Post-industrial employment: adjusting to a new world

Six years ago I wrote a review of Robert Reich's book Reason. Reason was a reaction to the GOP's loony rule, but Reich was also very concerned about the fate of the middle class. He was worried that only knowledge workers were going to have work. His answer was better education.

I disagreed. I thought knowledge workers were very much at risk in a "winner take all" world, and I was skeptical that education was really a universal solution (emphases added now)...

... Reich is persisting in the 19th century belief that humans are fundamentally malleable -- at least when young.

Most of the research of the past 10-20 years points to a more complex picture...

... the evidence is strong that humans are not endlessly malleable. This is an increasing problem, because 21st century America rewards a fairly narrow range of workers. In the new-world, many of the old-middle class may not have a happy home -- no matter how hard they retrain. In a fundamental way, many Americans may be "disabled" for the modern workplace.

Reich should not be so quick to write-off redistributive solutions. We will need some creative thinking to produce a healthy American when the true "disability" rate starts to top 30%.

I think the world is coming around to my perspective. For example (undated articles are recent):

• The New Poor - In Job Market Shift, Some Workers are Left Behind - Catherine Rampell
• Plan B - Skip College - Jacques Steinberg - NYT
• The Way We Live Now - Students of the Great Recession - David Leonhardt - NYT
• Your Money - Another Debt Crisis Is Brewing, This One in Student Loans - Ron Lieber - NYT
• College Education, Good Jobs: Why Degrees Are Overrated - TIME (Feb 2010)
• The paradox of 21st century prosperity (Reich, 2009)
• Gordon's Notes: Why your daughters should be roofers -- not architects (3/23/2004)
• In the Basement of the Ivory Tower - The Atlantic (2008) - college as a waste of time for some
• Krugman on globalization: how to manage the losers - Krugman -NYT (2007)
• Where has the money gone? To the very American oligarchy - Krugman - NYT (2006)
• The day of the American engineer has passed (2005)
• Shaken and Stirred - DeLong and Cohen - The Atlantic (2005)
• The New Feudalism: Return of the Trades (2004)
• On redistribution (2004 - Baumol's Disease)
• Jared Bernstein & Brad DeLong on "Outsourcing": a dialog with interesting discussions (2004)

I hope you've taken the time to scan at least a few of the above (esp. Rampell, Steinberg and the discussion of Baumol's Disease). Taken together they reflect a consensus that's emerged over the past six years. I'd summarize it this way:

1. College has become insanely expensive. (The College Industry will be the next bubble to burst.)
2. There's a growing disconnect between the costs of college and the value delivered.
3. Many students would be better served by skills ("vocational") training rather than traditional scholarship.
4. Technology and globalization have eliminated large numbers of office jobs and made some old skills obsolete. Many of the middle-aged middle-class people who lost their jobs in the Great Recession won't work again.
5. In an age of outsourcing, knowledge work may be no more secure than factory work.

Ok, so the last isn't part of the consensus ... yet. It's still mostly a suspicion of mine.

So if we really are entering a world where many formerly middle-class adults won't be able to find stable employment, simply because they lack the skills for the jobs that do exist, what should we do?

College is probably not the answer. In 2007 and 2004 I suggested:

• universal health care (astoundingly, this might happen!)
• separate benefits from employment
• intelligent retraining programs - based on individual skills assessments and locally available employment
• As part of social security reform, eliminate the idea of age-specific retirement. Income has mandatory contributions to tax-deferred funds and non-work (study, vacation, job seeking, whatever) draws from those funds*.
• rethink the meaning of disability in a post-industrial society

The last will be the hardest, but I think we'll get to all of these in time. Civilization is stronger than we think. One way or another, we'll figure this one out - including finding a future for those who don't seem to have a place in the modern economy.

* I first proposed something like this in a 1977 Women's Studies course essay. I just remembered that ...

Update 6/2/10: Robert Reich on "Entrepreneur or Employed". Excellent summary. The modern 50+ knowledge worker is not "unemployed" s/he is "self-employed". S/he is a masterless, "Ronin" contract worker. Reich's recommendations are very close to what I wrote above. There's one in particular I like: "... Since they can no longer depend on tax-free corporate matches to their 401(k)’s or I.R.A.’s, they should be entitled to tax credits that match them". This is one measure Obama might be able to squeak by the GOP loons in Congress.

Obama and the Gulf: Why I remain grateful - and puzzled

We're a long way from knowing what went wrong in the Gulf. It does appear, however, that we don't have the technology to cost-effectively extract this kind of oil (assuming cost includes environmental and commercial damages from accidents). So it makes sense to stop all further exploration and drilling while we reassess our true capabilities.

I like to think that's a common-sense observation. The astounding thing, for those of us who remember GWB, is that my President is saying the same thing ...

Obama Restates Need for More Oil Before U.S. Uses Less - Dot Earth Blog - NYTimes.com

... So the overall framework, which is to say domestic oil production should be part of our overall energy mix, I think continues to be the right one. Where I was wrong was in my belief that the oil companies had their act together when it came to worst-case scenarios.

Now, that wasn’t based on just my blind acceptance of their statements. Oil drilling has been going on in the Gulf, including deep water, for quite some time. And the record of accidents like this we hadn’t seen before. But it just takes one for us to have a wake-up call and recognize that claims that fail-safe procedures were in place, or that blowout preventers would function properly, or that valves would switch on and shut things off, that — whether it’s because of human error, because of the technology was faulty, because when you’re operating at these depths you can’t anticipate exactly what happens — those assumptions proved to be incorrect...

I don't think Obama is Saint. We know he has to have a galactic ego, and we assume he lies about his smoking addiction.

Even so, I almost tear up when I read him saying this stuff. He makes sense. He's not insane, he's not frothing, he is a clear thinker. It's mind-boggling to have a President who's not a whack job.

We had Cheney/Bush. We could have had Palin/McCain. We got Obama.

That still puzzles me.

How the heck did we get Obama? We're not that smart ...

Good news on social security: Obesity

My family spent the afternoon at the neighborhood pool on a hot new-climate spring day. From the looks of things, we'd all do well in a famine. Minnesota has an average obesity rate, so I was seeing America.

We're not going to live as long as we expect. I wouldn't be surprised if average life expectancy began to fall over the next twenty years.

That's good news for social security of course. Now all we have to do is encourage smoking.

Causes of the Great Recession: The Congressional Report

Via Economix, the Congressional Research Service report on proposed causes of the "financial crisis" (pdf). They have a long list of candidate contributing factors, several of my 2/2009 items make the list.

My April 2010 list is much shorter -- in recent times I've stepped back from the intermediate causes and looked to global economic transformation (China, India) and information technology as the true root causes of current and, I expect, ongoing, instability.

The CRS list isn't terribly interesting. They've basically rounded up all the suspects.

Apple vs. Google: I'm caught in the crossfire

John Gruber is a fan of the Apple-Google war ...

Daring Fireball: Post-I/O Thoughts

... It’s exciting, vicious, fun to watch, and ultimately should prove to be excellent news for consumers. Competition drives innovation and innovation raises the bar for everyone. And the bar, for smartphones, is rising quickly.

Like any great rivalry, there are striking differences between the two competitors. Apple and Google are jostling to shift the comparison between the two platforms to their very different strengths. Apple’s strengths: user experience, design, consistency. Google’s strengths: the cloud, variety, permissiveness..

Me? Not so much.

I have made two big vendor bets for my family and me in the past decade. Yes, Google and Apple. Google made me smarter, Apple provided us a relatively hassle free personal computing solution. When I bought my 3G iPhone I experienced the perfect union of the technology giants of 2007.

Then it all came apart. The Apple-Google war sucks. There's nothing fun about it for me.

I have large Apple investments, but if I were single I'd go with Google, drop the iPhone, and run Chrome on my Macs. Yes, I love the elegance of the iPhone, but Google delivers the services I really need for my mobile life - and to be personally productive. Google is sometimes a bit evil, but Apple is the Singapore of computing. Efficient, but ultimately tyrannical. Bereft of Google, Apple is now running with Facebook. Talk about embracing the Dark Side of the Force.

I'm not single though. I have three children, one dog, and today's my 24th wedding anniversary. Google does not get families, Google does not, not, not get children. (I think the Gmail EULA has a teen or young adult age cutoff.) I could live with the rough edges of the gPhone (though my dental grinding would be expensive), but my family could not.

There's no way I'm supporting two platforms. Apple's FairPlay DRM allows up to five users per app or product -- we're a family of five. That's a big advantage for Apple.

So I can't leave Apple. On the other hand, I can't live without Google and Apple's boy-toy Facebook is a bizarro clone of 1990s Microsoft.

So I get hit from both sides. Each time I use Google's crummy, miserable, slow, balky HTML 5 web 2.0 Google Voice app I take a bullet. (Gruber sings the praise of iPhone web apps. I bet he doesn't use Google Voice on the iPhone.)

I don't have a solution. Anyone wanna find a bar with bad country music and drink bad whiskey?

Update 5/29/10: Another blogger shares my pain.

Google TV, Flash, iPhone and Curated Computing - it's all about the DRM

Imagine that Drexler'sengines of creation were real. Imagine we all had devices that could make diamonds, phones, cars and the like on demand. All we needed were some raw materials and energy.

This would be disruptive. DeBeers wouldn't last the day. Economies would collapse. Hellfire would rain down.

Eventually, however, I suspect our complex adaptive world would return to a balance. A new generation of improved replicators would replace the old ones. The new ones would come with controls that made it, for example, impossible to replicate currency. Civilization wants to survive.

We saw this with VCRs. The first recorders were amazing at capturing movies, but later generation devices incorporated "macrovision" copy protection. Recording features became less common, VCRs became largely playback devices. The rebel was subverted.

We're seeing it now with the digital replicators of our era. First generation devices made perfect copies of CDs and even DVDs. Slowly, however, the market is moving from general purpose computers with computers that won't replicate some DRMd video to iPad-style "curated computing". Surprise -- the iPad won't rip a DVD. It won't even rip a CD. (If record companies aren't buying 2nd hand CDs and destroying them they deserve to perish.)

In 20 years, it will be fairly hard to replicate many things. In a world with limited local storage, you may find your purloined media won't survive long in the cloud. The system is strong, It wants to live.

If you think about DRM, a lot of things make sense. Why are Apple so virulently opposed to Flash [1]? Why is Adobe dissembling when they say Flash is open (they published the specs)? Because the video codecs in Flash are not nearly as important as the DRM (Digital Rights Management) technology in Flash. That is most assuredly not open; it's as closed as Apple's FairPlay. What's Google up to with Google TV and their app stores? Check out the DRM to understand. Why are Hulu and Netflix reluctant to sign on the iPad? Because they'd have to substitute FlashDRM for FairPlay. That means Apple would own them.

This battle will rage for a time, but in 20 years it will be largely forgotten -- and the digital replicators will have been tamed. Resistance is futile.

See also:

• Gordon's Notes: The limits to DRM: my new car stereo (in 2007 I was still resisting)

[1] Personally, like virtually all Mac geeks, I despise Flash and consider Adobe to be as decrepit as Microsoft. I agreed with pretty much everything Jobs wrote about Flash in his open letter. I think, however, that even if none of those things were true Apple would be at war with Adobe. Part of Jobs evil genius is that he's a master magician -- he distracts with one hand while he moves with the other.

--My Google Reader Shared items (feed)

Civilization is stronger than we think: Structural deficits and complex adaptive systems

The more humans you know, the harder it is to imagine that civilization can endure. Billions of consumers. Environmental collapse. Climate change. Peak Oil. China's gender wars. The falling cost of havoc. The GOP. Skynet, sooner or later.

It looks hopeless, but on the other hand it's been 58 years since the first fusion weapon was detonated - and we're still here. That's surprising.

It's not just technology that we've survived. It seems impossible that democracies can manage their finances, but they do ...

Adam Smith's Money World - Onc is not Enough

... Greece has its debt bail-out, or appears to have, but there’s still that riot-inducing issue of government budget cuts. Is it even feasible for a government to cut its budget by as much as the International Monetary Fund has demanded of Greece? Yes it is very possible -- all too possible, in fact -- according to the IMF’s own study. In the past three decades there have been at least nine instances in which developed nations have cut their structural deficits by at least 10 percent of GDP...

It's true that some nations do better than others, but it's impressive that, faced with doom, even troubled nations like Greece and the US draw back. For example, to our great shame we reelected George W Bush and Richard Cheney. We did not, however, elect John McCain (now sadly demented) and Sarah Palin.

How does reason emerge from chaos?

We don't know, but many suspect it has something to do with the properties of a complex adaptive system. In our case it's a system built of economics and politics and the noise of the disconnected and, perhaps, the cumulative influence of the rational individual. It's a system that is self-sustaining, a system that "wants to live".

The system is hard to measure, but it's strong. It's also a fractal response -- just as civilization is surprisingly robust, so too are its components. Consider the digital economy. Perfect, near zero cost replication was very disruptive -- but the systems is responding. The iPad, the Flash wars, Google TV, "curated computing" -- it's all about the system responding to the disruption. It's all about the Digital Rights Management (DRM). Of which I will say more ...

--My Google Reader Shared items (feed)

Unanticipated cloud app problems: The child

I've written about several issues with cloud apps. Here's a novel one.

For good reasons, I want my son to have access to email and calendaring, but not to Google search. We use Google Apps for our family domain.

It doesn't work. One feature of the cloud is there are few or no parental controls. One might try OS X Parental Controls, but it has serious issues with https sources. There are workarounds for these limitations, but the workarounds all require full access to Google search.

Desktop apps are a good fit for controlled access, cloud apps are not.

The hungry city

Paraphrased from In Our Time, The City - a history: "Pre-modern cities had death rates that were vastly greater than birth rates."

Organlegging Neuromancer style – China’s liver trade

Organlegging was Larry Niven’s 1970s term for trafficking in human organs. Gibson’s fiction, including the fabulous (1984!!) Neuromancer, featured Chinese organ shops. Cross organlegging with Neuromancer and fast forward to 2010.

How do people not raised on science fiction get their head around the modern world? It’s really a disability of sorts.

Since my 2006 organ trade post (see also) the market has continued to mature …

Blood & Treasure- the liver trade

… Type in Baidu and search for “looking for liver, kidney” and so on words, tens of thousands of results show up, including QQ numbers*, cell phone numbers, some even operate like a company. They not only look for people willing to sell their livers and kidneys, at the same time they also advertise to provide livers and kidneys that match the patients. Reporter contacted number of organ trading brokers and found that they had a clear set of requirements, and the business also formed “one shop stop” service…

Liver segment and single kidney donation is usually survivable.

Is anyone in the US paying attention?

No, I didn’t think so.

* tencent QQ

… is the most popular free instant messaging computer program in Mainland China, and has over 856.2 million users. In April 2010, QQ.com ranked 10th overall in Alexa's internet rankings. The program is maintained by Tencent Holdings Limited (HKEX: 0700), owned in part by Naspers…

I’d never learn this stuff if I didn’t have my Chinese-focused blogs to read. The mainstream media is hopelessly lost.

Update: After posting this, I revisited a link in my 2006 post to a 2004 NYT article. There I found mention of "Organs Watch" - an organization tracking the global organ trade. The web site, however is "under construction"; the notice refers to an August 2009 update that never happened. Nancy Scheper-Hughes led Organs Watch, but the last news of her is from 2008. Reading between the lines of the Wikipedia article, I wonder if she might have gone a bit off the rails ("Israel" and "tentacles" in the same sentence is a bit of a red light). She was still teaching at Berkeley in Fall 2009.

Science fiction and ocean acidification

Zimmer tells us we'll be able to recognize the human era by the sedimentary evidence of ocean acidification and mass extinction.

Sounds plausible. So what should we think of why we find a similar catastrophe 55 million years ago?

An Ominous Warning on the Effects of Ocean Acidification by Carl Zimmer: Yale Environment 360

... Scientists have been scouring the fossil record for periods of history that might offer clues to how the planet will respond to the current carbon jolt. They’ve found that 55 million years ago, the Earth went through a similar change. Lee Kump of Penn State and his colleagues have estimated that roughly 6.8 trillion tons of carbon entered the Earth’s atmosphere over about 10,000 years.

Nobody can say for sure what unleashed all that carbon, but it appeared to have had a drastic effect on the climate. Temperatures rose between 5 and 9 degrees Celsius (9 to 16 Fahrenheit). Many deep-water species became extinct, possibly as the pH of the deep ocean became too low for them to survive...

I'm sure I read this in a science fiction story once. Something to do with smart dinosaurs.

I'm just joking of course. We'd easily recognize the evidence of long extinct prior technological civilization from 55 million years ago. After all, we won't be just a peculiar layer of pollution in 55 million years, will we?

(I really am joking. Though if had been over 200 years rather than "10,000 years" with no volcanic explanation one would have to wonder.)

Krugman discovers humans are not rational

Paul Krugman is a fan of behavioral economics. He’s also fabulously well read, he must have read some anthropology, history, and political science at some point in his life. At heart though, Krugman is an economist. It’s hard for an economist to escape the prejudice that humans are fundamentally rational self-interest optimizers. It’s baked into their culture.

Alas, humans are only partly rational part of the time*. Obama, like every politician, knows this in a deep way. That’s why he ignores Krugman’s political advice.

Krugman can learn though. I’ve read him religiously since he became a byte-stained wretch, and he’s changing. He’s learning politics (emphases mine) …

Krugman - The G.O.P. - Going to Extreme - NYTimes.com

… Right-wing extremism may be the same as it ever was, but it clearly has more adherents now than it did a couple of years ago. Why? It may have a lot to do with a troubled economy.

True, that’s not how it was supposed to work. When the economy plunged into crisis, many observers — myself included — expected a political shift to the left. After all, the crisis made nonsense of the right’s markets-know-best, regulation-is-always-bad dogma. In retrospect, however, this was naïve: voters tend to react with their guts, not in response to analytical arguments — and in bad times, the gut reaction of many voters is to move right.

That’s the message of a recent paper by the economists Markus Brückner and Hans Peter Grüner, who find a striking correlation between economic performance and political extremism in advanced nations: in both America and Europe, periods of low economic growth tend to be associated with a rising vote for right-wing and nationalist political parties. The rise of the Tea Party, in other words, was exactly what we should have expected in the wake of the economic crisis…

Better late than never. The new Krugman will be even more interesting than the old one was.

* I suspect on average, over time, the system in which we are embedded is more rational than it seems, but that’s another post. (Yes, sounds like “psychohistory”, and, yes, Krugman, like me, grew up on Asimov.)

Jean-Louis Gassée on Cloud 2.0 – post of the month

Jean-Louis Gassée blogs on Monday Note. He’s been doing it since Feb 4, 2008.

Gassée has done many things, but he’s best known for having been Apple’s CEO for a time. These days he’s a VC “general partner”. It’s safe to assume he’s rich beyond my paltry dreams of avarice. Why does he bother writing a not-terribly-famous blog? I don’t think it’s for the adword revenue.

My best guess is that he’s helping out the blog’s co-author, and that he writes for love. Alas for those who write to live, his free stuff is better than the best of the WSJ. Such is the curse of early 21st century journalism.

Today he takes on the Google-Microsoft cloud apps war. It’s fantastic stuff (emphases mine) …

Cloud 2.0 - Monday Note

… Last year, Microsoft’s total sales were $58B, down 3% from 2008 … Note the Operating Profit, 35%. The company spends 15% of its revenue in R&D and 28% in Sales, Marketing and General Administration….

… Compare this to Apple’s 29.5% Operating Profit, 3% R&D, and 9% SG&A [selling, general and administrative expense] with a comparable revenue level, in the $50B to $60B range annually…

… Microsoft’s Net Income is 25% of revenue, Apple’s is 22%….

… Microsoft Office represented 90% of the $19B Business Division sales, with a nice 64% Operating Profit … Roughly 60% of all Microsoft’s profits come from Office and a little more than 53% from Windows OS licenses (or what MS calls its “Client” business):

So… Office + Windows, 60% + 50% = 110% of Microsoft’s Operating Profit? The math is complicated by the losses in something called “Corporate-Level Activity”… …and, more importantly, by the hefty 73% operating loss in the company’s Online Services Business:

If I’m interpreting Gassée’s writing correctly, Apple’s numbers are only comparable to Microsoft’s because Microsoft “wastes” a huge percentage of revenue. Microsoft’s R&D percent spend is 5 times Apple’s and Microsoft spends 3 times as much on selling, general and administrative expense – not to mention “corporate-level activity”. If Microsoft were as stingy as Apple, their profits would be mind-blowing. Microsoft Office is a money-factory.

I’m reminded of an old Cringely column, in which he opined that Microsoft could have any profit number it wanted to have.

Gassée continues from numbers to user experience, saying the same things I’ve whined about but that, honestly, I never see mentioned anywhere else

.. Google Apps aren’t Office killers. I’ve been using Gmail in both the free and paid-for accounts. The basic email functions work well, but managing contacts is awful. (Months ago, I heard Google had an internal project called Contacts Don’t Suck. I’m still waiting.)…

… I’ve tried to use Google Docs to write, share, and edit these Monday Notes. Failure. Compared to any word processor, Google Docs feels clunky and constrained, and hyperlinks die when you download the document…

… Google Apps aren’t “there” yet. They’re still clunky, to say nothing of managing the “stuff behind the desk”. They’ve been quickly upgraded–perhaps too quickly– at the expense of the user experience. If managing Google Apps is as complicated as running an Office DVD install program, an important part of the Google theory falls apart. We see the trumpeted announcements of large organizations and governments that have turned to Google Apps, but what we don’t see is a courageous journalist going back to the proud early adopters a year later to tell us what actually transpired.

So why is it that only cranks like me and outliers like Gassée ever point out where Google fails? It’s a bit hallucinatory. Gmail’s contacts function has been terrible for years (starting with the weirdly isolated link to “contacts” in Gmail). Google Docs are still very weak (though about to move up a notch), and things are worse when you look at the channel confusion around Blogger, Google Doc, Buzz and Google Sites.

Really, I do love a lot about Google, but they have to give up on the idea that good design is emergent.

Go and read his Cloud 2.0 post and the “related columns” he references at the end. Don’t forget to marvel at the strange age we live in, where some of the best journalism is done for love*.

* P.S. As a bone to the pros, Gassée drops a broad hint on how they could write something interesting – go to the early adopters of Google Apps and tell us what happened.

My top two blog posts - lessons in markets and humility

I have written over 10,000 blog posts (well beyond Google's 9 month old 5000 post bug), largely for myself and proto-skynet. I imagine some are clever, at least to me.

Of those 10,000, 0.02% get 99% of the comments. Those two are not the clever ones ..

• My MacBook fan was roaring. Why?
• Duct tape and warts: how the HECK does it work?

I'm happy with the first one, though bemused that of all my tech posts this is the one that caught on. It is a more than annoying OS X limitation that a device driver can overheat machines for months or years -- and that Apple store employees sell batteries or replace machines rather than kill a stuck job ...

David H Cape Town said ...

Thank you, Apple store couldn't fix the problem, they just sold me another battery, the new battery power was 50% of what it should be-the roaring fan being all consuming! Once I deleted the Canon printer and a dozen jobs stuck in the queue the fan stopped immediately after blowing for 6 months!

The second is embarrassing. Warts are fascinating, but we really don't know if duct tape does anything special, or anything at all. This kind of unfunded research is, in its own way, as subject to publication bias as very well funded antidepressant research.

Of course I am, as ever, compelled to apply a learning pattern to these findings ...

1. I am very bad at judging what a large number of people will find interesting.
2. If I were trying to attract readers, I'd write more wart posts.
3. Apple needs to revamp their retail training and their technical support algorithms.

Fear the Cloud: Remember the Milk

Remember the Milk, a cloud-based task management service, disabled sychronization this week with Appigo's ToDo.app.

There was no warning. RTM customers who used ToDo.app simply lost sync services.

Fear the Cloud.