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BERI S.A. Chairman Dr. Ted Haner Shares Thoughts on Future of Jobs

      A structural change has occurred, rapidly in the past decade, as basic as the industrial revolution.   The impact of technology exploding with jobs requiring advanced skills and eliminating the need for many of the people without those skills was postponed at the turn of the millennium.    Jobs were then created with borrowed money, and promises of politicians seeking reelection were fulfilled by providing unsustainable benefits.   A decade of prosperity as fragile as a house of cards took place until 2008.    The effects of the immigration tsunami from poor to prosperous countries during the period of expansion were not seen as a severe problem.   In 2012, the view is different.   As surely as the Berlin Wall came down and the cold war ended, the reality of the “Great Recession” ended the false prosperity.    
 
      In the United States, the U.S. Bureau of Labor Statistics predicts 9.42 million net new people will enter the labor force in the 2012-2020 period.    The total excludes the millions of illegal immigrants.    This level of entrants and new jobs requiring educated professionals and skilled labor mean that the level of unemployment and underemployment will change minimally in the U.S. during the coming years.   It also means that economic expansion will be slow without the consumer buying reminiscent of the mid-2000s.

      In the past decade, two nations developed within advanced countries.   A “haves” nation has emerged, filled with well-paid, educated people, successful entrepreneurs, and those trained in marketable crafts and trades.   This space is also inhabited by the “have nots” comprised of the minimally employed and the hopelessly unemployed.   The conflict between the two is ancient in its origins.   However, the “haves” in this millennia do not come from a single class, or ethnic group, or religion, etc.   These people have chosen a career path that enables them to demonstrate their capabilities to an employer, remain employed, and, in many cases, become very wealthy.

 Can you imagine people fighting in line for their place to apply for a low-paying job?   A rare occurrence in 2000.   It is not rare today, nor tomorrow.   The line is probably comprised of:   Citizen and naturalized citizen.   Documented and illegal immigrants.   Pushing and shoving to be hired for the opening on the loading dock (used as symbolic of low-skill jobs).   The applicants want to be full-time, not part-time.   Earn real money (more than minimum wage).   Have some benefits like overtime.   The unthinkable has become real, not fiction.   It involves a collection of people who have come to realize that they have minimal marketable job skills in the economy of today and tomorrow.   Many of the people in the line have depleted their financial reserves.   They might have been on the street if it were not for employed family and/or friends.   They are running out of options if they do not get the job, or income from something.   Too often the day ends with, “See you tomorrow at the next line.”

 In 2000-2006, loading dock jobs were not important.   Governments were hiring, not firing.   Companies employed people who were, in reality, not fully occupied.   Revenue streams and cash flow were good, and expansion was on the horizon.   Added business would fill the day of those underemployed.   Today, any marginal employee is dismissed.   Both governments and businesses claim that they may need people in the future, but the future is probably many years away, not many months.   Maybe never.   Those with by-passed experience, the wrong education to get a job, limited capabilities, etc., are competing for the jobs offering a subsistence existence.   These “have nots” are vulnerable and desperate.   They feel betrayed by society.   Many can be mobilized into cells, gangs, jihadis, movements, etc., which give them reason for their existence.    What happened?

1. Fewer jobs above the loading dock level are being created relative to people wanting better paying work because technology often improves the quality and cost of making goods and services by replacing people, mostly those whose skills are no longer competitive, but also in administration, quality control, marketing staff support, etc.

2. Students with the type of degrees needed to fill job openings are barely adequate in number but are a decreasing percentage of the total work force, including unemployed and underemployed.   Some employers must seek foreigners because of unfilled openings.   Part of the shortage in applicants for better paying jobs is the cost of education, employers giving preference to higher ranking universities, and the stagnant number of acceptances at these universities because of budget constraints.

3. In the midst of this human calamity, entrepreneurs with eclectic backgrounds and technicians that have kept their skills current and upgraded their qualifications over time will be prospering.   The dreams of these people and their success stories started with a combination of courage, ideas, and basic skills that were enhanced over time.   These men and women refined their capabilities as rapidly as change required.

4. The jobless rates have become political statistics.   Governments, unable to create jobs in the public sector because of austere budgets, will report the totals without those people who no longer look for employment, illegal immigrants, many documented immigrants who depend on work in ethnic enclaves, and the young people who give up on the system and turn to gangs and crime.