a combination of people and technology. If you are joining the company in your 20s, unlike when I joined, you’re going to learn to code. It doesn’t matter whether you are in sales, finance or operations. You may not end up being a programmer, but you will know how to code. We are also changing the plumbing inside the company to connect everyone and make the culture change possible. This is existential and we’re committed to this.”
  5. September 2016 Deloitte survey “Transitioning to the Future of Work and the Workplace, Embracing Digital Culture, Tools, and Approaches”
  6. October 22, 2016 — Finance Minister Bill Morneau offered this advice at a Liberal Party gathering in Niagara-On-The-Lake: “Get used to the ‘job churn’ of short-term employment and career changes.”
  7. December 17, 2016 — Morneau’s advisory council on economic growth predicts that: Fully half of all jobs will be automated during the next decade, making massive retraining a social and economic necessity.”
  8. January 14, 2017 — “Innovation key to achieving Trudeau’s resourcefulness.’” In order to move Canada’s reputation away from resources to resourcefulness, PM must break the mould of linear thinking.
  9. January 12, 2017 — World Economic Forum report: “The jobless world and its discontents, How can we prepare for a future where drones, 3D printing and automation replace jobs?”
  10. January 14, 2017 — The Economist: “Lifelong learning, How to survive in the age of automation” (Cover story and Special Report)”
  11. January 16, 2017 —As Robots Take Jobs, Europeans Mull Free Money for Al
  12. January 19, 2017 — Davos 2017 – Issue Briefing: Jobs and the Fourth Industrial Revolution
  13. February 2017 — Maclean’s print edition: “When robots steal your job”, The real driver behind re-shoring is automation. Robotic jobs, not human ones, are coming back.
  14. February 2017 — Automa-nation: Will robots take your job? A new report suggests 42% of the Canadian job market is at risk.
  15. January 17, 2017 — IBM THINK Blog, IBM Cognitive Principles
  16. January 19, 2017 — World Economic Forum, Davos 2017: Google’s Sergey Brin on AI

We’re told that we’re in the midst of the Fourth Industrial Revolution. We may not know how the story ends, be we do know that it will probably involve some form of advanced education. Our children have to be prepared.

 

 

It’s not how much you spend on university. It’s how wisely

between friends


Rise of the ‘precariat
,’
the global scourge of precarious jobs

Barely one in four of the global workforce has a stable job, UN reports
– CBC News, World, June 1, 2015

Contract work is here to stay, says Bank of England governor
UK job market has changed permanently due to financial crisis, Mark Carney tells Treasury select committee
– The Guardian, November 25, 2014


In his Nov. 1, 2015, editorial ‘The 21st-Century Club’, Fortune editor Alan Murray said of the 13th Fortune Global Forum:

“We are now in the early stages of the third Industrial Revolution. New corporate behemoths like Google, Facebook and Uber are reaching Fortune 500 size at unprecedented speed. The century will belong to those who master this new model. Economic dynamism will matter more than sheer scale. The invitation-only CEO gathering (Nov. 2-4) will include leaders of many of the largest companies in the world and focus on the challenge of ‘Winning in the Disruptive Century'”. (You can view the agenda of the recently concluded event by clicking here.)

One of the advantages of living in the early 21st century is that all it takes to see how some of the most powerful corporations in the world are going to change the way we live and work is a few keystrokes. What the Forum attendees heard and discussed wasn’t ‘if’: it was when—and when is now.

Those companies will need the help of well-educated young minds and they’re not alone. They’ve declared their intentions publicly which means that the word is out on what kinds of schooling they’ll be looking for. Parents and children who plan to attend university have to read that word, understand it and act on it. We know the names of the people who are shaping the future and the names of the companies they head. The information they’re making available about what they’re thinking is free.

It’s not how much parents are spending on higher education that matters; it’s how wisely they’re spending it. It’s a lot cheaper to avoid making a mistake than it is to correct it. The two articles at the top of this page speak to the consequences. So does this story about the precariat by Joe Fiorito in today’s Toronto Star. How is someone who is just starting out supposed to repay student loans on irregular or inconsistent income? At what point will the rising cost of tuition put post-secondary education out of reach? What will the impact be on the universities themselves?

There’s a glut of degrees on the street. Jobs that used to call for a high school diploma now call for a degree but pay high school wages. Graduates are accepting them even though they aren’t full-time and employers don’t look gift horses in the mouth. Had graduates taken the time to scrutinize the labour market before they put their money down, they might not have run out of options.

We can’t blame all of this on graduates any more than we can blame all of it on universities or governments. But we can blame it on a changing employer-employee social contract that has already cost many parents their job. Why weren’t they and others paying attention?

The environment in which today’s jobs exist is as important as the jobs themselves. Free trade agreements are part of that environment. Compromises were built into every one of them. To get, we gave. And what we gave was often measured in jobs lost. Canada has entered into 44 of those agreements so far and concerns are being expressed about the Trans-Pacific Partnership, which has yet to be ratified. Politicians and businesspeople love to boast about how many new jobs the agreements they ink will create. What kind of jobs are they? Will they be permanent or precarious? What qualifications will they call for? How much will they pay?

In its Oct. 24th – 30th issue, The Economist published ‘Reinventing the company’. In its Nov. 1st issue, FORTUNE published ‘The 21st Century Corporation: Every aspect of your business is about to change’. This is what Geoff Colvin said in his lead-in:

“Imagine an economy without friction—a new world in which labor, information, and money move easily, cheaply, and almost instantly. Psst—it’s here. Is your company ready?”

Please be sure to read FORTUNE editor Alan Murray’s editorial ‘The 21st-Century Club’. It’s what the C-Suite is reading and it’s already here.

By no means does this apply to all lines of work or to all degrees or all post-secondary diplomas and certificates. But where it does, and if precarious employment is the outcome, how do we calculate the value of higher education? Or the cost? Is it the education, the way it’s chosen, or both?

Even if parents are prepared to borrow money to put their kids through college, someone is going to have to pay it back. In the States, 7 million have defaulted on their loans. The US$1.2 trillion owing isn’t the figment of someone’s imagination: it’s real. In Canada, the number is between C$25 billion and C$50 billion, and one family in 8 is shouldering the burden.

To see the numbers for yourself, go to Google Alerts and set it to deliver links to articles with the words “student debt” in them to your e-mail inbox once a day. You’ll average 10 per day, 7 days a week, 52 weeks a year. I have been since October 2012, and the problem isn’t confined to North America. To see what universities are doing to cope, research the Millennium Project at the University of Michigan.

The world isn’t going through a phase: it’s evolving. We’re experiencing an economic tectonic shift, a “third Industrial Revolution” as FORTUNE puts it. If you want to see what the World Economic Forum’s Global Competitiveness Report 2014 – 2015 says about how Canada is faring, click here.

The United Negro College Fund has been reminding us for years that: “A mind is a terrible thing to waste”. So is a university. If we continue to waste either or both, we’ll have no one to blame for the consequences but ourselves.

Customers First, Investors Last: What were they thinking?

For years now, my colleagues and I here at BoardBench, have been saying that Wall Street has it backwards.  In the boardroom, directors have been fed, with a very large spoon, the mantra that they are beholden to the shareholder, that their purpose is to “maximize shareholder value.”  If you asked a large group of directors if this is true, you’d see a lot of bobbleheads in the room.  Many believe this is a legal requirement and in line with good business sense and good corporate governance.  Unfortunately, the concept of “shareholder primacy” is a relatively recent phenomenon.  It is also simplistic (shareholders’ wants are not homogeneous), has no legal basis anywhere (go ahead, try to prove me wrong), and, as many are now pointing out, usually damaging to companies, and the economy as a whole.

What we believe is real, and will eventually be proven again as real to the Street, is that customers, and employees are the two key drivers of corporate success.  When I say “again” I’m referring to Peter Drucker’s famous quote from decades ago: “the purpose of a business is to create and keep customers.”  So many seem to have forgotten this, or have never even heard of it.

But the basic premise is this: if you take care of your customers, and have great employees who are well supported and appreciated for being curious and excited about what they do such that they will ensure that customers love the products and services that the company offers, the company and shareholders will reap the rewards, too.  Of course other things come into play, like managing R&D investments (with the customer in mind), operations, and supporting a corporate culture that has strong values and morals.  The basic premise may be slightly oversimplified, but it applies, and should resonate with the board.

It appears that I’m finally not standing alone on this either.  In a recent interview, Jack Ma, the world’s newest CEO darling, made two bold public statements.  He basically shunned the current thinking of the Street by stating, on national TV, that “our customers come first, ouJack.jpgr employees second, and our shareholders third.”   He continued: “We aim to be larger than Wal-Mart by 2016, or sooner.”  If – no, when – Jack succeeds, and executes flawlessly on his statement, that customers and employees take a front seat over shareholders/investors, then he’s got an excellent chance of passing Wal-Mart as the world’s largest retailer.  Note, Wal-Mart just slapped some of its employees, who have the most direct relationship with their customers, by cutting their insurance benefits. This was probably done to cut costs, but it will probably also have a long-term impact on their customer relationships, too. But, I digress.

It seems that too many directors, CEOs, and business leaders, have become obsessed with what Wall Street, its analysts, and shareholders think.  Many have learned to play these groups exceptionally well, too. Countless analysts and shareholders have been taken in by companies’ projections, quarterly earnings estimates, and highly creative financial management and reporting.  Don’t get me wrong, the importance of the exchanges and the markets cannot be downplayed, but a balance is needed.  Focusing on Main Street is just as important, if not more so.

If you follow Main Street, you know about big box discount stores. Costco Wholesale Club, founded by Jim Sinegal and Jeffrey Brotman, believe in serving the customer first, and that if employees are treated properly, they will work with, and treat the customer well too.  Jim, the public face, is a “hands on guy” who is known for visiting each individual Costco store.  Jim is also outspoken about his views on Wall Street.  He’s been known to say that he puts his customers and employee needs above “pleasing shareholders.”  This philosophy must be working: Costco’s five year return is +116.73%.  If you bought the stock earlier, your return would be closer to 354%.

American Express is another company known for taking good care of its customer/members.  Personally I’ve been a fan of the company’s customer service representatives over the years, and tell them that every time I’ve called for help.  Don’t get me wrong, working at this company must be tough: when I was younger, AmEx employees were nicknamed The Dragons.  Perhaps because they were seehat2.jpgn as willing to fight for the company and their customers nearly to the end.  By the way, if you invested in American Express five years ago, your return on investment would be up 149.46%.

If you’ve worked with the general retail public, as I did during my college years, then you know just how tough this can be.  Sadly, not everyone who enters a store, calls a helpline, or dines in a restaurant is a kind and thoughtful customer.  Amazon deals with all sorts of customers from nearly every continent in the world, and I’m sure they have some interesting stories to share.  However, the company is noted for being one of the best customer service organizations in the world.  Amazon has more than one customer base, as many do: retail members, and consumers.  Jeff Bezos clearly divided the customer’s connection to Amazon into two categories: the experience and the service.  At this level, he notes that customer service is part of the full customer experience.  If it’s unpleasant, it’s a negative customer experience.  He supports the idea that a positive customer experience creates greater loyalty with Amazon.  If you’ve ever dealt with an Amazon Customer Service rep, you know that they work quickly to resolve your issue, they get the job done for you, and you are nearly always satisfied and left feeling good about your relationship with Amazon.  And, if you invested in Amazon five year ago, your return on investment is now up 236.64%.

While it’s much more pleasant to focus on the “good guys,” there are dark clouds.  Some companies are noted for their poor customer service.  Some survive because there are few alternatives: think of phone companies and cable providers, and some you can name on your own (take a look at their five-year ROIs).  However, when it comes to poor customer experience these days, I think sadly of that American icon Sears.  Whenever I bring them up these days, all I hear is: “Oh my gosh, I could tell you about the time when…”  Sears is a sad story101.jpg about the decline of a once great and loved retail giant.  Many years ago, the Sears catalog used to be called a “wish book.”  Families would anxiously wait for it to arrive in the mail.  It was nearly 5 inches thick. Moms, dads, sisters, and brothers would argue over whose turn it was to browse through and select from among the items they wanted for birthdays, holidays, special occasions and more.  Some people even bought their homes out of the Sears catalog.  But, it has lost its way, and it’s touch with its customers and has already begun its drop down that magical slide once pictured in its own catalog.  The entire company and its hopes for the future look pretty dismal: sell off of units and real estate, store closings, etc.  Sadly, if you invested in Sear’s five years ago, your return on investment would be -58.50% and it’s still falling today.

To sum up and put things into even sharper perspective, I recently spoke with the General Counsel of one of the largest, most recognized corporations in the world.  He told me, succinctly, that the biggest problem with their board is that not one director had any understanding of who their customers were and are or what they want.  I can also assume that they don’t understand their employees either.  So I will watch how this company slides in the next few years (Note: their record has been negative for some time), and report back with an update, unless, that is, they somehow figure it out and turn it around.

Do you need to focus on board improvement: composition, strategy, direction, execution, oversight?  Boards are our specialty. Give us a call.

Nancy May

Is this why we’re spending money on higher education for our children?

Q: What do you want to be when you grow up?
A: Employed!

How are you going to explain that this isn’t your grandfather’s economy?

If deciding what university or community college or trade school your child is going to attend is starting to keep you up nights, you’ve probably visited more than a few of their websites. You’ve looked at the pictures of smiling faces, viewed the videos and read the inspirational language intended to convince you to spend your money, and, possibly, your child’s future, with the people on whose behalf those websites were created.

By now you’ve noticed that (a) you’ll have to do some digging to find any mention of tuition, fees and expenses because it would be in poor taste to publicize them on the home page; and (b) every one of those institutions is looking for a donation.

There are some who consider it gauche to have the words “money” and “university” in the same sentence. They would argue that higher education isn’t about money: it’s about introducing young minds to new ideas and new ways of looking at the world and themselves. It builds networks that include students who sit next to one another in lecture halls but live half a world away. Then there’s the benefit that comes from learning to fend for oneself away from home. This is the point where laundry and groceries enter into the discussion.

Those people would be right—to a point. But when the last glittering speck of that pixie dust that university websites magically create settles gently to the floor and the cool breeze of reality wafts through the room, the fact of the matter will be that nothing about attending an institution of higher learning is free. Once a child reaches the end of the taxpayer-funded, kindergarten/primary school/high school conveyor belt, decisions have to be made about the need for post-secondary education altogether. (P.S.: Taxpayer dollars pay for that, too.)

Even if his or her degree were paid for in full before the first day of lectures, the newly minted undergraduate or postgraduate is going to have to earn a living, especially if he or she is among the 40 million students south of the border who have US$1.2 trillion in student loans to repay, or the Canadians who owe between C$25 billion and C$50 billion. That money is going to have to come from somewhere. What about the cost of living? Will there be a new home or car to finance? Will there be enough money to pay the rent or buy food?

Finding work to pay for those things is the elephant in the room. Regardless of how many organizations the new graduate may have joined or voyages of self-discovery he or she may have gone on, if the résumé intended to support his or her application for that first full-time job is rejected by applicant tracking software for lack of key words and phrases, we have a problem. If the problem can be traced to a poorly executed résumé, the oversights can be corrected. But if the academic qualifications are wrong and creativity falls short of compensating for it, the only cure may be to spend 4 more years earning an education that will sell, but only after an in-depth reassessment of personal goals and what the economy needs.

As a country, we can’t afford scenarios like that because a mind is a terrible thing to waste (©UNCF). If you read or listen to nothing else today, please click on and ponder Robots Vs. The Middle Class (Bloomberg Businessweek, May 25 – May 31, 2015) and listen to Terry O’Reilly’s The Internet of (Marketing) Things (Under the Influence, CBC Radio One, Saturday, May 30, 2015). You’ll want to pay particular attention to O’Reilly’s thoughts about the Apple Watch.

How different is today’s economy from your grandfather’s economy? Well, did you ever doubt for a moment that your first job would be full-time with benefits? Are you doing now what you were planning to do then? Are you employed full-time? Have you been unemployed as a result of downsizing or outsourcing? Knowing what you know now, what would you do differently?

Would your grandfather recognize a world in which China is the world’s manufacturer, where 50% of working Canadians of all ages are not employed full-time, and where the price of post-secondary education is higher now than at any other time in history? What about a Canada where manufacturing has been decimated while employers continue to complain that they’re hard-pressed to find certain kinds of workers yet most of them refuse to train? What would he say about a Canada where $500 billion is sitting idle while vote getting corporate tax breaks underwritten by your tax dollars and mine go unused?

The North American work force is resolving itself into two camps: the one that recognizes that this isn’t your grandfather’s economy and is adjusting its expectations accordingly, and the one that doesn’t. One refuses to take career and labour market information at face value until they’ve confirmed it independently with multiple sources with their own eyes, not once but several times. The other doesn’t. One studies industries, market trends, the impact of technology and the performance of employers because they recognize that large numbers of dollars are at stake, not only the ones they’ll spend acquiring the necessary education, but the also the ones they risk not earning by failing to do their personal due diligence. The other doesn’t.

The economy is the financial air we breathe. We ignore it at our peril. Since 2001, I’ve met face-to-face with 2130 working people who, five minutes before I walked into the room, lost a job they thought wasn’t at risk. Most of them believed that where the world is going didn’t apply to them. They were mistaken.

F. Neil Morris
President & Founder
Personal Due Diligence
+1 (905) 273 9880

A riddle with a twist

What costs $24,000 or more; takes 4 years to deliver; can’t be insured; has no cash surrender value; can’t be returned or exchanged; comes with no performance commitments and is covered by the two-word guarantee: caveat emptor?

An undergraduate degree.

Such is the mystique surrounding universities that otherwise perfectly rational human beings line up like lemmings to press hard-earned money into the palms of people who work in registrars’ and admissions offices. This in spite of media coverage of the plight of university graduates who’ve watched employers devalue and demean their diplomas and the four years of work that went into earning them by offering unpaid internships, short term employment contracts or permanent part-time engagements. No benefits, no stability, no prospects. The labour market in Canada and elsewhere is awash in undergraduates and post-graduates who are free to sell their services at whatever severely depressed prices the market dictates, or run the risk of earning next to nothing or nothing at all.

Employers are playing the game according to the rules of supply and demand in pursuit of profit and positive return on investment. The question is, by what rules are parents playing that we’ve arrived at this point? How much damage is inadequate decision making going to do to the financial future of our children and, quite possibly, the country, before we accept that we’re in a buyer’s market for certain kinds of education. The university degree is a commodity and it’s in oversupply in certain disciplines. Every new diploma in those disciplines that hits the street and has no takers drives down its own value and the value of diplomas like it.

Parents who choose to sleepwalk through these economic times when it comes to choosing post-secondary education are bringing about precisely the outcome they spent so much money trying to avoid. Absolute trust in the inevitability of work for all bearers of all university diplomas is out of place in 2015.

Management training: Keeping it on the company campus and How to join the 1%are two articles from The Economist that show just how quickly some in the business community adapt to new ideas. And if those ideas don’t pan out, there are always new ones waiting in the wings.

I’m a firm believer in the need for healthy, affordable universities. My children and their spouses are now established undergraduates and post-graduates. Where else are the people we’re going to need to get on with the rest of our life going to come from if not from universities, community colleges and technical schools? I’m not just talking about medical and other professional people. I’m talking about people who’ll come up with better ideas than the ones we have now about climate change, air pollution, land use, R & D, manufacturing, natural resource extraction, inadequate transit and drought in key food-producing regions of the world, just to name a few.

Those temp jobs that always seemed to be there for anyone who needed a little spare cash every now and then have morphed into the new normal for 50% of working people of all ages, yourself included, dear reader. And not only in Canada.

Head-in-the-sand attitudes, not mass hypnosis, are responsible for the outbreak of PEV (precarious employment virus), aided and abetted by vote-buying tax breaks paid for with taxpayer dollars that were supposed to generate work for Canadians but instead have accumulated to the tune of over C$500 billion in dead money according to former Bank of Canada and now Bank of England governor Mark Carney:

“Bank of Canada Governor Mark Carney has taken a rare swing at corporate Canada, accusing companies of sitting on huge piles of “dead money” that should be invested productively or returned to investors. ‘Statistics Canada numbers show Canadian non-financial corporations with a cash hoard of $526-billion at the end of the first quarter of 2012, an increase of 43 per cent since the recession ended in 2009.’”

Universities cater to the demands, not the needs, of the students who make up the bulk of their clientele. What students need is a strategy to deal with employers who won’t offer full-time employment. One way to deal with them is to not plan to work for them. Would you approve a mortgage or car loan for someone who can only find part-time work? Wouldn’t it be ironic if we reverted from being a cashless society to a cash-only society? As PEV continues to spread and economics forces more and more families to consider options other than university, employers will have to raise salaries, train, and revert to the full-time employment model to attract the talent they need. But that won’t happen overnight, if it happens at all.

A review of the literature dating back to the early 2000s will show that many universities are struggling to cope with reduced government funding, declining enrollment and the impact of technology. You might want to read what James Duderstadt, President Emeritus of the University of Michigan, had to say about the subject in the ‘Emory Report dated March 20, 2000.

The era of ‘you pay your money and you take your chances’ is drawing to a close. Forty million Americans owe US$1.2 trillion in student debt. Seven million have already defaulted on those loans. Many of them haven’t or won’t complete their programmes. Still, universities have no incentive to scale back their student intake based on the demands of the economy when they can collect 100% of their ‘fee’ from each graduate they produce regardless of whether that graduate finds work or not. It’s that intake that attracts government funding. Why does the buying public accept that?

According to The Guardian, the Bank of England believes that contract work is here to stay. Parents and their children may not agree with that assessment, but due diligence demands that, at the very least, they take all reasonable steps to assess its implications.

If you have questions, PDD has answers. I invite your inquiries and your comments.

Sincerely,

F. Neil Morris
President & Founder
Personal Due Diligence

+1 (905) 273 9880

A 5-minute survey on hopes, dreams, tuition, precarious employment and post-secondary education

Higher education is the single largest investment most people will make in their lifetime, after a home

— Neil Morris, Founder & CEO, the Personal Due Diligence Project (PDD)

Saturday, April 18, 2015

 

Conventional wisdom and statistics have traditionally maintained that an advanced education is one of the better ways to protect children from an uncertain economic future. In some cases it still is, but in a growing number of what used to be safe cases, it isn’t.

“Don’t trust anyone over 30” defined the ’60s. “Ich bin ein Berliner” defined the Cold War. Some day, a future historian may paraphrase Stephen Leacock and say that we were living in a world “[riding] madly off in all directions” with an iPhone in one hand, an iPad in the other and (as of April 24th) an Apple WATCH on its wrist.

That all 3 three devices originated with a single company is a fascinating story in its own right, and it’s still being written as you read this. The WATCH is the first all-new product to be conceived, developed and released since the passing of Steve Jobs.

Also evolving is the 140-year-old company that was once considered the antithesis of Apple. That evolution has given rise to WATSON, and, among other things, to a 7-year contract with Apple to develop apps for the iPhone. That company is IBM. You owe it to yourself and your children to watch and THINK about this interview with IBM CEO Ginni Rometty from start to finish (15 minutes). Then there are C|NET stories 1and 2 you can find here. The big story is the evolution of technology. The really big story is how it’s contributed to the evolution of the 7.2 billion people who live on this planet.

All of the companies mentioned in these stories accepted that to survive, they had to leave large parts of their past behind. Now comes the question, “How will our thinking have to evolve so that we and our children can survive precarious employment? It’s because of that question that I hope you’ll take 5 minutes to complete PDD’s on-line survey ‘Hopes, dreams and tuition’ by clicking here. And to ask that you pass this link along to anyone you know who plans advanced education for his or her children. All responses are strictly anonymous. The survey tool does not identify respondents.

Thank you for your interest and your participation.

Sincerely,

F. Neil Morris
Founder & President
The Personal Due Diligence Project

+ 1 905 273 9880

 

Back to the Future: some land, a horse and a plow

The twenty IBM sales recruits sporting three-piece, dark blue suits with sincere tie, long-sleeved-button-down-collar white shirt and wingtip shoes (brogues) had just learned that we had left the letters on the nameplates in front of us undisturbed for three days, two days longer than normal. Bob Oliver from L.A. became Bobo Liver. Boys will be boys.

IBM 403

The “big blue machine in the corner”

The morning’s delivery of doughnuts and various and sundry hot and cold beverages from the nearby bakery in Princeton, New Jersey was sitting on the “big blue machine in the corner”, an IBM 80-column-card-based 403. We were about to learn how the company’s compensation plan worked.

After what was left of the day’s doughnuts had been cleared away, our instructor asked each of us what kind of car we were driving. Anything less than a Mercedes-Benz would have to be upgraded. Keeping up our car payments would be the incentive to exceed quota. But he assured us that with time, we’d be earning more than enough to make the Benz affordable.

None of us bought the Benz, but the message stuck. They wanted us to stay, they wanted us to perform and they wanted us to succeed. That was in 1968: what a difference almost 50 years has made.

The 2015 that Robert Zemeckis envisioned in the 1989 sci-fi movie Back to the Future Part II makes no mention of precarious employment nor of the corporate victory over labour. Neither did IBM in the late 1960s because, back then, no one saw it coming. But it’s here now and it’s impacting on developed and developing countries as this is being written. You can read about the consequences to date in the PEPSO report entitled It’s More than Poverty.

As in most crises or gathering crises of this kind, there’s much discussion about research into the problem, but very little about action. People are at risk and are suffering now. We’re especially concerned about whether parents are factoring this new reality into their plans to invest in post-secondary education for their children, or ignoring it.

As parents in our own right, the position of the Personal Due Diligence Project is that parents must be strategic and pre-emptive in how they approach preparing their children to support themselves. We’ve already begun a survey of parental attitudes about higher education and the extent of their understanding of the implications of just-in-time work.

Not every employer subscribes to this madness. There will be no winners as a result of precarious employment. Driving down the buying power of working people will drive down the demand for the goods and services their employers provide. A farmer looking for ways of conserving money in hard times hit on the idea of cutting back on the quantity of oats he fed to the horse that pulled his wagon. On the day he reduced the quantity to zero, the horse died of starvation.

No one involved with the Personal Due Diligence Project is a Luddite. Far from it. But what we do understand is that machines crave nothing, demand nothing and buy nothing.

As for our governments and business leaders, it wouldn’t surprise us if some bright young bureaucrat came up with the idea of granting unemployed and underemployed Canadians title to 10 acres of land, a horse, some oats and a plow.

Neil Morris
Founder & President
The Personal Due Diligence Project