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Generation Lost: The Unemployment Crisis Among Young People

May 17, 2011 / Klint Finley

Meghan O’Halloran was one of those who had her career derailed by the timing of her graduation.
She left Cornell University with a degree in architecture and six summers of internships at top firms in New York, Milan and London.

“I thought getting a job would be a snap,” she said.

But after graduating in December 2008, just as job losses in the economy were reaching a high point, she was confronted with a very cold reception into the labor force.

She followed her boyfriend to China for a year, and found architecture work plentiful in the building boom there. But when she returned home at the end of 2009, not much had improved, and no one was hiring.

“I’ve applied for temporary work,” she said. “The answer is always the same, ‘We wish we could hire you.'”
She’s decided to leave behind her hopes for a career as an architect and has started her own business making custom fabric, carpets and furniture.

Money: The Great Recession’s lost generation

The kids mentioned in this article seem relatively lucky. They have jobs, or businesses. What’s only hinted at in the article is trickle down unemployment – as college graduates settle for jobs for which no college degree is required, it makes life more difficult for those without degrees.

Evidence of a Higher Education Bubble

April 26, 2011 / Klint Finley

Education bubble - graph

The Louisiana libertarian think-tank The Pelican Institute rounds-up the evidence that we’re experiencing a higher education bubble:

Concurrently, students are defaulting at an alarming rate: 25 percent of all government loans default, 30 percent of community college loans default, 40 percent of two-year college loans default, and for-profit schools have a 43 percent default rate.
Although student loans are defaulting faster than home loans at the height of the housing crisis, a 2005 decree from the Bush Administration stated that student loan debt could not be dissolved through bankruptcy proceedings. The only other scenario where this “no-escape” clause exists is debt from criminal acts and debt from fraud.

The Pelican Post: Higher Education: The Next Asset Bubble?

Via Andrew McAfee, who also points out an important question: what would a higher education bubble bust actually look like?

A bit more on the decline of value of a university degree here and Pete Thiel’s case is here.

SETI Temporarily Shuts Down One of Its Telescope Arrays

April 26, 2011 / Klint Finley

Allen Telescope Array

Due to a loss of both state and federal budget cuts at the University of California Berkley, the university had to withdraw some of its support of the The Allen Telescope Array used by SETI scientists to monitor signals from outer space SETI principal investigator Franck Marchis revealed on his blog. According to CNN, the array will go back up in 2013, and it’s not the only array that SETI uses to collect transmissions.

(via Anthropunk)

Economists Debate: Are Conflicts of Interest, You Know, Bad?

April 20, 2011 / Klint Finley

One portion of the devastating documentary about the global financial collapse, Inside Job (which won an Oscar, so you have to see it), dealt with academic economists—specifically, the ways that they became financially tied to banks and other players in finance, and how that may have compromised the entire practice of economics. It even showed the heads of the economic departments at Harvard (pictured) and Columbia blithely asserting that there was no need to disclose their financial conflicts of interest in academic papers. It was sickening.

We’re pleased to announce that a documentary has actually affected something in the real world! Well, kind of. The economics profession has formed a committee! A prestigious committee. A committee that will talk about whether there needs to be, get this, ethical standards, in economics. Can you imagine?

But here’s the thing: the committee isn’t even proposing an end to conflicts of interest. It’s only pushing for disclosure.

Gawker: Economists Debate: Are Conflicts of Interest, You Know, Bad?

(via Alex Pang, who was earlier asking for different reasons whether it was time to emigrate to Singapore)

The Future of Manufacturing is Local

April 1, 2011 / Klint Finley

iPad covers manufacture

Good stuff, but I couldn’t help getting this icky “all those people who have been downsized and laid-off and otherwise had their lives destroyed by the hollowing out of the U.S. economy just just need to shut-up, stop complaining and pull themselves up by their bootstraps” vibe from the article.

“Manufacturing isn’t dead and doesn’t need to be preserved,” she says. “Let’s stop fixating on what’s lost. Let’s see what we have here, what’s doing well, and let’s help those folks do better.” […]

SFMade helps companies assess a product’s “manufacturability,” which sometimes results in an adjustment of (for instance) the design, to make it easier and less costly to manufacture. SFMade will then help companies either connect to existing contract manufacturing resources in the city or establish their own production capacity. Instead of assuming that things like sewing, printing and assembly need to happen overseas, SFMade is working to reconnect local production capacity to big companies (i.e., San Francisco-based Levi’s, exploring the possibility of local sample production). Other large San Francisco-based corporations have initiated relationships with SFMade, like Bank of America (which felt it had lost its footing as a “local” business) and Virgin America (which features local products for sale onboard its aircraft and in their San Francisco terminal). […]

Similar efforts are happening in New York (and indeed, The Times’ City Blog spotlighted the things still made in the city, from lightbulbs to envelopes, in the Made in N.Y.C. series two years ago). Though it launched post-9/11 as a strategy to lift the city back up, Made in N.Y.C. has evolved over time. Sustainability has become a large part of its mission: member companies can post the environmental impacts of their manufacturing processes on the Made in N.Y.C. Web site, with those excelling in greener process and product able to earn a “green apple.” Tying economic growth inextricably to environmental stewardship has so far been a strong strategy.

New York Times: The Future of Manufacturing Is Local

(via Chris)

Robots, Automation and the Future of Work

March 30, 2011 / Klint Finley

This is a presentation by Marshall Brain, founder of How Stuff Works. He’s written more extensively on the subject in an essay called Robotic Nation, which I haven’t read yet.

I think Brain might be overestimating the ability of machine-vision and natural language processing to supplant human intelligence, but the general trend towards fewer and fewer jobs is real one that I’ve written about a lot lately.

(via Justin Pickard)

Good News for Data Geeks, Bad News for Everyone Else

March 11, 2011 / Klint Finley

not hiring

I have a new piece on the dismal impact of information technology on the workforce at ReadWriteWeb:

Last week we told you that enterprises are investing more into business intelligence and analytics initiatives. This week there’s more good news for professionals in this area: according to KDNuggets, salaries are rising for analytics and data mining professionals.

Based on a poll with approximately 250 respondents, KDNuggets found that salaries are up from its 2010 poll in North America, Western Europe, Asia and Latin America. (There is no mention of Eastern Europe, Africa or Antarctica.)

It’s a good time to be a geek, particularly one with a background in statistics, analytics and data mining. But a bad time to be almost any other type of worker.

For example, The New York Times reported on software that can process legal documents at a fraction of the cost of hiring lawyers and paralegals:

“Some programs go beyond just finding documents with relevant terms at computer speeds. They can extract relevant concepts — like documents relevant to social protest in the Middle East — even in the absence of specific terms, and deduce patterns of behavior that would have eluded lawyers examining millions of documents.”

That’s good news for the people who develop that software. But for people in the legal profession? Not so much.

ReadWriteWeb: Good News for Data Geeks, Bad News for Everyone Else

Supplemental reading:

Paul Krugman: Degrees and Dollars

Paul Krugman: Autor! Autor!

Krugman, again, on the same issue back in 1996

And, less dreary but probably less realistic:

Jobs 2.0: Data-centric Jobs for Generation Y

Photo by Daniel Lobo

Alternatives to Austerity, and a Left/Libertarian Alliance Revisited

February 22, 2011 / Klint Finley

When Thomas Friedman proposed that Americans needed to get used to making some sacrifices if we want to get the deficit under control, I wrote:

What’s the underlying cause of the debt crisis? Certainly Americans buy a lot of crap we don’t need, and on credit too. But consider:

–The decline in real wages in the US
-Obama only proposes to raise taxes on those making over $250,000 a year
-The bailout, at tax payer expense, bailed out the wealthy
–The wealthy routinely avoid paying taxes
-That 23% of the federal budget goes to defense spending (much of which goes to unaccountable private firms)

Who should we be asking to make some sacrifices?

Joseph Stiglitz offers a plan to reduce the U.S deficit he calls an alternative to austerity. Summarized:

Increase “high-return” public investments, even if it increases the deficit in the short term. I assume he means infrastructure.
Cut military expenditures. He doesn’t say how much.
Eliminate corporate welfare.
Slightly increase taxes for the top 1% of earners – by about 5%.

Stiglitz concludes with a dismal note:

There’s only one problem: it wouldn’t benefit those at the top, or the corporate and other special interests that have come to dominate America’s policymaking. Its compelling logic is precisely why there is little chance that such a reasonable proposal would ever be adopted.

This sounds about right to me, apart from the lack of specifics in some areas. It’s got me thinking, though – what essentials can the leftists and libertarians agree to? Could something like this be agreed upon:

Fix public infrastructure, even if it increases the deficit
Cut corporate welfare
End tax loop-holes for the rich
Reduce defense spending by at least 50%

Could we then agree to disagree about social welfare, tax cuts for everyone except the rich and tax increases for the rich? Would libertarians agree to increase public spending on infrastructure? Would the left be willing to put aside tax increases for the rich, or environmental regulations for the time being?

I’ve been cynical about the potential for a left/libertarian alliance since libertarians nearly universally supported Ron Paul in 2007. But now that Paul is trying to form a left/right alliance himself, perhaps it’s an idea whose time has come.

Is IT Investment Hurting US Job Growth?

February 21, 2011 / Klint Finley

not hiring

Here’s my coverage of how information technology may be hurting the economy:

Forrester released today a report called Caution: IT Investment May Be Hurting US Job Growth. The report’s authors – Andrew Bartels, Christopher Mines and Sarah Musto – note that despite record corporate profits, unemployment remains unchanged. Forrester notes that poor job growth both causes and is caused by poor economic growth. It’s a vicious cycle.

The report suggests that corporations are investing in IT instead of hiring workers. The analysts looked at research from 62 industries to find out what’s going on. The report says that the industries with the highest IT investment are also the ones with the biggest decline in jobs. The analysts conclude that there is a causal connection between IT investment growth and the lack of employment growth.

Forrester is not the first to suggest this. Gartner VP and fellow Tom Austin’s blog post on the same subject lead us to ask last year “What Can IT Do To Stimulate the Job Market?” And AMI Partners claimed last year that cloud computing would result in 200,000 – 250,000 job losses over the next decade. […]

“Looking across these 62 private sector industries, we found a modest but statistically significant inverse or negative correlation between IT investment and employment,” the report says. The effect was most pronounced in manufacturing.

ReadWriteWeb: Forrester: Is IT Investment Hurting US Job Growth?

Is the Green-Collar Dream Dead?

January 18, 2011 / Klint Finley

Green collar jobs

Evergreen Solar announced last week that it was closing its plant in Devens, Mass., laying off 800 workers, and moving production to China.

Evergreen’s factory had received more than $40 million in subsidies, which led many to see the plant closing as lesson in the futility of green energy and industrial policy. But what does Evergreen’s story really teach us about solar energy, public subsidies and the future of American manufacturing? […]

America has had many high-tech breakthroughs over the last half-century, but those innovations rarely provided abundant employment for the less educated workers who need jobs most. The Devens closing reminds us that even when ideas are “made in America,” production is almost always cheaper in China.

Failed public investments, like the money spent in Devens, reflect the fact that public officials are rarely skilled venture capitalists and that governments pursue many objectives that lead them away from solid investments. It’s easy to see why any governor would be excited about a green-energy manufacturing plant in a less prosperous area of his or her state. But the same forces that made Devens political catnip meant that it was unlikely to be a long-term success.

Economix: Why Green Energy Can’t Power a Job Engine

My quick take: Governments should invest in infrastructure and people (education, health care, etc.), not in companies.

Also, green collar jobs, if they are to come from anywhere, will largely come from infrastructural investment: installing solar panels, renovating buildings, etc. Not from subsidizing corporations.

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