A tsunami of change is coming

Plan to follow or follow a plan
Plan to follow or follow a plan

 

Changes: Turn and Face the Strange

The world is hurtling into uncharted territory.  Technology is advancing too quickly to track, and the impact on our lives and careers is going to be incalculable but enormous.

Economists and trends analysts are projecting that over 5 million jobs in the US will be taken over by robots or other automation in just 4 years. And that’s only the beginning.   According to one study, up to 47 percent of the existing 138 million jobs in America will be lost due to technological advances in the years beyond 2020.

Hopefully, you find this news as exciting as I do.   You SHOULD find it exciting, even if, or maybe ESPECIALLY if,  your current job is included in the 47 percent.   The excitement lies not in the fact that you may be losing your job, although that could be part of it.  What is truly thrilling is that we are on the cusp of a seismic technological and economic shift that will bring with it a new world of opportunities that would have been unthinkable even ten years ago.  Be patient, because I’m going to get back to this in a few paragraphs.

Meanwhile, there will be few industries and economic sectors that won’t affected.  The pace of change is already overwhelming the abilities of government, industry, and education to adjust.  That means it’s up to us to decide how these changes are going to impact us, and whether we’re going to let this wave roll over us, or we’re going to wax up our boards and ride it to the beach.

Shrinking Wages

Before we get back to the looming wave of opportunities, here’s some historical perspective.  The average minimum wage in the US reached its highest level in history in 1968 at $1.60 per hour.  This would be the equivalent of $10.86 per hour in 2015.  In 2016, the average minimum wage is $7.25, or around $1.00 per hour in 1968 dollars.  So real wages and buying power have declined significantly in the last 35 years.

In the early 1980s, when I entered the job market, manufacturing jobs were plentiful.  I didn’t know anyone who worked for minimum wage.  I earned nearly $18 per hour working a night  shift at a plywood mill.  Gasoline cost around $1 per gallon, and my nearly new Toyota pickup cost less than $5000.

As a single wage earner, I had an enormous amount of disposable income.   In fact, using an inflation calculator, I would need to make over $50 per hour in 2015 dollars to match the buying power that I had in the 1980s.  According to government figures, only about 20 percent of Americans are making an equivalent income today, including well educated professionals.

I’ll discuss the reasons for this decline in real wages, and the impacts it’s had on America’s middle class.   For now, what you should probably take away from all of this is that our political leadership has shifted relatively evenly between both political parties while our real incomes were plummeting.  And while we may not be able to say that one party or the other made it particularly worse, we can say that neither party has made it better.  In other words, don’t expect government to make your life better.

Is College the Answer?

There is no question that the formulas that once created middle class lifestyles won’t work today.  If you have a college degree, you may have noticed that it was remarkably expensive, and that you’ll be paying for it for several years.  If you don’t have a college degree, you need to be cautious before you consider getting one.

I finished my B.S. degree in geology in the mid-1980s.  I chose the field of geology for several reasons.  First, my father and grandfather had both worked in the oil field.  My dad was a driller, and eventually left the oil field to become a water well driller.  He had no formal education, but was a very curious man.  He was always bringing home rocks and fossils that he’d found in his drill cuttings, and would study them endlessly.  Also, Mount St. Helens in Washington erupted in 1981, at a time when I’d all but given up on finding a suitable college major.  That eruption was a seminal event in many respects, but for me it ignited a deep curiosity about the secrets of the earth’s interior.  In the end, though, I couldn’t imagine a professional career that kept me chained to a desk.  Geologists did field work, and that appealed to me immensely.

These were probably not the best criteria for choosing a college major, but it was the basis for a career that I loved.  I did spend time in the field, and I spent time chained to various desks.  It was a good balance, in the end.  And it eventually paid pretty well.

I know that many of my class mates that graduated with degrees in geology never used their degrees, at least not in careers in the earth sciences.  Five years or so after I graduated, I ran into one of them that was working in a shoe store.  He told me he really had no interest in pursuing a geology career.  I was stunned to think that someone would invest the time and money to get a degree in a particular science and not use it.  Such is life.

The point is that a college degree that you can afford and that forms the basis for a career path that you’re pretty certain you want to pursue is a very good answer.  But in choosing the career and the degree, you’ve got to first know whether the jobs in your chosen career are among the 47 percent of jobs that are slated for deptruciont by the building tsunami of automation and artificial intelligence that is building just below the horizon.  This will take some research, and not just Google research .  You will actually need to talk at length to people that are currently working in your chosen field, and more than just one.

If you don’t have a very specific career in mind, but want to go to college for the experience or just to get a liberal arts degree that you don’t plan to use, I don’t recommend it unless you have a lot of extra money lying around.  And even then, I’d strongly caution you against it.

There are at least 3 very good reasons to be very cautious about attending a college or university.  The first is the obvious one that we’ve already covered – unless you know with a high level of certainty that the career path you’re pursuing through your planned studies will not be among the 47% of jobs that are likely to be eliminated in the coming years, going into student loan debt to get a degree will leave you with the debt and little else.

The second reason to be skeptical about getting a degree, even in a technical field that has good long term prospects is that many colleges and universities are not keeping up with changes that are taking place within many industries at light speed.  A friend that works as a graphic designer in a multinational firm was hired by the firm after he’d taken only a few classes at a technical school.  His facility with graphic design came from a combination of independent learning and native ability.  His success in landing his job was purely the result of his portfolio and his persistence with the head of the department that employed him.  He’s thrived in his position because of his passion for his art, and his ability to consistently exceed his employers expectations.  His firm provides financial support to a local university, and while they participate in their career planning, his employer has told him in confidence that they won’t consider hiring graduates from the university’s graphics programs because the university’s teaching methods and the technologies their students are mastering at 5 to 10 years behind what is now standard in the industry.  The university is producing graduates with outdated skillets, and they don’t even know it.

The third reason is that even in STEM degree programs (science, technology, engineering, and math) where graduates are earning the highest salaries in entry-level positions in their fields, the pay scales are still below the actual buying power that I was earning as an unskilled laborer 35 years ago.  There is also no question that the development of artificial intelligence will reduce the numbers of these positions.   My nephew got a degree in information technology.  He graduated in the early ’90s when IT was a red-hot field.  He immediately got a great job with a tech giant in silicon valley, had great pay, awesome working conditions, great benefits, and he loved the work.  Within five years, his position was eliminated because all the work in his division had been outsourced to India, a move that saved the company tens of millions of dollars, but dramatically reduced their domestic work force.  When he searched for a similar position, he learned that the move to outsource positions like his was more or less industry wide.  He had to completely change career paths, which entailed getting a second degree in an unrelated field.   This was not an outcome that he could have predicted, but it is a cautionary tale.  The BRICS are producing very well educated, competent, enthusiastic STEM degree holders that will work for a fraction of what an American can.   The trend to replace Americans with both skilled and unskilled BRIC and other workers with much lower salary requirements is still trending.  Meanwhile, BRICs are producing far more graduates with both graduate and undergraduate STEM degrees, so these are going to be very competitive fields.  I

I’ll delve more deeply into how we can make the best choices to integrate education and career without risking years of wasted time, and an enormous debt load.  You won’t want to miss it.  For now, I mentioned at the beginning of this article that this is an exciting time.  I’ve written far more about why it’s challenging then why it’s exciting.   Opportunities worth seizing are rarely handed out for free, and the opportunities that the rapidly changing technical and economic landscape is presenting are no exception.

But compared to the last huge shifts in economic and social paradigms, like perhaps the Renaissance and the Industrial Revolution, the huge opportunities today are more widely available, even to the least prosperous among us, than any historic parallels.  The fact that there are countless millions of people using the internet to facilitate their incomes, either through telecommuting or e-commerce of one sort or another is a wholly unprecedented development since it provides a source of income that does not depend on your geography, and significantly reduces the advantages that wealthy corporations have always enjoyed over smaller competitors.

There are plenty more reasons to be thrilled with the brave new world we’re entering, and we’re going to thoroughly explore them.  Stay tuned.