Prepare for a Labor Surplus, Part 2

As this Christmas departs into hard winter, I am seeing more and more industries shifting.  The overall economic news is good, though.  Local news in Portland indicates our economy is getting stronger, even to the degree where arguments over a long derelict area of the city are starting as office workers move into formerly industrial buildings.  On a national level, Willard Witte, an emeritus professor of economics at Indiana University's Kelley Business School, predicts a year where we will be breaking out of the slow growth that has plagued us since 2009.  Even with these optimistic predictions, Alan Greenspan, former head of the Federal Reserve, went on record saying we still have a sluggish economy.  These bright spots in the greater economy indicate that a labor surplus due to technological causes may be alleviated by workers shifting fields, but if Greenspan is correct, we should be thinking about slow growth as a future norm.  (You might want to also read The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better for a lighter look at this phenomena).  These musings lead into the next way to prepare for a labor surplus.

Stay Nimble

Part of your plan B should include being able to shift your plans in the face of a changing environment.  If you plan to get into retail as your plan B, consider that retail is showing cracks right now.  Perhaps something like technical writing or entertainment could work better.  Let's take a quick look at retail.

Retail, long considered the place for people to refuge when other industries hit the skids is showing signs of changes. In our local market, Eddie Bauer is closing a store in Lloyd Center.  Also in Lloyd Center, but in other places as well, Nordstrom is closing stores.  Radio Shack looks to be moving into Chapter 7 January 15th, in a prime example of technological self elimination.  Most of Radio Shack's most popular sale items are now carried on a smart cell phone, so the demand is not there, and they failed to respond to people's new shopping patterns.  Other retailers having trouble include Aeropostale, Sears, and a perennial favorite, JC Penney. 

Changes in people's shopping patterns are leading to malls being demolished, or seeing them turn into data centers.   This is nothing new, as the Dead Malls web site confirms.  Much of the shopping is moving online, with a 15% online shopping increase in 2014.  Of course, that 15% increase is also a 10 - 15% decrease for brick and mortar stores.  In the future, successful malls and retail centers will have to depend on a mix of entertainment and retail to stay afloat. Some stores use a hybrid approach by allowing customers to order online and pick up in store.  WalMart, and Macy's come to mind quickly, but I am sure they are not the only players. 

If you stay nimble with your plan B, perhaps rather than working retail, you could write catalog entries for retail online operations.  Or work in online order fulfillment or customer service.

Look for the opportunities and take advantage of them.

Change Where you Live

Most people live in large cities.  This is a relatively new phenomena.  I went to Las Vegas and discovered my cabbie was an engineer.  He accepted a job there designing gambling machines, at a company that went out of business.  Other local companies didn't need his skills, and he was flying out to different cities to apply for jobs at great personal cost.  If you live in a small metropolitan area, then you may find the opportunities aren't there.  Oregon is a state with few company headquarters.  This creates a situation where the median salaries are low.  I grew up in Connecticut where many companies have headquarters, and we all experienced better pay and opportunities there than in Oregon.  Connecticut was also part of the East Coast megalopolis, so we could find jobs easily from Boston to New York City.  Also factor in what you do for a career.  I'm sure Las Vegas was much better for restaurant and casino workers than it was for an engineer.  Above all, stay flexible, there are no hard and fast rules for this.

For every piece of advice, an exception always occurs.  A successful Professional Engineer, I.B. Storey, started his practice in Charlottetown, PEI, Canada.  He now has an office in Florida too, but at the beginning PEI was a remote location with a plane ride to almost anywhere having the large energy consuming facilities his practice depends on.

Conclusion

We're in a changing employment market.  Existing jobs are disappearing and changing.  New jobs are starting, and full time employment seems to be shrinking.  (Part time jobs are expanding)  I'm theorizing this is due to a long-term technological cycle called a Kondratiev 55 year cycle combined with macroeconomic trends.  More on Kondratiev later....

I'm envisioning a return to cottage work conditions similar to British weavers prior to the adoption of large mechanized looms.  I think the cottage of the future will center around a work room equipped with a means to communicate at a long distance, printers, 3D printers, office equipment and equipment to make items for barter or sale.  The cottage of the future won't be bucolic, though.  Most will be in high rise buildings in a dense metropolitan area. 

The cottage of the future is the end point; the topic of this series of two posts is how to survive the years between now and an emerging new system.  Work on your plan B, become as self sufficient as possible, be ready for change and examine where you live.