From 538: Manufacturing Jobs Are Never Coming Back

In a word: automation.

The suggests presidential candidates are making promises they cannot deliver. We know where this leads.

- Click here for the article.

A plea to presidential candidates: Stop talking about bringing manufacturing jobs back from China. In fact, talk a lot less about manufacturing, period.

It’s understandable that voters are angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And asEduardo Porter wrote this week, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers. But rather than play to that anger, candidates ought to be talking about ways to ensure that the service sector can fill manufacturing’s former role as a provider of dependable, decent-paying jobs.|

Here’s the problem: Whether or not those manufacturing jobs could have been saved, they aren’t coming back, at least not most of them. How do we know? Because in recent years, factories have been coming back, but the jobs haven’t. Because of rising wages in China, the need for shorter supply chains and other factors, a small but growing group of companies are shifting production back to the U.S. But the factories they build here are heavily automated, employing a small fraction of the workers they would have a generation ago.

It's not magic. It's data science.

Thst's what Civis Analytics claims anyway.

I'd say this is the future - but it's really the present. And its a reason you might want to take a bunch of stats classes.

- Check it out.

From 538: The Best Jobs Now Require You To Be A People Person: And that’s better news for women than for men.

File this under "old guy giving you advise." The author - building off an argument in an academic paper - points out that the ability to communicate clearly are necessary for landing the best jobs. This is on top of the normal skills you are expected to have.

So maybe all these communication assessments serve a purpose.

- Click here for the article.

As technology allows us to automate more technical jobs, new research shows that people skills — communicating clearly, being a team player — matter more than ever. And women appear to be the ones capitalizing on this shift in the workplace.

“The days of only plugging away at a spreadsheet are over,” David Deming, an associate professor of economics at Harvard, told me. Deming is the author of a new working paper, “The Growing Importance of Social Skills in the Labor Market,” which shows how today’s high-skill, high-paying jobs — like consultants and managers — increasingly require interpersonal skills.

It’s not that hard skills are suddenly less desirable. Training in mathematics, computer science and other STEM fields (what Deming would count as “high cognitive skills”) is still a great investment; that “plugging away at a spreadsheet” is still valuable. “High-cognitive-skills workers still earn more,” Deming said, “but social skills increasingly are a complement to cognitive skills.” He argues that having strong cognitive skills is a necessary but not sufficient condition for a high-paying job.

Social skills have become more important for workers because they provide a crucial advantage over a frequent competitor: technology. A 2013 paper by two Oxford researchers projected that nearly half of U.S. jobs would be vulnerable to automation within 20 years. But “computers aren’t good at simulating human interaction,” Deming said. That means a job as a manager or consultant is harder to automate, and the skills those jobs require become more valuable.

The increased student loan burden has an impact on career choices?

Increased debt is out of sync with starting salaries in many fields. Some may not seek to enter certain careers because they will not allow them to pay off theirs loans.

From the Fiscal Times, federal legislation has been introduced making it more feasible for students to pursue low paying fields, like teaching.

New federal legislation is making it easier for those in lower-paying jobs to pay off their school debt, says Edie Irons, communications director for the Institute for College Access and Success, Oakland, Calif. Income-based repayment, which became available in 2009, allows those with federal student loans to cap monthly payments at a percentage of discretionary income.  After 25 years, any outstanding debt is forgiven.

For those who choose public service jobs like school guidance counselor or public defender or non-profit health care, a separate program offers federal loan forgiveness after only 10-years.  “This is a very important program for the people who qualify for it, especially if they have gone to graduate school and taken on a lot of debt to become a social worker or a teacher,” Irons says.

Aware that debt worries are keeping some students away from lower-paying professions, Scripps College in Claremont, Calif. has taken steps to limit loan amounts in its financial aid packages. It has put an annual $3,500 cap on lending, limiting students to $14,000 over their undergraduate careers. “We were concerned that students were mortgaging their futures to get college degrees, and we didn’t want that to happen,” says David Levy, director of financial aid. “We wanted students to be able to follow their passions.”

ROI
ROI

Which technologies that will rive the future?

I offer this as a public service to my students. In case you are considering different careers.

What types of jobs will be available in the future?

And will these be good jobs? Are face with increased inequality in the future? Here's commentary:

The NYT wonders if the good jobs are gone, and whether governmental policies can address this issue. Can the market - on its own - create the next wave of middle skill jobs that will limit increased inequality?

Richard Posner points out the various ways that technological advances displaces - but does not eliminate - labor. While he mentions jobs that do not require high IQ's he points out that many jobs that are specialized - including the practice of law - are vulnerable.

He has this scary point to make about driverless cars:

Take the case of the driverless car. This technology is advancing very rapidly and has great promise for reducing labor costs (drivers), traffic accidents (for example by eliminating drunk driving), traffic violations, and traffic jams (by optimizing speed, lane usage, and choice of routes and times). There are approximately 4 million truck, taxi, limousine, and bus drivers in the United States, not to mention gas station attendants and traffic policemen. Not all these jobs will be eliminated overnight, but they could go quite fast.

He also points out that these trends - coupled with increased life expectancy - wil lincrease the dependent population:

These trends bear on the current debates over the size of government. Technological advances are increasing longevity, and with it an increase in the dependent population. By reducing demand for workers, and therefore employment and wages, in many labor markets, the same technological advances may be creating a second dependent population, consisting of people of working age and their children who cannot support themselves without public assistance that will either replace or augment wages. Republicans may therefore be tilting against windmills in thinking that the size of government can be reduced.

Gary Becker tells us that the future will not be kind to low skilled workers, and that the rewards for skilled workers may not be as great as they have been in the past:

During the past 30 years the market for workers with few skills has been weak pretty much everywhere. The reason is that economies, including developing economies, have increased their demand for knowledge workers at the expense of low skilled workers. The future is not likely to be any kinder to workers with little education and few other work skills.

Various forces have favored skilled workers during the past several decades; indeed, many of them began much earlier. Technological changes and automation, including the development of computers, the Internet, and electronic controls, have reduced the demand for certain types of skilled workers, such as secretaries and clerical workers. They have increased the demand for workers who command considerable knowledge, and who know how to access any additional knowledge necessary to perform various tasks.

He is critical of governmental policies that impede the incentives for individuals to increase their skill levels, as well as those that limits access to the opportunity to do so.

4D printing?

Now products are designed to assemble themselves. What will this do to jobs?

How to spin jobs numbers

Neat idea - take Romney and Obama's rhetorical techniques and apply them to the others' numbers.

The House passes the Jumpstart Our Business Startups Act

Its the J.O.B.S. bill - get it?

Story from the NYT:

The House overwhelmingly approved legislation on Thursday to ease small businesses’ access to investments and capital markets, a sign that the shadow of the November election is pressing Congress into action.

The large margin of victory — the bill passed 390 to 23 — on the Jumpstart Our Business Startups Act is expected to propel the legislation into law. Senator Harry Reid of Nevada, the majority leader, said a Senate version would probably be unveiled early next week. It largely reflects the House bill, which is known as the JOBS Act, and Senator Charles E. Schumer, Democrat of New York, said he expected it to pass before the end of the month.

The vote came on the same day that Speaker John A. Boehner of Ohio said that the House was likely to set aside contentious efforts to draft its own transportation and infrastructure bill and take up a bipartisan Senate version once it passed. The Senate version cleared a crucial procedural hurdle on Thursday on the way to expected passage early next week.

- More commentary from The Hill:

One piece of the bill, H.R. 3606, would create a new class of companies labeled as "emerging growth companies" that would enjoy relaxed rules under the Securities and Exchange Commission (SEC).

The bill also ends an SEC ban on small company advertisements to solicit capital, allows the solicitation of funds over the Internet, known as crowdfunding, increases the offering threshold from $5 million to $50 million before SEC registration is required, raises the shareholder registration requirement from 500 to 1,000 shareholders, and increases the number of shareholders allowed to invest in community banks from 500 to 2,000.

- Forbes wonder if the bill will encourage fraud.

Are manufacturing jobs gone forever?

Building off the post below, this article argues that yest they are.

How many people are employed in new industries?

In one of the 2301 sections yesterday - while we talking up the assignment on the current state of the (constitutionally authorized) post office - we discussed the fact that newer industries tend to employ far fewer people than traditional industries. This graphic makes the point. Some companies with the highest market capitalization have very few employees: