High school graduates competing with outsourcing and automation

[SixNein]

While people enjoy their Friday, I'm stuck in a small room staring at set theory, linear algebra, and statistics. On that note, I came across an http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/FullReport.pdf that claimed 60% of jobs over the next decade will require a college education. But I wonder... how will people without a college education survive? Manufacturing isn't dead; however, technology is automating the jobs people with high school degrees use to fill. Where will they go now?

The short answer is that I truly don't know. The longer answer is that I suspect people with a high school education or lower is now in a race to 3rd world living standards. They are, to a degree, in direct competition with 3rd world wages. I say to a degree because sometimes pay isn't as large of a factor as delivery time, etc..

On a side note, I do think its interesting that so many people with a high school education vote republican... don't you? lol

 

[ThomasT]

While people enjoy their Friday, I'm stuck in a small room staring at set theory, linear algebra, and statistics. On that note, I came across an http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/FullReport.pdf that claimed 60% of jobs over the next decade will require a college education. But I wonder... how will people without a college education survive? Manufacturing isn't dead; however, technology is automating the jobs people with high school degrees use to fill. Where will they go now?

The short answer is that I truly don't know. The longer answer is that I suspect people with a high school education or lower is now in a race to 3rd world living standards.

I don't know what will become of them either. But it seems to me that America can look forward to a persistent, and perhaps increasing, unemployment rate greater than today's in future decades. Which would seem to entail either a vast welfare state, or massive abject poverty. I'm not optimistic.

 

[Vanadium 50]

One needs to look carefully at that report. It says by 2018 63% of openings will require some college education. That's a category more inclusive than "associates degree" and technically covers taking only one college class. The 2007 number is only 3 percentage points lower. This also covers job openings, and not just entry-level positions: a factory foreman may well be expected to have more education than someone just starting out - and the aging demographic . So there is no abrupt transition - this is a function of continuing trends and demographics.

That said, recessions and unemployment hit people with less educational attainment harder. http://www.bls.gov/emp/ep_chart_001.htm that the average unemployment rate for 2010 was 8.2% amongst the general population (we can quibble about what this number means, but the trend is inarguable), but only 1.9% among people with doctorates and 14.9% for people without a high school diploma, and a clear trend.

It is difficult to get precise numbers, but there are something like 10 million non-English speakers in the US. Unemployment in this group may be as high as 30%, or even higher.

On a side note, I do think its interesting that so many people with a high school education vote republican... don't you? lol

If someone supporting the Democrats sneered and laughed at me, I would certainly question whether that party best served my interests. This doesn't sound like irrational behavior.

 

[MarcoD]

Bernanke claimed that the US should be able to, or will, sustain a 5.2 unemployment rate for the foreseeable future.

The balance of trade needs to reverse some time, which will bring jobs, so I wouldn't worry about it too much.

 

[Elihu5991]

I don't blame the people with just highs school education. These people aren't supported and shown how to live life. Most of them are from derelict communities; not shown any hope in life. Then again, some on the other hand, waste their life away, yet they are hurt. For some, not everyone is destined for university and all, everyone has their destiny and the hobbies. People who enjoy cleaning should have the right to work as a cleaner and not be condemned and paid little. A doctor is no better than a cleaner ... we can't live without cleaners as much as doctors. This requiring a degree thing is going to cause HUGE problems.

 

[russ_watters]

I don't blame the people with just highs school education. These people aren't supported and shown how to live life.

I definitely agree. I do, however, blame [most of] the people who didn't even finish high school.

 

[SixNein]

I don't blame the people with just highs school education. These people aren't supported and shown how to live life. Most of them are from derelict communities; not shown any hope in life. Then again, some on the other hand, waste their life away, yet they are hurt. For some, not everyone is destined for university and all, everyone has their destiny and the hobbies. People who enjoy cleaning should have the right to work as a cleaner and not be condemned and paid little. A doctor is no better than a cleaner ... we can't live without cleaners as much as doctors. This requiring a degree thing is going to cause HUGE problems.

I disagree. At one time, a person could cut out a decent middle class life if they were willing to work. They could start out on a factory floor doing some assembly, and eventually, they could move up the company ladder. But there has been a change. In my opinion, we have reached some kind of technological equilibrium. And it should make anyone regardless of education feel uncomfortable. Since there are so many different things that can be automated, I don't think that there are many safe jobs. And even the safe jobs are at high risk of being outsourced.

 

[feathermoon]

There is a study or two I'm sure showing a person's contribution to the overall economy, with a correlation between education and value. This supplies a governmental impetus to ensure everyone can go to college. But, I bet 50% or greater of these 60%+ percent of jobs that will require some college education won't really. Its just become a way to cut down on applicants, which doesn't help anything in the overall economy, in my opinion.

 

[ThomasT]

I think that a big part of the problem is that a large portion of America's manufacturing base, that used to employ lots of people with just high school educations (and even a lot of high school dropouts), simply doesn't exist any more. It's been replaced by automation and foreign labor. In the three areas that I've spent most of my life I count about 80 factories, in dozens of industries, employing approximately 120k people that are shut down ... apparently forever.

The US is increasingly becoming a service based, not a manufacturing based, economy. And a significant portion of that is financial services, and technical services, a significant portion of which are outsourced to cheaper foreign labor.

This is very good for the financial sector, and lots of corporations, but bad for America in general, imho. Yet, it's the US government which has promoted and subsidized this trend.

As I said, I'm not optimistic.

I'll repeat what I said in a previous post. America, the US, is facing the prospect of becoming a vast welfare state, or vast abject poverty.

The problem isn't going to just solve itself. Current trends will continue if neither the congress nor the administration is concerned with changing the trends.

 

[Ryan_m_b]

The US is increasingly becoming a service based, not a manufacturing based, economy. And a significant portion of that is financial services, and technical services, a significant portion of which are outsourced to cheaper foreign labor.

The UK has done this as well especially in finance (the square mile amongst other places in London is one of the biggest financial centres of the world) which is great when the financial sector is doing well and a pain in the neck when it isn't.

As for the problem of "unskilled" labour it is a big one. I can't see the UK (or many other developed countries in the same situation) getting out of it without massive investment in manufacturing and training programs. Problem is I wonder if that would make much of a difference because we still probably wouldn't be competitive with industry out-sourced to less developed countries. If you install the same factories, same training programs etc you can still do it for cheaper in a country where rents are cheap, taxes are low and the average person is desperate enough to work for wage that would be illegal in the UK.

 

[Zarqon]

I always find it a bit paradoxical to say that "unemployment" due to factories becoming automated is a bad thing. I mean, no one really wants to stand in a factory all day doing monotonous tasks, so the more these things can be automated the better!

That being said, our current model for how to redistribute the wealth of our society to everyone (also to people who have no more tasks to do) isn't quite there yet, when we can take advantage of it properly. My feeling is that the welfare state concept will (have to) be expanded in the short term future to accommodate for this, until we can find a more positive arrangement of the society.

 

[Ryan_m_b]

I always find it a bit paradoxical to say that "unemployment" due to factories becoming automated is a bad thing. I mean, no one really wants to stand in a factory all day doing monotonous tasks, so the more these things can be automated the better!

That being said, our current model for how to redistribute the wealth of our society to everyone (also to people who have no more tasks to do) isn't quite there yet, when we can take advantage of it properly. My feeling is that the welfare state concept will (have to) be expanded in the short term future to accommodate for this, until we can find a more positive arrangement of the society.

I agree though my point about manufacturing is that we wouldn't have so much unemployment now (and not be in such a bad economic situation).

 

[Tosh5457]

I always find it a bit paradoxical to say that "unemployment" due to factories becoming automated is a bad thing. I mean, no one really wants to stand in a factory all day doing monotonous tasks, so the more these things can be automated the better!

That being said, our current model for how to redistribute the wealth of our society to everyone (also to people who have no more tasks to do) isn't quite there yet, when we can take advantage of it properly. My feeling is that the welfare state concept will (have to) be expanded in the short term future to accommodate for this, until we can find a more positive arrangement of the society.

Yep the problem is the redistribution - if factories become more and more automated, it means the profits will go to fewer people. But giving money to people who don't work for a long time (not arguing against unemployment subsidy) isn't a good idea, so the redistribution couldn't be by subsidies. State-owned factories wouldn't be very good either, because state-run enterprises usually don't go well for a variety of reasons. But meanwhile the capitalist class doesn't care about this, and will fight against anything and anyone who attempts to change this.

 

[Ryan_m_b]

Yep the problem is the redistribution - if factories become more and more automated, it means the profits will go to fewer people. But giving money to people who don't work for a long time (not arguing against unemployment subsidy) isn't a good idea, so the redistribution couldn't be by subsidies. State-owned factories wouldn't be very good either, because state-run enterprises usually don't go well for a variety of reasons. But meanwhile the capitalist class doesn't care about this, and will fight against anything and anyone who attempts to change this.

It's sort of a moot discussion because without having the technology it's hard to see all the ramifications. Having said that I'm not sure if I agree to the statement of giving money people who don't work for a long time because what if the situation is that for years there are not enough jobs to go around? I agree it's not fair if people have no intention of ever working and instead just live off of benefits but in a situation such as the one the UK currently finds it in there are literally not enough jobs to go around.

Also state-owned factories could potentially work; there are many examples of state-owned institutions that work worldwide but that's a bridge we'd have to cross if we get to it. Perhaps some form of co-operative venture e.g. the residents of a town club together and build an lights-out factory/fablab to service some of the town's needs. Of course any action is going to depend on the sophistication of the technology we are talking about.

 

[Tosh5457]

Having said that I'm not sure if I agree to the statement of giving money people who don't work for a long time because what if the situation is that for years there are not enough jobs to go around

Neither do I, like I said it's just a bad idea.

Also state-owned factories could potentially work

They'd have to compete with the private factories, so they'd have to do the same thing: automate the process to get more profitability.

 

[Ryan_m_b]

They'd have to compete with the private factories, so they'd have to do the same thing: automate the process to get more profitability.

Hmm the way I see it the competition would be intellectual; who has the best designed factory and who has the bigger and better library of intellectual property. It may be that a private company could offer an individual a product that the state lacks the IP to make, or perhaps paying fees to a private company ensures products get made and delivered faster (and to a higher quality) than the state-owned that are paid through taxes.

Of course the way to compete would be regulation of IP law and massive funding of public institutions (from individuals to universities) to come up with better automation and product designs.

To avoid going to off-topic the question in this situation becomes how people can pay for goods if the industries they need to buy from are the ones causing the mass unemployment. Somehow a viable post-industrial economy/society would have to be created. Arguably the US is close to that today; looking at this graph it seems that only ~10% of the work force is employed in primary and secondary sectors of industry.

 

[Tosh5457]

Hmm the way I see it the competition would be intellectual; who has the best designed factory and who has the bigger and better library of intellectual property. It may be that a private company could offer an individual a product that the state lacks the IP to make, or perhaps paying fees to a private company ensures products get made and delivered faster (and to a higher quality) than the state-owned that are paid through taxes.

Of course the way to compete would be regulation of IP law and massive funding of public institutions (from individuals to universities) to come up with better automation and product designs.

To avoid going to off-topic the question in this situation becomes how people can pay for goods if the industries they need to buy from are the ones causing the mass unemployment. Somehow a viable post-industrial economy/society would have to be created. Arguably the US is close to that today; looking at this graph it seems that only ~10% of the work force is employed in primary and secondary sectors of industry.

Just a remark, Clark's model is impressively accurate Do you know how does it work? Does it make the prediction based on last year's results, or it made all the predictions at once?

Yes a new economic system is needed. The current trend of capitalism in US and Europe, which has been going since the 80s, is the financialization of the economy and monopolization, and that hasn't been working very well and it won't work in the long term.
A new system will appear, even if it takes an unemployment rate of 30% or 40% for the economic thinking to change direction.

 

[Ryan_m_b]

Just a remark, Clark's model is impressively accurate Do you know how does it work? Does it make the prediction based on last year's results, or it made all the predictions at once?

Nope sorry

 

[feathermoon]

Throughout human history, at a certain point like this a segment of the population would move off to colonize new areas or make war. But wouldn't you know it, we've automated and outsourced that too!

 

[Elihu5991]

I definitely agree. I do, however, blame [most of] the people who didn't even finish high school.

I don't think I would say most. Why would you?

I disagree. At one time, a person could cut out a decent middle class life if they were willing to work. They could start out on a factory floor doing some assembly, and eventually, they could move up the company ladder. But there has been a change. In my opinion, we have reached some kind of technological equilibrium. And it should make anyone regardless of education feel uncomfortable. Since there are so many different things that can be automated, I don't think that there are many safe jobs. And even the safe jobs are at high risk of being outsourced.

Yeah, a person could cut their middle-class life ... but it can be hard fro them because of their mentality. To cut a long psychological answer shot - they're too comfortable, don't see hope, perhaps won't even get promoted, have too many things holding them back, .etc!

Automation and outsourcing is killing the labour industry ... and may even kill the Labour Party of the respective countries :P

There is a study or two I'm sure showing a person's contribution to the overall economy, with a correlation between education and value. This supplies a governmental impetus to ensure everyone can go to college. But, I bet 50% or greater of these 60%+ percent of jobs that will require some college education won't really. Its just become a way to cut down on applicants, which doesn't help anything in the overall economy, in my opinion.

Everyone went to university, who will do the non-university jobs that are VITAL ...and like I said, not everyone wants and can go to university (whether they like it or not). Let's not discriminate jobs shall we.

I wouldn't exactly say it's cutting down applicants as that can be even more easily done but just not accepting and other similar means :P It can be harder to trust people's word and skill these days.

I think that a big part of the problem is that a large portion of America's manufacturing base, that used to employ lots of people with just high school educations (and even a lot of high school dropouts), simply doesn't exist any more. It's been replaced by automation and foreign labor. In the three areas that I've spent most of my life I count about 80 factories, in dozens of industries, employing approximately 120k people that are shut down ... apparently forever.

The US is increasingly becoming a service based, not a manufacturing based, economy. And a significant portion of that is financial services, and technical services, a significant portion of which are outsourced to cheaper foreign labor.

This is very good for the financial sector, and lots of corporations, but bad for America in general, imho. Yet, it's the US government which has promoted and subsidized this trend.

As I said, I'm not optimistic.

I'll repeat what I said in a previous post. America, the US, is facing the prospect of becoming a vast welfare state, or vast abject poverty.

The problem isn't going to just solve itself. Current trends will continue if neither the congress nor the administration is concerned with changing the trends.

What if that's their intention? Politicians are CRAZY people.

You see, people want CHEAPER products and services, fine they will get at but at a cost! Yet people are still complaining. There is a rise in homelessness in not just the US but all over the developed world (or shall I say soon to be reversed for at least the US).

The UK has done this as well especially in finance (the square mile amongst other places in London is one of the biggest financial centres of the world) which is great when the financial sector is doing well and a pain in the neck when it isn't.

As for the problem of "unskilled" labour it is a big one. I can't see the UK (or many other developed countries in the same situation) getting out of it without massive investment in manufacturing and training programs. Problem is I wonder if that would make much of a difference because we still probably wouldn't be competitive with industry out-sourced to less developed countries. If you install the same factories, same training programs etc you can still do it for cheaper in a country where rents are cheap, taxes are low and the average person is desperate enough to work for wage that would be illegal in the UK.

Not everyone wishes to work in an office crunching numbers all day, amongst other tasks.

These developing nations are becoming MIGHTY powers and soon will not be developing. I'm most certainly not surprised! :D

I always find it a bit paradoxical to say that "unemployment" due to factories becoming automated is a bad thing. I mean, no one really wants to stand in a factory all day doing monotonous tasks, so the more these things can be automated the better!

That being said, our current model for how to redistribute the wealth of our society to everyone (also to people who have no more tasks to do) isn't quite there yet, when we can take advantage of it properly. My feeling is that the welfare state concept will (have to) be expanded in the short term future to accommodate for this, until we can find a more positive arrangement of the society.

I do get what you mean, but can you elaborate on what you've said, especially on the second paragraph?

Throughout human history, at a certain point like this a segment of the population would move off to colonize new areas or make war. But wouldn't you know it, we've automated and outsourced that too!

Absolutely.

 

[Ryan_m_b]

Not everyone wishes to work in an office crunching numbers all day, amongst other tasks.

I class myself as one of those people. However service jobs are not just office jobs; even if we supposed that the primary and secondary sectors were automated we would still need to stock the tertiary (service) and quaternary (high-tech) sectors with people. Indeed a percentage of the jobs lost from hypothetical automation of the primary and secondary sectors would transfer to the tertiary and quaternary because the automation is likely going to need service and oversight (this is of course only operating on the assumption that the automation that works in the primary and secondary doesn't make headways into the tertiary and quaternary which I doubt).

These developing nations are becoming MIGHTY powers and soon will not be developing. I'm most certainly not surprised! :D

True but not all nations are developing equally and today's emerging market is tomorrow's Eurozone crisis. Even if we did suppose that the BRICS all developed to the stage of not being cheaper to employ in than the US or Europe there are plenty of other countries in the world you could outsource to. I'm hopeful that one day this won't apply and that wealth and development will be more or less homogeneously spread around the world but I'm not holding out hope of seeing that in my lifetime.

 

[russ_watters]

I don't think I would say most. Why would you?

I think most people who don't graduate from high school do so by choice.

 

[SHISHKABOB]

I think most people who don't graduate from high school do so by choice.

these guys http://www.cec.sped.org/AM/Template.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=9279

appear to agree with you. According to them, 70% of drop-outs were confident they could have graduated and 81% recognized that completing high school was essential to their success. It would seem to me that, if they felt this way, that means they chose to drop out. Though some of them also said "they had to get a job, became a parent, or had to care for a family member."

 

[SixNein]

these guys http://www.cec.sped.org/AM/Template.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=9279

appear to agree with you. According to them, 70% of drop-outs were confident they could have graduated and 81% recognized that completing high school was essential to their success. It would seem to me that, if they felt this way, that means they chose to drop out. Though some of them also said "they had to get a job, became a parent, or had to care for a family member."

I think it depends upon the generation.

 

[SixNein]

I class myself as one of those people. However service jobs are not just office jobs; even if we supposed that the primary and secondary sectors were automated we would still need to stock the tertiary (service) and quaternary (high-tech) sectors with people. Indeed a percentage of the jobs lost from hypothetical automation of the primary and secondary sectors would transfer to the tertiary and quaternary because the automation is likely going to need service and oversight (this is of course only operating on the assumption that the automation that works in the primary and secondary doesn't make headways into the tertiary and quaternary which I doubt).

True but not all nations are developing equally and today's emerging market is tomorrow's Eurozone crisis. Even if we did suppose that the BRICS all developed to the stage of not being cheaper to employ in than the US or Europe there are plenty of other countries in the world you could outsource to. I'm hopeful that one day this won't apply and that wealth and development will be more or less homogeneously spread around the world but I'm not holding out hope of seeing that in my lifetime.

I think the service sector is already beginning to be automated:
http://techland.time.com/2011/05/18/mcdonalds-installing-self-serve-touchscreen-kiosks/

 

[ThomasT]

I always find it a bit paradoxical to say that "unemployment" due to factories becoming automated is a bad thing. I mean, no one really wants to stand in a factory all day doing monotonous tasks, so the more these things can be automated the better!

I don't know that anyone is saying it's a bad thing. It's just a fact that renders the people who used to be necessary to do certain tasks unnecessary to do those tasks.

Innovations in automation will, I would guess, continue, and the OP's question about what will happen to the people replaced by automation remains unanswered.

Imo, either the government will support them, or it won't. As the population, and automation, and outsourcing continues, then it seems reasonable to suppose that the number of people in the society who simply aren't needed to do much of anything will also increase.

That being said, our current model for how to redistribute the wealth of our society to everyone (also to people who have no more tasks to do) isn't quite there yet, when we can take advantage of it properly. My feeling is that the welfare state concept will (have to) be expanded in the short term future to accommodate for this, until we can find a more positive arrangement of the society.

My feeling is that, in the short term, there's no pressing problem. It's the long term prospects, wrt projections from current trends, that looks a bit dire.

Again, assuming that the US population increases to, say, between 400M-450M by around 2060, projections suggest that an increasing proportion of that population will simply not be needed in the workforce.

It will, I think, even become increasingly less important whether one has a college degree or not (much less a high school degree), wrt prospects for gainful employment. The fraction representing jobs/people seems to me to be likely to decrease.

So, how will the people that the labor market just doesn't need ... live?

 

[Ryan_m_b]

It will, I think, even become increasingly less important whether one has a college degree or not (much less a high school degree), wrt prospects for gainful employment. The fraction representing jobs/people seems to me to be likely to decrease.

I agree and disagree depending on how the higher education industry proceeds in the future. In the UK there are nearly 3 million people unemployed, over 1 million of them are between 18 and 25 years old and a good portion are university graduates. For many jobs this means that the rest of those million are at a disadvantage competitively so we could say that having a degree will be very important in the future just as default.

However more likely I think is that things like this will bankrupt the higher education industry reputation wise as more and more people realize that all they are getting after going to university is a piece of paper, a huge debt and unemployment.

 

[ThomasT]

I agree and disagree depending on how the higher education industry proceeds in the future. In the UK there are nearly 3 million people unemployed, over 1 million of them are between 18 and 25 years old and a good portion are university graduates which for many jobs means that the rest of those million are at a disadvantage competitively so we could say that having a degree will be very important in the future just as default.

However more likely I think things like this will bankrupt the higher education industry reputation wise as more and more people realize that all they are getting after going to university is a piece of paper, a huge debt and unemployment.

Yeah. Right now it makes a significant difference (having a college degree). 30 to 50 years from now, I think that that difference will decrease. That is, I envision a future world in which hundreds of millions, billions worldwide, are simply not needed in the workforce. And if those unnecessary people aren't supported by government subsidies, then the world will have two diametrically opposed societies. One, orderly and more or less comfortable. And the other a dog eat dog world of everyday life and death trials and animal aggression. And those two societies will, I think, have to pretty much continually violently clash. Especially since the less fortunate society will represent the bulk of humanity.

 

[Zarqon]

I don't know that anyone is saying it's a bad thing. It's just a fact that renders the people who used to be necessary to do certain tasks unnecessary to do those tasks.

Consider how many people that complain about automated procedures "stealing" their jobs, I think it can be claimed that many people simply do not see the connection of "unemployment" and free time as the positive thing it should be.

So, how will the people that the labor market just doesn't need ... live?

This is a part of my bafflement with this whole thing.

With increasing automation, everything that we need to live (food/homes/luxury items etc) is becoming EASIER to produce, not harder. It should thus be EASIER to distribute the necessary wealth for living a good life to everyone, not harder. The fact that it currently is harder, despite our enormous increase in production efficiency over the past decades, means that our redistribution model just isn't quite right. Yes, we also have higher standards today, which of course offsets the efficiency increase somewhat, but overall I'm quite convinced that it must be possible to distribute all things produced today in such a way that no one has to worry about not getting their needs fulfilled. It's simply a matter of re-distributing the wealth that is already there (*cough* from the 1% *cough*).

 

[ThomasT]

Consider how many people that complain about automated procedures "stealing" their jobs, I think it can be claimed that many people simply do not see the connection of "unemployment" and free time as the positive thing it should be.

Free time isn't a positive thing if you have no place to live and no food to eat.

This is a part of my bafflement with this whole thing.

With increasing automation, everything that we need to live (food/homes/luxury items etc) is becoming EASIER to produce, not harder. It should thus be EASIER to distribute the necessary wealth for living a good life to everyone, not harder.

It is easier. Everyone in the world could have enough to eat, sufficient shelter, and the wherewithall to pursue some sort of personal goal. But the political will necessary to make that happen doesn't exist. That is, the governments of the countries of the world which could make that happen simply aren't interested in making that happen.

As you note, it's quite possible for the world to make a good standard of living for everybody in it. But, unfortunately, the world isn't interested in doing that. That, in a nutshell, is the problem for the people who aren't and won't be needed in the workforce -- and there's no plan or provision for them. As far as I can tell, in the US of 2060 there will be at least 100M people left to their own devices, with no visible means of monetary support, no permanent shelter, and, essentially, no hope for a better life.

I think you're right in that that doesn't have to be the case. But I think it will be.