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2013 February 03 Sunday
Late Career Workers Hit Hardest By Declining Industries

Catherine Rampell, an economics writer at the New York Times who consistently comes up with good topics, reports on big drops in earnings power by those in their 50s and 60s since the last recession.

These Americans in their 50s and early 60s — those near retirement age who do not yet have access to Medicare and Social Security — have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company.

Rampell's key observation: older folks are concentrated in older (and shrinking) industries. Are you working in an older industry? Do not wait until the axe falls. Continuously retrain and look for better opportunities. Even service jobs are getting automated.

The robots are coming. Many occupations will get automated out of existence. Robots are taking over middle class jobs.

With each month, the US economy becomes steadily more automated. In January the US economy added just 4,000 manufacturing jobs, and the net increase since July is zero. Yet last month, manufacturing activity rose by its fastest rate since April, according to the Institute for Supply Management. The difference boils down to robots, which pose an increasingly nagging paradox: the more there are, the better for overall growth (since they boost productivity); yet the worse things become for the middle class. US median income has fallen in each of the last five years.

Hear my call: Complacency is your enemy. Have you done anything in the last few years to better prepare and buffer yourself from the macroeconomic trends of outsourcing, automation, rising sovereign debt levels, immigration, and declining median income? Seriously, do you just complain about the government and prophesize doom? Or are you taking action for yourself? If the latter, what are you doing?

If you are not doing anything is this due to a feeling of helplessness, laziness, or a feeling of immunity from macroeconomic trends?

Share |      By Randall Parker at 2013 February 03 06:09 PM 


Comments
Zamman said at February 4, 2013 11:24 AM:

Well, yes. There is a feeling of helplessness. There are a few difficulties that must be solved in order to create a new society of well being:

- Industrial production must continue without having to go through a total centralization of the few. That is, without having to end up in a technological fascism.
- Renounce to the "free market economy" which has mostly become a fairy tale.
- Renounce the goal of an ilimited growth and change to a selective growth in order to avoid the risk of an economic disaster.
- Create working conditions that provide eficacious motivation besides material earnings, but also other psychological satisfactions.
- Foster scientific progress while at the same time avoid that this becomes a danger to the human species.
- Security has to be provided to the individual so that he doesn't have to depend of a bureaucracy to support himself.
- Production must aim towards a healthy consumption.
- Radically reduce the shareholders' rights to determine production based only on earnings and expansion.
- All the people in a society must actively participate in the economic functioning as well as in politics.
- Decentralize politics and all industry.
- All forms of brain washing and harmful propaganda must be forbidden.
- The great differences between rich and poor nations must be eliminated.
- Introduce a guranteed anual income for everybody that empower the people not to tolerate abussive or tyranical authority of those with economic power.
- There should be some kind of supreme cultural council in charge of advising government, politicians and citizens in all issues in which knowledge is necessary.
- We must have an eficacious media and information system.
- Scientific research should be separated and independent of corporations and the military establishment.
- Some others too.

J. said at February 4, 2013 11:58 AM:

- Security has to be provided to the individual so that he doesn't have to depend of a bureaucracy to support himself.
- Introduce a guranteed anual income for everybody that empower the people not to tolerate abussive or tyranical authority of those with economic power.

Indeed.

Randall Parker said at February 4, 2013 8:20 PM:

Zamman,

If you look to politics for solutions you are going to be frustrate and you will wait in vain.

Overcome the feeling of helplessness and work on improving your own value in the market. At most you can count on yourself. If you can't motivate yourself to study and work harder you can't even count on you.

An efficacious media and information system: You can go take courses at the Coursera web site. Really, the biggest obstacle is in your own mind. The information is there. Its quality is rapidly improving.

Brenton said at February 5, 2013 2:56 AM:

"The robots are coming. Many occupations will get automated out of existence." .. Your mentions of technological unemployment are interesting to me. Though when I try to study it from other sources, the idea of long term technological unemployment is often referred to as the 'Luddite Fallacy'. Do you have previous blog posts that address this or any links that I could check out in debate of this? Sorry if I do not make much sense... I have a fever. Also off topic, thank you for your blog... I've enjoyed reading it for years (?) now.

SOBL1 said at February 5, 2013 5:28 AM:

Minimizing debt to nothing. Per the TBTF + too big to jail banking-government system, we will not see a debt wipeout so I want to keep my debt down so that if something happens to my earning power, my monthly necessary monetary outlays are minimal. My monthly mortgage is 15% of my monthly income, and it will be killed off before 2020. My other focus is on networking in my industry and industries that partner with my direct industry. I also keep in touch with government regulators and other officials related to my industry.

This political-economic system can't last forever, but it will last for longer than the next few years. The US has gone through multiple crisis periods where the prior political system changed drastically and the economic focus changed as well. We are no different.

James Bowery said at February 5, 2013 9:03 AM:

Minimizing debt to nothing is a bet against price inflation following on the heels of monetary inflation, as well as a hedge against unemployment. So it is an optimization problem.

James Bowery said at February 5, 2013 9:12 AM:

I think the thing Randall is missing is the profound social instability created by bad political economics. While it is likely true there is no political solution (unless one considers war to be politics by other means), one's priorities need to be on setting up a sustainable situation for the eventuality that the cities become virtually uninhabitable with little warning.

See http://sortocracy.org for a preemptive approach to war.

R. Jones said at February 5, 2013 10:05 AM:

See Gwern on technological unemployment: Neoluddism

md said at February 6, 2013 7:23 PM:

"An efficacious media and information system: You can go take courses at the Coursera web site."

LOL, Randall! Sounds like you haven't been on a job market in a long, long time (ever?)
Because most employers are incompetent themselves (HR departments and all), they do NOT look for competence. Nope. They look for credentials. And Coursera won't help you there.

Randall Parker said at February 20, 2013 8:48 PM:

md,

I work for a living in a very competitive industry and in a very competitive occupation. I switched jobs a couple of years ago. I previously switched jobs about 6 years before that. I've interviewed lots of people. I know lots of people who interview lots of people. I've recommended people for hire and layoff in recent years.

Incompetent hiring processes: and there are also pretty good hiring processes. I've been thru both. Most recently the latter.

James,

On virtually uninhabitable cities: So then the problem becomes the desperate people and predators who head out into the rural areas. I think how to survive the collapse of civilization is a very non-trivial problem. The more I read and think about it the harder it looks. Every TEOTWAWKI disaster novel throws up more curves that I hadn't thought of. Some of these novels are not great literature. But the writers have thought up angles I hadn't considered.

The hardest part by far: how to not attract the attention of predators?


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