Jobs of the Future: The Answer

What are the jobs of the future? Repeat that every night as you drift to sleep.

During the 2001 recession, the U.S. economy lost 3 million manufacturing jobs. Most economists think those job will never come back. It’s not because they were shipped overseas (one of the stupidest mental images ever … you can’t put a job in a box and transport it). The real reason is that manufacturing output is higher than ever. Our factories simply produce more product using less labor. The entrepreneurial / technological spirit has squeezed efficiencies onto the factory floor while squeezing people off it.

There were 17 million payroll employees in manufacturing before the recession, and now there are only about 14 million. That’s a 20 percent decline in less than ten years. Do the math and tell me how many manufacturing jobs will still be around for the next generation …

Clearly, the time is now to figure out what occupations and sectors will replace the physical production of goods. While we all know the answer in the abstract is “service jobs,” in fact that answer is useless in its breadth. Too many people fear that service jobs is shorthand for menial, dead-end jobs. Fight that notion with this test: run through ten people you know best, and figure out which of them is NOT in the service sector? Pilot, soldier, radio show host, writer, fire fighter, professor, secretary, architect … keep going.

In my years of research on this topic, a one must-read piece stands out: the 2003 annual report of the Dallas Fed. This 1800-2000 time series chart of the percentage of the American workforce in 3 sectors is worth at least two thousand words:

Material production is becoming so automated that service consumption is the key to understanding future employment in terms of service production. So if you really think that everyone in the future will be flipping burgers, then you also have to believe that everyone will be consuming nothing other than burgers.

The trends show that major increases in consumption will be in health care, education, entertainment, art, and even the movies. (That was a joke, Troy, I honestly do think your movies are art …).  And that's where the jobs of the future will be: health care, education, entertainment.  More pro sports, more physical therapy, more nurturing of younger and younger children, more training, more video games.

What do you think?

Comments

[jennifer Loengart]

You try using one of the job matching sites that takes your skills and shows you what job you fit with -

http://www.realmatch.com
http://www.simplyhired.com
http://www.indeed.com

There are others too.

[Dan Weber]

Not to pick nits, but a drop from 17 million to 14 million is a change of less than 20%, not 30%.

[Michael F. Martin]

Why do you assume that we can't go back to manufacturing? We have lots of natural resources. Our currency is now devalued against practically every other, and will continue that way for the foreseeable future.

We're going to go back to a manufacturing economy.

By the way, that's not a bad thing. There are cultural benefits to a more manufacturing-oriented economy.

[Team John L]

Unfortunately, I think it's quite safe to say that manufacturing jobs will dwindle. That is not to say that America can't manufacture goods, or that manufacturing will permanently be the in the stewardship of Asia, but that manufacturing jobs will continually cease to be. Specifically, technological advance will almost certainly continue to eat away at the ability of human hands to assemble, package and deliver physical goods. So while we may manufacture more, or less, goods in America, the jobs in charge of making these products a reality will be service in nature. Programmers, engineers and designers will have increasingly more to do with future manufacturing than the purveyors of physical dexterity and I think the writing for that prediction is pretty clearly written on the wall.

However, I think most of us overestimate the likelihood of very bad scenarios. Those who were once assemblers have since become machine operators. And in the same way, those machine operators will begin to start work in, say, operations maintenance. Don't underestimate the profit motive for people to create and design jobs for their peers.

[Tim Kane]

Dan - Thanks. Fixed now.

Michael - We can't go back to manufacturing because we never left it -- same as agriculture. America will continue to grow tremendous amounts of food, while also producing record amounts of material goods, but those industries will simply operate with fewer workers. The cultural choice is whether to create a nation of make-work or to allow unfettered automation and the liberation of labor.

[Michael F. Martin]

Tim,

Based on my understanding of how automated manufacturing is done in the most advanced factories, human operators are still a very important part of the process. In fact, as evidenced by the prominence of Japan and Germany in manufacturing, unfettered automation seems to require more skill, not less. I will be the first to admit, however, that most of my knowledge is coming second or third-hand through books I've been reading about the Toyota Production System and lean manufacturing.

The "make-work" vs. automation dichotomy implicit in the cultural choice you present is a wooden nickel, which I believe was sold to us by F.W. Taylor and the Sloan method of cost accounting.

For my money, I'm forecasting that instead of a more services oriented economy in the United States, we're headed back to doing more agriculture, mining, and manufacturing for the rest of the world. I'm not worried and I don't mean this to sound like a doomsday scenario. I just think we're going to have to relearn the lessons of lean manufacturing that were practiced at the Highland Park Model-T plant and taught by people like Frank Gilbreth.

But perhaps the most important change would be a switch to a hybrid of cost and lean accounting. Balance sheets were designed to present a picture of what a firm would be firm in liquidation. Reporting things that way never made much sense for anybody but Wall Street-types and bankruptcy lawyers. It's time to adopt modify the accounting rules to reflect how growth actually occurs within a firm. Firms are engines that take cash in and spit cash out. Why can't we design our financial statements to better reflect the cyclical nature of supply and demand?

:-)

[Michael F. Martin]

Here's a simpler way to say the same thing:

If you look at that "America Works" graph, you see that we are at an all time high percentage for the services sector. Some of the increase in services vs. manufacturing and agriculture are due to increased efficiencies in manufacturing and agriculture. But just as much or more has been due to the fact that a lot of manufacturing and agriculture was cheaper to import when the dollar was strong compared to other currencies.

Now that the dollar is on par or weaker than other major currencies, we're either going to have to make do with less agriculture and manufactured goods or we're going to have start growing and making more of them ourselves. I know which outcome I think is more likely.

[Charles Johnson]

I always find it humorous that some people decry the loss of manufacturing jobs in the States seem so oblivious to the relationship between capital and labor of always seeking the highest bang for its buck. Often you ask these people what jobs they want for their children -- and they are all in the service sector!

[Lucas]

You know, I've known people who worked manufacturing jobs and they sound horrible. Terrible, dangerous, boring jobs. I have no interest in ever having one, and all of my friends seem to agree. Yet somehow the movement of manufacturing jobs to other countries (and machines) seems to distress a lot of people. I don't understand it.