Category: Unemployment

Culture Change

07/15/2014

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Job Switching

I continue to make the point that the bet on capital gains from real estate is not through inflation but through speculation. The speculation might be about inflation, but if inflation was the case, we would see employment earnings keeping pace, and they're not. From CBC News July 15, 2014 comes this "Microsoft expected to cut jobs in wake of Nokia deal." and quote:

“We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes,” Satya wrote. “Culture change means we will do things differently.” said Satya Nadella, CEO of Microsoft.

Translation 1:

The management will employ fewer people to give us feedback about our ideas by reducing the number of different levels of employment pay so that our cost of doing business is reduced on our balance sheet. We are forced to reduce our inhouse activities.

Translation 2:

I have a job contract to fulfill and you don't. You no longer have employable skills here.

Translation 3:

Software is eating the world.

"This is the basic insight: Software is eating the world. The Internet has now spread to the size and scope where it has become economically viable to build huge companies in single domains, where their basic, world-changing innovation is entirely in the code. We’ve especially seen it in retail — with companies like Groupon, Zappos, Fab." Marc Andreessen Wired interview April 24, 2013

How Technology Is Destroying Jobs
By David Rotman on June 12, 2013, MIT Technology Review

A less dramatic change, but one with a potentially far larger impact on employment, is taking place in clerical work and professional services. Technologies like the Web, artificial intelligence, big data, and improved analytics—all made possible by the ever increasing availability of cheap computing power and storage capacity—are automating many routine tasks.

Countless traditional white-collar jobs, such as many in the post office and in customer service, have disappeared. W. Brian Arthur, a visiting researcher at the Xerox Palo Alto Research Center’s intelligence systems lab and a former economics professor at Stanford University, calls it the “autonomous economy.” It’s far more subtle than the idea of robots and automation doing human jobs, he says: it involves “digital processes talking to other digital processes and creating new processes,” enabling us to do many things with fewer people and making yet other human jobs obsolete. Full Article Here

"Job Switching" from I Love Lucy
Aired September 15, 1952 on CBS TV

Realtors at Risk

05/10/2014

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"2 deals make $50,000"
Lawrence Dale (opponent of anti-competitive MLS practice)

When I saw this chart of Canadian Realtor Population growth which in the last 40 years has spiked by 336% or six times our civilian population growth of 55%, I am reminded of Marc Andreessen's 2011 quip that "software is eating the world" which lit up the Twitter-sphere and led to a Wall Street Journal article sounding the warning bell to workers who are incorrectly trained and educated.

More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.

Many people in the U.S. and around the world lack the education and skills required to participate in the great new companies coming out of the software revolution. This is a tragedy since every company I work with is absolutely starved for talent. Qualified software engineers, managers, marketers and salespeople in Silicon Valley can rack up dozens of high-paying, high-upside job offers any time they want, while national unemployment and underemployment is sky high. This problem is even worse than it looks because many workers in existing industries will be stranded on the wrong side of software-based disruption and may never be able to work in their fields again. There's no way through this problem other than education, and we have a long way to go.

As data become more accessible, realtor services become less valuable. Have you noticed that most realtors have trouble answering simple questions for fear of being challenged by litigation.

Nearly half of American jobs today could be automated in "a decade or two" according to new research. The Atlantic Jan, 2014

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Here is Thomas Frey (Innovations Editor for The Futurist Magazine) with his view of just a few of the skills (162) that will be highly prized in the future.

Meanwhile in Canada, if we have not already had our brain's drained into a Silicon Valley somewhere, we leave our homes and go toil in the muck of the Athabasca. (Alberta Earnings are 22% above Canada's average - April 2014 data).

Dollar War

02/25/2014

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The 2 Sided Loonie

The chart mashup shows the difference in labour unit cost between Canada and the U.S. in the top panel and the steady drop in the CAD relative to the USD since 2011 (middle panel) and the Canadian balance of trade in the bottom panel.

Only about 30% of Canada's GDP is derived from exporting and most Canadian exporters will enjoy the CAD falling against the USD because most of their export trade (75%) is to the U.S.

But the Loonie remained relatively high against the USD for 5 years (2002-05) and that led to purchasers of Canadian exports to look for alternative sources and that led to more layoffs in Canadian production plants (Bombardier cut 1700 jobs, Kellogg cut 500, Heinz cut 740, Blackberry cut 4500 - Bloomberg).

Layoffs are not easily reversed, and as the top panel of the mashup shows, the Canadian unit labour cost is 14-15% above the U.S. making it that much harder to sell into the U.S. or anywhere else (IMF via Reuters).

As a consumer society, disposable income is also shrinking in Canada as the price of everything we import goes up against the falling CAD and a falling safe haven status compounded by the end of the Canadian Immigrant Investor Program this month which only attracted 130,000 people since the 1986 inception (Globe & Mail).

The foreign investor class has good reasons to look at their Canadian asset portfolios and high on the list will be negative yielding real estate bought in the last 10 years. We could see some drama on the MAR-MOI charts this year if real estate inventory for sale surprises to the upside.

Redundancies

01/31/2014

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Divergence Update
2014 U.K. Edition
New Opportunities

Just kidding; not you dear reader unless you work in app building, robotics or machine language; or as Tom Friedman says, "as long as you are not average". Oh and he also said "Think Like an Immigrant: "We are all new immigrants to the hyper connected world, and new immigrants are paranoid optimists. I better understand what world I’m living in, what the biggest trends are and pursue them with more energy, vigor and persistence than anybody else.”

It should be obvious to everyone that the trend is a new machine software revolution that is capable of replacing not only the middle but the top as well; and Mark Carney, new immigrant that he is, knows the trend.

The Bank of England will cut up to 100 jobs following a 'Value for Money' review, as part of £18m of savings to be made by 2016. The jobs will be cut from the bank's support division, known as Central Services, and equates to roughly 10pc of the workforce in that area. In total the Bank has roughly 3,600 staff. The review, launched last autumn shortly after the arrival of Mark Carney, the Bank Governor, looked at staff deployment and spending and identified savings of £18m to be made by 2016, roughly 10pc of the spending that was under review. Central Services will now be reorganised following the review, providing "new opportunities" for some staff, while other jobs "will not be filled as staff retire or move on". "It is envisaged that there will be between 80 100 redundancies, subject to staff consultation," the Bank said. "The Bank is working closely with the Bank’s union to ensure that affected staff will receive support to find alternative employment." The Telegraph Jan 31, 2014

How long do you think the divergent spread between earnings and housing unaffordability will last?
(see Demographia update for a 3rd party view of value)

VANCOUVER & TORONTO

EARNINGS

CALGARY

The 3 charts above are EOY 2013. Current Charts are here.

Unemployment Update

01/12/2014

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Average is Officially Over

“If you cannot justify your singular ability to add value every day, you will be in trouble; that’s the big difference between us and our kids. We got to find jobs, they will have to invent them.”
Tom Friedman

"Countries that Enable will Thrive" (3.04min)

Or watch the Keynote by New York Times columnist Thomas Friedman at the 2013 Maryland Competitiveness Coalition’s Economic Summit "How the merger of globalization and the IT revolution is impacting the economy and the future of work." (47.43min) QUOTES:

Think Like an Immigrant: "We are all new immigrants to the hyperconnected world, and new immigrants are paranoid optimists. I better understand what world I’m living in, what the biggest trends are and pursue them with more energy, vigor and persistence than anybody else.”
Think Like an Artisan: "Historically, artisans produced every item individually, and the best artisans provided so much value add, and took so much pride in their work, that they carved their initials into it. Do your job everyday as if at the end of the day you brought so much value add you wanted to carve your initials into it.”
Always be in Beta: "If you ever think you’re finished, you’re finished. Always see yourself as a work in progress, constantly engineering and reengineering yourself.”
PQ + CQ > IQ: "You give me a kid with a high passion quotient, a high persistence quotient and a high curiosity quotient, I’ll take them over the kid with the high intelligence quotient seven days a week.”
Think Entrepreneurially: "Regardless of your spot on the organizational chart, search for a way to provide extra – find your unique value add. “Be relentlessly entrepreneurial in whatever you do.”

Share of Wealth

10/21/2013

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50/10 10/50
"We're in California, isn't there a better way of doing that?" Elon Musk

The bottom 50% of most national populations is participating in less than 10% of its wealth, and the top 10% of populations is wheeling and dealing with over 50% of its national wealth. If you are in the bottom 50%, you are working at the wrong trade if your desire is to enjoy just some of the benefits of those above you; for instance more free time.

It's doubtful that in this period of history there is any point in waiting or voting for your governors to move you up the ladder because the 10% make up the rules of the game. The only remedy I can see is to retrain so that you have a skill that the top 10% needs and that the bottom 50% doesn't have.

Here are some high quality and free educational providers, Khan Academy and EdX to get you started and an interview with Elon Musk "A lot of education is vaudevillian" from April 17, 2013 at the Khan Academy office in Mountain View (48min).

Here is another interview with Elon talking about Tesla and SpaceX at the D11 Conference on May 29th 2013 (69min) "Change the rules of the game."

US 30yrs Later

10/17/2013

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Capital vs Labour

Thanks to Ted Kavadas rounding up these 3 charts (and 7 others shown here). In the past 30+ years since the peak in the cost to borrow, Capital has chased financial asset prices (housing, stocks and bonds etal) in bidding wars to record highs against yields plunging to negative return lows.

During this time frame, Labour has formed longer lineups as more and more jobs become a negative return on work/time. Why invest one's time in working for someone else if "unemployment" and grubbing about for oneself produces a similar quality of existence?

The past class struggles against the owners of the means of production ended either with revolution that restructured society or the common ruin of the contending classes. (paraphrased from the 1847 Communist Manifesto Wikipedia)

Well the North American "Spring" seems nowhere in sight, so forget the revolution. Perhaps the reset will be a "restructuring of the contending classes"; although that idea currently seems remote; a minimum wage increase or an asset mark to market is well lobbied against. Also the U.S. (and Canadian) federal governments are on a declared path of austerity as is Europe and other developed countries. As governments reduce spending the only alternative sources for investment in the economy are the private sector and trade. The trade balance is stubbornly negative.

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Central Canada Labour Outflow

08/12/2013

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Unemployment Ticks Up
Canada's jobless rate now 7.2%

"...it does look like there's been a little bit of deterioration since the start of the year." said Doug Porter, Bank of Montreal chief economist.

"In all, six of 10 Canadian provinces lost workers with Quebec's 30,400 setback the deepest fall-off."

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"The agency (Bank of Canada?) pointed out that for the first half of 2013, job gains have averaged 11,000 a month.

That's far weaker than the 27,000 average gain the economy produced during the second half of 2012."

"It is also not sufficient to fill vacancies created by the natural growth in the labour force, which analysts estimate is between 15,000 and 20,000 a month. Under this scenario, it should be expected that the unemployment rate will rise unless a large number of discouraged Canadians drop out of the workforce altogether."

Quotes above from the Huff Post August 9th and the Montreal Gazette August 10, 2013

NOTE: It's the Canadian Energy sector that is attracting the unemployed migration. See the June 27, 2013 post "Hours vs Earnings"

Employment Update Canada

07/15/2013

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Part Time-Full Time, Male and Female Employment in Canada

STATS CAN Employment Data: In Canada, more women than men work at part time jobs (+/- twice as many) and both older men and women (45 years and older) are more employed part time than younger men and women (age 25-44).

In the category of full time employment, there appears to be a declining number of younger men (since about 1990) employed relative to full time older men who appear to have made and kept the biggest percentage gains in job acquisition.

With full time employed women the story is similar except that BOTH younger and older women have made large percentage gains in getting employment and for 20 years during the period between 1983-2003, younger women were getting more jobs than older men.

If the trend continues of greater productivity through technological advance and the wage disparity between men and women is not erased, we could see more full time jobs auctioned off to women who live longer than men.

The chart above (updated annually) is also located on the Earnings Page.

Hours vs Earnings

06/27/2013

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Canadian Energy Sector Earnings Advantage

Average Canadians Work 30.4 hours per week, but if you work just 2 more hrs/wk in the Canadian Energy Sector Provinces, you can increase your earnings dramatically. Earnings chart here.

History, Charts &
Curated Readings

"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense