What no-one tells us about the jobs crisis

By Neil Patrick

Your vote won't help solve the jobs crisis - as long as politicians pull on the wrong levers.

Three big things have happened in my life in the last few months.

First, I finished writing my book, Careermageddon with Dr. Marcia LaReau of Forward Motion Careers. What started as a small project to try and create a helpful guidebook for people frustrated about their work opportunities, grew and grew as we uncovered layer upon layer of complexity as we sought to understand the real mechanics of the jobs crisis.

Then political events took over.

On Thursday 23 June last year, the EU referendum in the UK returned a result that almost no-one expected. Over 65% of registered voters voted, and the die was cast. Despite 'experts' warning that such a decision would be economic suicide for the UK, large swathes of the UK especially those who felt let down by their political leaders, voted to leave the EU.

The outcome of the US election was no less of a shock to most expert observers. Donald Trump campaigned largely on an anti-globalization platform. Jobs for US citizens and stricter border security were to be high priorities. These policy promises resonated with large numbers of non-metropolitan people in the US, left behind in a globalized economy which delivers immense wealth for a few, and less and less for most who either have a job or those who cannot get one.

The shocks of these two outcomes are still reverberating. I am not going to argue for or against Donald Trump or Brexit. Yes I have my opinions, but the point is they really do not matter.

I’ll say it again. My personal opinions and political beliefs do not matter.

Yet I’m very much in a minority. People on both sides of these arguments are endlessly busy championing their support for their choice, and denigrating those who have the opposite view. Meanwhile, the mainstream media under assault from Mr Trump is railing against fake news, quite oblivious to the fact that they are doing nothing at all to help provide greater understanding of the realities of the jobs crisis. They report ‘news’ (in reality arguments and scandal) but are truly hopeless at conveying insight.

These political outcomes have divided societies in the UK and the US, like none before. The reason it is pointless for me to argue for one political side or the other, is that the thing I care most about is jobs and incomes. Not about winning political debates. And jobs are not primarily made or lost by decisions about immigration, or who wields political power.

The jobs crisis is not fundamentally an outcome of political decisions. Yes Donald Trump is committed to getting jobs back for US workers. Yes the Brexit campaign succeeded because many people in Britain felt that unrestrained migration into the UK was creating unbearable pressure on our nation. They believed (contrary to much evidence), that immigrants were ‘taking our jobs’ and altering the fabric of our society for the worse.

The real drivers of falling incomes, long-term unemployment, and social unrest are nothing to do with immigration, or the UK’s membership of the EU, or who is in the White House.

We have a jobs crisis because the world is undergoing changes so immense that policy makers have no reliable models they can turn to with confidence that tell them what to do.

Pulling the traditional monetary levers of interest rates and money supply have proved completely incapable of reigniting sustainable economic growth. They have failed in the Eurozone, failed in Japan, failed in the UK and failed in the United States.

And that is because the changes going on are deep and structural. They are so deeply rooted that even the most sophisticated economic forecasting models and policy levers are completely inadequate to represent and remedy the complexity of what's happening and worse what will happen. They just don’t work in times like these.

In January this year, in an almost unheard of admission of failure, none other than Mark Carney, Governor of the Bank of England was forced to admit that the Bank’s economic forecasting models just didn’t work when a change as great as the Brexit vote occurred. These models work reasonably well in period of slow and gradual change. They fail completely when changes are large and rapid.

He went even further as I reported here. He admitted that up to half of all jobs in the UK would be eliminated by technology in the coming years.

The real drivers of job creation and destruction are what Marcia and I describe in detail in our book. We call them The Six Engines of Change. They are:

• Globalization and offshoring 
• Technology, artificial intelligence and robotics 
• Disruptive business models 
• Education and the speed of institutional change 
• Demographics and the aging population 
• Fiscal policy 

Firms are able to control their decisions about the first three of these. And they will make decisions based on their raison d’etre. I.e. they will do whatever makes the most money.

Government can do little other than play around the edges of these things unless we wish to submit to a centralized and totalitarian state. On the other hand, education, demographics and fiscal policy are areas where government policy can achieve greater leverage.

Yet none of these are a silver bullet which can reignite economic growth. They are blunt instruments as the central bankers would say. They impact slowly. Which is not helpful when people are struggling to make ends meet week in week out.

In a world which is changing faster than ever before, and where more and more people are feeling that their governments have failed them, we should not be surprised that politicians who promise sweeping change are able to win more votes than those who can only promise more of the same.

We can only hope that instead of playing to the gallery, they grasp the real fundamentals of what is happening and implement policies which truly reflect these complex realities of the 21st century world.

I really cannot predict what is going to happen next, but I have nagging feeling that real change is going to be harder to deliver than we’d all like.

Intel to join global job destruction initiative

20 April 2016

By Neil Patrick

The Wall Street Journal reported yesterday that Intel, the world’s largest computer chip maker is embarking on a swath of job cuts around the world, saying:

“Intel Corp. is planning to slash 12,000 jobs, 11% of its workforce, a consequence of the shrinking personal-computer market and the chip maker’s failure to take advantage of the industry’s transition to smartphones.

The restructuring announced along with first-quarter results on Tuesday is Intel’s largest yet in terms of the number of employees affected.”

The irony of the situation is obvious – one of the greatest creators and enablers of job destroying technologies in recent years is now having to face up to its own job loss tsunami. Champions of the job creation capabilities of the tech sector should be eating humble pie or at least turning maroon with embarrassment.

If the world’s tech giants are not going to create more jobs, who will? Intel isn’t a Facebook, an Uber, a TripAdvisor, i.e. one of the job-lite app-based giants of tech. It’s a manufacturer of the equipment that enables them and us.

We just got one step closer to a job free world.

Intel News issued a statement on 19 April confirming this:

“These changes will result in the reduction of up to 12,000 positions globally — approximately 11 percent of employees — by mid-2017 through site consolidations worldwide, a combination of voluntary and involuntary departures, and a re-evaluation of programs”

Meanwhile over on the Intel Twitter feed, despite this gloomy news, the Intel comms team were putting on a brave smiley face and were keen to tell us that they are in the world’s top six most ‘authentic’ brands and not at all a Micky Mouse company:

It’s not the end for Intel, but it does remind us how tech businesses are not immune to reality. All businesses have life cyles, some short, some long.

Intel’s troubles reflect a common challenge in the tech sector. Companies that lead one generation of computing often struggle in the next. For decades, IBM's large mainframe systems were the natural choice for the world’s biggest businesses. IBM’s business flourished across the board, yet IBM was forced to withdraw from PCs and low-price server systems as competitors sucked profits away from the business.

Intel’s troubles have been coming for a long time. After reaching a peak share price approaching $80 no doubt helped no end by the false flag of the Millennium bug (remember that?), the business share price has bounced around in the $15-$35 range ever since as investors have failed to see any significant grounds for major optimism:

What we are seeing with Intel is not the end but possibly the beginning of the end. And Intel’s own announcement reveals a dead giveaway:

"Chief Financial Officer, Stacy Smith, will transition to a new role leading sales, manufacturing and operations (my emphasis), once the company identifies a successor to Mr. Smith, a 28-year Intel veteran. The company has begun an executive search that will include internal and external candidates."

So a finance guy is being put in charge of sales, manufacturing operations.

I have nothing against finance people. In fact I like them. But they don’t know how to grow businesses. They just know how to reduce costs. When Finance is in charge of Sales and Operations, you know there will only be one outcome – short term profit gains and long term business contraction.

This is the classic life cycle of tech businesses: founded by technologists, then run by operations, followed by marketing, then sales, then finance, and finally by lawyers.

Intel appears to be just one step away from the end game…

Davos is depressed this year, and we should be too

By Neil Patrick

Welcome to an exciting brand new year. What does 2016 have in store for us? Well the world's top economic, business and government minds are all in Davos to figure it out for us.

Here in the UK, despite the government crowing about the record number of ‘jobs’ it has created (actually this is only true if we count what I call the 'self-unemployed'), there’s no sign that many normal people actually feel much better about things. In the US, a similar pattern is occurring; a slight uptick in hirings, but a persistent deterioration of incomes.

From my perspective it's all been rather obvious for a long time now: the world is trapped in a vicious circle of low growth, low interest, low inflation and low hope.

In September 2014, the World Bank finally decided the global jobs crisis was more or less ‘official’ as I reported here. According to their estimates, the global economy needs to create a further 600 million jobs by 2030, just to keep pace with population growth.

16 months later, and this topic is now one of the main themes of the World Economic Forum at Davos. This week, the world’s elite in business, government and rather weirdly IMHO, entertainment (Bono, Will.I.Am, and Leonardo DiCaprio are there too), have all gathered in this swanky ski resort in Switzerland. Not surprisingly, no-one invited me or anyone I know.

Davos in Switzerland - Where the world's elites are this week
Credit: de:Benutzer:Flyout

As the super rich engage in their own peculiar form of networking and schmoozing with their peers, the world’s stock markets are in turmoil, global investor confidence is tanking, interest rates seem to be stuck for at least another year, oil prices are in free fall and the wealth and incomes of ‘normal’ people are continuing to shrivel. Oh, and just to add insult to all this economic injury, here in Wales, it has been raining for the last 81 days…

But even the just modestly well-off are taking a hammering too as trillions have been wiped off stock values since the year began. Sir Martin Sorrel, chairman of U.K.-based advertising giant WPP was characteristically pragmatic saying:

"The new normal is a low-growth world"

Sorrell is worried that companies are not confident enough to invest in new projects that might create growth and jobs. Instead, they increasingly prefer to reward shareholders with dividend payments and share buybacks.

And consumers remain wary too; nearly eight years after the global financial crisis saw the collapse of many banking groups and triggered the deepest recession since World War II, many retailers have reported massively disappointing sales over the Christmas period.

But let’s not despair. Fortunately Swiss bankers UBS have come up with a 'keynote' report which deals with the main theme for this year’s Davos conference. It is titled excitingly, “Extreme automation and connectivity: The global, regional, and investment implications of the Fourth Industrial Revolution”.

Well I was excited by it…

I don’t expect you to read it, but if you are as nosy as I am and have some spare time, here’s the link to it.

The mainstream media is busy not reading it much either, either because they are too dazzled by the parade of rich and famous people they are itching to photograph, or because for them this is just another reporting gig and careful reading of such things takes too much time when they have tight editorial deadlines to meet.

However anoraks like me do read such things. Very carefully.

In case you are not familiar with the who’s who of global private banking, let’s just summarize UBS’s resume. UBS is the biggest bank in Switzerland, operating in more than 50 countries with about 60,000 employees globally. It’s the world's largest ‘manager’ of private wealth assets, with over CHF 2.2 trillion in invested assets. In other words, it’s the bank of choice for the world’s super rich.

Swiss banks do not care about the likes of you and me. They do care about things like making friends with the rich, powerful and influential folk at Davos. They work hard at this (aka spending lots of money). And they apply a lot of their considerable reserves of brain power too. The term ‘establishing our thought leadership’ was doubtless bandied around their offices a lot as the work was being done on this report.

Over the years, UBS has built up an extensive corporate resume of what Wikipedia rather euphemistically call ‘controversies’. These include laundering Nazi holocaust assets, tax evasion in the US, France, Germany and Belgium, LIBOR rigging, bond market rigging, currency benchmark rigging, FOREX manipulation, rogue trading, misrepresenting mortgage backed securities, and illegal arms sales money laundering.

There is a full description of all these accomplishments and more on Wikipedia here.

In the interests of balanced reporting I should point out that UBS is ranked in the US as amongst the top 100 best places for mothers with children to work and invests significant sums in the arts and cultural sponsorships. In October 2013, UBS Wealth Management was voted the Best Global Private Bank by Professional Wealth Management, while also being recognised as the Best Private Bank for Philanthropy Services, and the Best Global Brand in Private Banking.

A Thomson Reuters survey ranked UBS number one in all three of the key disciplines of research: Research ; Sales and Equity Trading and Execution. UBS was also named as the number one leading pan-European brokerage firm for economics and strategy research.

I will let you form your own views about the question, ‘If UBS was a person, who would they be?’

The UBS report sets out to forecast the impacts of current trends in technology, markets, business and politics to provide a view of the economic outlook for different countries around the globe.

The introduction proclaims:

“Previous industrial revolutions have been driven by rapid advances in automation and connectivity, starting with the technologies that launched the First Industrial Revolution in 18th century England through to the exponential increases in computing power of recent decades. The Fourth Industrial Revolution is based on the same two forces. The first is extreme automation, the product of a growing role for robotics and artificial intelligence in business, government and private life. The second, extreme connectivity, annihilates (interesting choice of verb – Ed.) distance and time as obstacles to ever deeper, faster communication between and among humans and machines.”

So far, so what? If you have been alive and awake at all in the last few years, this is as obvious as the fact that night follows day. And as anyone who has followed this blog from the beginning knows, I have being banging on about this for over three years.

They continue:

“These changes will have very different effects on nations, businesses and individuals. Automation will continue to put downward pressure on the wages of the low skilled and is starting to impinge on the employment prospects of middle skilled workers.”

It isn’t starting guys, it’s been happening for the last ten years at least (But I know, you’ve been a bit distracted).

But wait, there’s good news (sort of):

“By contrast the potential returns to highly skilled and more adaptable workers are increasing.”

Interesting that the word ‘potential’ is used here. This is a word bankers love, because it’s a get out of jail free card. “Highly skilled and adaptable” is also code for willing to move anywhere, accept work on any terms and be able to do the work at a pace and level of excellence beyond our that of our peers. Good news for all you wunderkinds. Not such good news for everyone else.

“Among corporations, a wide range of traditional businesses – especially those that act as intermediaries – can be expected to suffer. Many labor-intensive firms should be able to boost profit margins as they substitute costly workers for cheaper robots or intelligent software (my emphasis).

Now we are getting to the real problem. So called “traditional businesses” are ones that have successfully grown over many decades and employ(ed) lots of people. And yes, they are shrinking, automating and collapsing faster than ever. Those that are still alive are seeking to slash costs and boost profits through more and more deployment of technology.

But don’t worry, it’s all going to be okay because:

“… a range of entirely new companies and sectors will spring into existence. For nations, the largest gains from the Fourth Industrial Revolution are likely to be captured by those with the most flexible economies, adding a further incentive for governments to trim red tape and barriers to business.”

The key to economic success for nations and individuals alike in the future is flexibility. I agree with UBS on this point. But this is also where the whole hopeless vision falls apart. Because we can’t even keep up with the pace of tech change today, let alone tomorrow; as anyone familiar with Moore’s Law also knows, these changes are only going to accelerate.

How many Ubers, Googles, Trip Advisors, Air B’n’Bs does it take to create just a million jobs? Every single one of these ‘disruptive innovators’, (or whatever MBA style label you wish to put on them), ‘work’ - at least for a short time - because they need very few employees relative to their revenues and capital. Unlike traditional businesses, their capital is not in human assets, it is in tech assets. Robots are not paid a salary. And they don’t go shopping.

Worse, the traditional industries that they disrupt are people heavy. It’s a double whammy of the job-lite businesses destroying the job-heavy ones. This is the horrible economic reality of disruptive business models.

And neither UBS nor any commentator I can find, has any practical remedy for this cannibalization of jobs. The only glimmer of hope is that as costs of living continue to fall, the strangulation of household incomes will effectively be loosened.

The trouble is that achieving this flexibility is fraught with difficulty. And making it happen quickly enough is almost impossible when we consider the different speeds at which technology and our people, organisations and institutions are capable of moving.

UBS can see that they will do very nicely if their vision or anything like it actually materialises. There will be many more super rich in the world, but also a great many more who used to be comfortable, becoming very uncomfortable. The first group matters to UBS. The rest of us do not.

Happy New Year.

The unemployed - they are absolutely not who you think

By Neil Patrick

The whole reason that I started this blog was vindicated for me this week in just one paragraph by my good friend, Twitter star and fellow blogger Andrew Ginsburg (Twitter @GinsburgJobs) within an email he sent me. Here’s an excerpt:

“I was recently at a birthday party and realized almost all of the men were unemployed. I am the youngest of all of them, but most are Harvard Law or Business School grads, even a friend who I grew up with who has been a very successful investment banker in New York for the last 30 years was laid off last year. He has the luxury of having tens of millions of dollars in the bank so he can seek out a different path. Most of us don’t have that. Even another friend, who went to Harvard undergrad and Business school said that many of his colleagues have been let go.”

This single paragraph would be unthinkable even a just a few years ago. People who have worked hard for decades and achieved professional success in their chosen careers are today facing unemployment in their hundreds of thousands. 

This situation isn’t because of the recession. It’s not going to suddenly get ‘better’ if and when our economies improve. Economists call this “structural unemployment”, and Wikipedia defines it thus:

“Structural unemployment is a form of unemployment where, at a given wage, the quantity of labor supplied exceeds the quantity of labor demanded, because there is a fundamental mismatch between the number of people who want to work and the number of jobs that are available.”

Most of us never think about types of unemployment. If you have a job, or work for yourself, you are considered to be employed. If you don’t, you are either retired, in education or unemployed. But today, structural unemployment is devastating the group that is popularly considered the most over-privileged in the world – white, middle-aged, middle class men.

I can almost hear the heckling of the young, working class and under-privileged now saying “Haha! Welcome to our world suckers! You created this mess, so now you can suffer with the rest of us”.

Such twisted triumphalism gets us nowhere. Those who’ve played by the rules they were given, worked hard and contributed the most to society (not to mention the government’s coffers) deserve neither condemnation nor vilification.

And letting them rot on the scrap heap is the worst thing we can let happen. If there is any long-term solution to reigniting economic growth in the US and Europe it won’t be based on low skill jobs and even lower wages. If there is economic salvation available, it will be because we are able to out-perform the rest of the world in our creativity, competitiveness, innovation, entrepreneurialism and critically, our ability to evolve and lead in what Jeremy Rifkin calls “The Third Industrial Revolution”.

Anarchy, revolution or class war won’t deliver any prospect of this. Neither will groupthink or any amount of youthful enthusiasm. But re-engaging the experience, maturity and brainpower of those greying guys on the scrapheap just might, if we ask them nicely (and provided they learn how to function in the digital age).

The jobless recovery continues

By Neil Patrick

If redundancies are slowing and hiring is rising, how come no-one feels much better about the outlook?

There are confusing signals coming out right now around the supposed economic recovery. We know that hiring rates are rising. Incomes and spending are on the up too. We also know that workers are increasingly feeling confident enough to quit jobs they don’t like. This fact alone pushes up the volume of hiring activity. So this part of the situation can be at least partially explained.

An oft-quoted opinion about the persistence of unemployment is that workers don’t have the right skills. If this were true, then we’d expect to see that in some sectors, the numbers of unemployed workers would be dwarfed by the numbers of job openings. Employers would have no choice but to settle for less than ideal candidates and many vacancies would remain unfilled.

So is this the case?

Here’s the breakdown for Feb 2015 by industry sector in the US:

What we can see here is that with just one exception, namely Healthcare and Social Assistance, the number of unemployed workers still massively exceeds the number of job openings.

For example, in construction, the number of unemployed workers exceeds the number of job openings by five and a half times. In the enormous sector of retail, unemployed retail workers exceed job openings by around two to one.

This is a jobless recovery. And the lack of any significant recovery in the US labor participation rate confirms this:

So what is going on? Here’s my hypothesis.

First there is a flight to technology investment over investment in human capital. In the seven or so years since the onset of the Great Recession, technology has made huge strides. The result is that most organisations can today accomplish the same or a greater amount of work with a smaller workforce than they did even just a few years ago.

Second, the globalization of workforces means that many jobs which used to stay firmly in the domestic market are now spreading around the world. And it’s not just a cheap labor argument. I recently had lunch with an entrepreneur friend who told me that almost his entire workforce was now composed of freelancers based the Philippines. Yes it was cheaper than a UK workforce (by about 75%), but critically this wasn’t his main reason for the choice. He was in the business of web content production and he had found that his overseas workers were more diligent, more proactive and had better written English than the people he used to employ in the UK.

Thirdly, endlessly falling marginal costs of production mean that revenues and inflation are acting as a brake on spending levels and wage growth. Both have a negative impact on incomes, spending and government tax receipts.

The forty-thousand dollar question is will business growth and continued recovery result in more jobs for humans being created or will the robots steal them?

Why your next job contract may scare you to death

By Neil Patrick

We are inclined to think of our careers as a steady climb to a peak of success and personal fulfillment. That 's great from the point of view of a personal life goal. The trouble is that employers are rapidly abandoning any commitment to helping us do that. 

We're on our own and we're not climbing a mountain, we're riding a very rickety roller-coaster. But if we understand how employer thinking is evolving and practices are changing, then at least we have a better view of what's ahead and how we can survive the ride.

Today I came across an insightful piece on Forbes by Edward Lawler titled in perfect management speak, ‘Creating Talent Agility’.

It’s written for an audience of business and HR people, but it reveals much about how we can expect employers to treat employees in the future.

Warning: This post contains facts which some readers may find disturbing...

The reality is that there’s now a yawning gap between what employers are willing to offer and how employees define a good employer.

The traditional implied contract between employers and employees for most jobs was abandoned years ago. This isn’t because employers have become somehow more evil. It’s the hard realities of business in an ever more competitive global business environment. Lawler reminds us that this change is also accelerating:

“Organizations must be increasingly agile in ways that allow them to change what they do and how well they do it. Organizations have always had to change the skills of their workforce. The big difference today, however, is how rapidly this needs to happen and how much change needs to occur”.

Lawler goes on to describe three employer models and gives examples of who uses them and why. 

The traditional career employer

This is probably closest to how most people think an employer should behave towards its employees. It’s been around so long that it has become the default position for how most of us frame our expectations about what a good employer does.

It’s still used by some organizations including General Electric. Lawler describes it thus:

“Fundamentally, it relies on a career model of talent development and agility. Individuals are told that if they will commit themselves to a career at the company, it will “look after them” and be sure that they are trained and developed for tomorrow’s jobs. When new skills are needed, individuals are expected to want to learn the new skills because they know it is in their best interest for their long-term job security and career development.” 

The contractor-employer

The second category Lawler identifies is what I think resembles long-term contract work. There is no implied employer obligation to the employee beyond paying you. When your usefulness expires for whatever reason, you’re out. Period. This model is used by firms like Netflix, LinkedIn, and many other tech companies.

In Lawler’s words:

“It tells individuals that they will be well-paid and have a job as long as they can perform at a high level and do the work that needs to be done. There is no promise of a career, skill development, or job security. This approach produces low transaction costs when it comes to shifting the skill sets of the organization. Training is not required and terminations can be relatively easily executed without individuals feeling the organization has violated their employment contract.”

For workers who have highly sought after skills and the willingness to be highly mobile in their work, this model delivers high returns in exchange for a somewhat nomadic lifestyle. It’s great for a young tech worker, but almost unworkable for just about everyone else. 

Crowdsourced labour

According to Lawler, “Odesk and other companies have developed crowdsourcing technologies that allow organizations to buy labor that is willing and able to perform tasks for a contracted amount. In essence, the organization relies on outsourcing much of its labor and may outsource anything from a few hours to a few months’ worth of work. It is frequently used by companies that are looking for software development, but also for less skilled labor such as survey respondents and a host of more transactional activities. “

This model is closest to what has been termed “labour on demand”. Whilst Lawler quotes its popularity in the software development sector, in the UK at least, it has spawned a much more sinister variant, the ‘zero hours contract’.

Almost unheard of in the United States and mainland Europe, in the UK, looser government employment regulations have allowed firms to employ workers with no guarantee of the number of hours work they will get each month. It’s often an unequal contract in which the worker commits to availability for work, whilst the employer makes no commitment to actually providing any minimum number of hours of work.

For employers with highly fluctuating requirements for low-skilled labour, the zero-hours contract has been a godsend. Suddenly their workforce can be increased or decreased almost in realtime. At a stroke one of their major cost problems is eliminated.

But this isn't the end of the story. When we consider this development alongside the impact of technology on jobs which is deskilling some work and eliminating other jobs altogether, we get a glimpse of a seriously distopian future.

In an employment sector which was merely providing work for people who wanted to earn small second incomes, this would be a good thing. The terrible realty in a depressed jobs market is that this type of work has exploded and for many low-paid workers, it is the only work they can find.

From a small base of around 50,000 UK jobs in 2005, zero hours contracts have grown and grown. The Office for National Statistics (ONS) quotes that there are now a staggering 1.4 million zero hours contracts in use in the UK in 2014!

N.B. Here's a link to the latest (Autumn 2016) report and stats about zero hours contracts from the Office for National Statistics.

Of course the government loves zero hours contracts because along with the growth in 'self-unemployment', such ‘jobs’ allow the government to report falling unemployment. It’s spin and it supports the growth in wealth inequality.

Worse it’s now a feature of many ‘respectable’ firms’ employment practices. According to Wikipedia, one of the UK's largest pub chains, J D Wetherspoon has 24,000 staff, or 80% of its workforce, on contracts with no guarantee of work each week. 90% of McDonald's workforce in the UK - 82,000 people - are employed on a zero-hour contract. Britain’s biggest and most troubled supermarket chain, Tesco uses zero hours contracts.

A major franchise of Subway also uses the contracts, which state, "The company has no duty to provide you with work. Your hours of work are not predetermined and will be notified to you on a weekly basis as soon as is reasonably practicable in advance by your store manager. The company has the right to require you to work varied or extended hours from time to time." Subway workers are also required, as a condition of employment, to waive their rights to limit their workweek to 48 hours.

Boots UK has 4,000 staff on zero-hours contracts. Even Buckingham Palace, which employs 350 seasonal summer workers, now uses zero hours contracts.

My take is that hard cash will always trump elegant academic and ethical arguments in most businesses, most of the time. And since the cost of labour is usually the largest part of any business's operating costs, what we are witnessing isn’t a growth in employment options, it’s a relentless movement towards less and less secure employment and lower incomes for most people most of the time.

Who will take ownership of the jobs crisis?

By Neil Patrick

My recent posts have talked about the impact of technology on jobs. But this is far from the only threat to employment and a jobs recovery in the west. Off-shoring is a major progenitor of the jobs crisis. And the biggest problem with off-shoring is that no-one thinks it's a problem....except those who suffer its consequences and can do nothing about it.

The jobs crisis is real. The World Bank certainly thinks so as you can see here.

The problem is that no-one wants to take ownership of it. Just like the old saying, “Success has many fathers, but failure is an orphan”.

Empires have a habit of crumbling...

Governments have had an easy ride until now. Provide some tax-breaks and incentives to business here, some support for the unemployed there. Survive some rough and tumble with trade union negotiations without too much alienation of the electorate.

None of these things are comparable to the systemic collapse of jobs we now have to deal with in Europe and North America.

Thus, nothing that has gone before has equipped anyone in government with the skills and tools required to solve this problem.

And worse, big business can no longer be relied upon to act as a committed ally in the struggle. Globalization and off-shoring mean that the win-wins that were previously available for governments who acted benignly towards big business have disappeared. Permanently.

And this is why governments must rethink their relationships with big business.

Businesses drive to make the most profit they possibly can. Provided they stay within the law, no holds are barred. That’s the very nature of capitalism and a free market economy.

Big businesses think and act globally. But governments and citizens naturally enough think nationally and locally.

It is this mismatch in scale and geography which is at the heart of the problem.


Offshoring is a genie let out of the bottle

About 35 years ago, western firms started sending low skilled manufacturing work abroad on an ever increasing scale. By the late 1980s this was well established. And it grew. And grew. This mass-migration of jobs was overwhelmingly in one direction: away from rich countries to places where workers with adequate skills were much cheaper.

Shanghai - plenty of jobs here

Whether openly stated or not, lower labour costs were almost always the biggest driver. At first. For many firms, their survival was at stake, since new competitors were undercutting them on price. This usually involved closing plants in America and Europe and moving production to new factories in China, Mexico, Taiwan, Thailand, or Eastern Europe.

The most commonly cited benefits of off-shoring were fourfold:

• For workers in low-cost countries it would provide jobs and rapidly rising standards of living.
• Rich-world workers would be able to leave the dreary work to someone else.
• For consumers, they’d be able to buy goods at much lower prices than if production was onshore.
• For companies, lower labour costs would bring higher profits.

The trouble is that whilst these are all good things in small doses, what happens when the scale of the activity becomes so great that the migration of jobs elsewhere exceeds the ability of the domestic economy to create new ones at home?

Who cares that they can buy a new TV cheaper than ever before, if they cannot even afford to buy food or fuel?



The jobs are never coming back – even Steve Jobs thought so…

Off-shoring from West to East is now a major creator of job losses in rich countries. And not just for the less skilled, it’s now devastating the middle classes too.

US jobs reduction mirrors off-shoring

When Barack Obama joined Silicon Valley’s captains of tech for dinner in California in February 2011, each guest was asked to come with a question for the president.

As Steve Jobs of Apple spoke, Obama interrupted him with a question: “What would it take to make iPhones in the United States?”

Not so very long before, Apple had boasted that all its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold the previous year had been manufactured overseas.

"Why can’t that work come home?" Obama asked.

Jobs’ reply was unambiguous. “Those jobs aren't coming back,” he said.

Jobs' answer revealed the attitude at Apple and most global businesses. It isn’t just that labour is cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories , their flexibility and industrial skills have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most consumer products.



Government thinks big business is its friend…not anymore

Apple is one of the best-known, most admired and most imitated companies on earth. In 2011, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what vexes Obama, economists and policy makers is that Apple and many of its high-technology peers are not nearly as committed to creating American jobs as the previous generations of US industrial giants were.

In its early days, Apple didn't look much beyond its own backyard for manufacturing solutions. A few years after Apple began building the Macintosh in 1983, Jobs bragged that it was “a machine that is made in America.”

But by 2004, Apple had largely turned its back on the US and moved to off-shore manufacturing. Central to that decision was Timothy D. Cook, who replaced Jobs as chief executive in August, 2011, six weeks before Jobs’s death. Most other American electronics companies had already gone abroad, and Apple, which at the time was struggling, felt it had to seize any advantage it could find.

In part, Asian manufacturing was attractive because the semiskilled workers there were cheaper. But that wasn’t the main thing that attracted Apple.

For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of sources and suppliers. And as automation and AI inexorably increase, so the labour part of the equation becomes even less of a factor.

For Cook, the focus on Asia came down to two things. Factories in Asia can scale up and down faster and Asian supply chains have now surpassed what’s possible in the U.S. The result is that much of America’s manufacturing capacity has become largely obsolete. American manufacturing relative to Asia is now not unlike the Soviet Union was relative to the west in the Cold War era.



How many Apple’s are needed to make one General Motors? 10 actually…

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s.

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, formerly an economic adviser to the White House.

“If it’s the pinnacle of capitalism, we should be worried.”

This used to be US car factory - today, it's a shopping mall

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s on-site dormitories. Each employee was given a biscuit and a cup of tea and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Similar stories could be told about almost any electronics company — outsourcing has become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.



So who wants to own this problem?

Apple’s decisions reveal why the success of some prominent companies has not translated into large numbers of domestic jobs. “Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, formerly the chief economist at the Labor Department. “That’s disappeared. Profits and efficiency have trumped generosity.”

Companies and other economists think that notion is naïve. Though Americans are among the most educated workers in the world, they say the government has stopped training enough people in the mid-level skills that factories need. Clearly education alone is not enough to solve the problem.

To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers, including GM and others that have shrunk as more nimble competitors have emerged.

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

So business says it's not their problem and government doesn't know how to solve it. And just like two squabbling children, neither will accept any responsibility. Let alone ownership.

And that’s the crux…business will keep on doing what business does, chasing profits. And government will keep on doing what government does…

This may be the biggest problem facing North America and Europe today, but no-one wants to own it.



Some information in this post was taken from this article in the New York Times: LINK

Who employs older workers?

By Neil Patrick

There are always plenty of opinions floating around about which types of business employ younger people and whether or not this is fair or even sensible. I have expressed my own views on this often enough on this and other blogs.

Today though I opted for a different tack. I thought I’d run some numbers and see what they revealed.

This was by no means an exhaustive study, but I was amazed by what I found.

I expected there to be few discernible patterns and yet I found quite the opposite. This quick dip into the numbers showed conclusively that there is a huge variation across business sectors when it comes to the age of their staff.

My method was simple enough. I just took the average age of employee as recorded in the Sunday Times top 50 best UK companies to work for as reported for 2014.

To calculate a simple benchmark, assuming a normal distribution curve based on an age range of 18 years to 65 years old, the mean age of employees should be 41 years. Higher than this means the workforce is older; and vice versa.

Now of course this assumes also that the available workers for each age group are the same, which of course, they are not. The baby boomers for example created a significant swelling of their age group as a proportion of the total population. So my purely mathematical average cannot be taken as wholly accurate – just a rough approximation.

Meet the new boss...

I simply wanted to discover which, if any sectors had demonstrably older workers and which ones had younger workers.

Since the average age of employee is not a significant factor in the Sunday times’ ranking, we can take this as a more or less randomised sample of the age profiles of people working in UK businesses today.

Moreover, every one of these firms has been assessed to be well liked by their employees, so they also represent some of our best employers.

So based on this data, here is the average age of employee at the top 50’s best UK firms to work for which I have re-ranked by oldest average age of employee to youngest (the original list rank is also shown in the first column):

N.b. I am not suggesting that my re-ranking makes any of these companies more or less ageist. There are plenty of perfectly valid and legitimate reasons why a company might have an older or younger age profile within its workforce.

What I was interested in was to see if there were any patterns when I re-ranked the list - and there certainly are.

The two firms ranking first and second are both from the same sector – contract catering.

Three of my list’s top 10 are from the pharmaceutical/medical sectors.

On the other hand, four of the five firms at the youngest end of this list were from two sectors – recruitment and financial services.

This list reveals other facts too. First the range of average ages 45 at oldest to 21 at youngest, reveals a huge range of age profiles across the sample firms – clearly if you are only in your early forties, you are already well past the average age of the majority of sectors’ employees.

Second, taking the approximate average age we’d expect to see – c.41 years - only 6 firms (12% of the list) had an average age that was older than this.

To sum it up, if you are over 40 and looking for work, contract catering looks like your best bet unless you have experience from the pharmaceutical sector…

Stephen Hawking on the threats of artificial intelligence

By Neil Patrick

It was an odd co-incidence that yesterday I posted a piece sub-titled “Is your job at risk of being taken by a machine? A few hours later Professor Stephen Hawking was featured on the main BBC evening news with an even more gloomy prediction that artificial intelligence could be the greatest threat to the very existence of mankind.

Hawking, one of Britain's pre-eminent scientists, went much, much further than I was brave enough to do. He said that efforts to create thinking machines pose a threat to our very existence. He told the BBC: "The development of full artificial intelligence could spell the end of the human race."

Hawking is a theoretical physicist, who has the motor neurone disease amyotrophic lateral sclerosis (ALS) and is currently using a new AI assisted speech system. His warning came in response to a question about an upgrade of the technology he uses which was developed by Intel.

Machine learning experts at the British company Swiftkey were also involved in its creation. Their technology, already employed as a smartphone keyboard app, learns how he thinks and suggests the words he might want to use next. ("God help us" seems like it might be useful).

Hawking believes the basic forms of artificial intelligence developed so far have proved very useful, but he fears the consequences of creating something that can match or surpass humans.

"It would take off on its own, and re-design itself at an ever increasing rate," he said.

Professor Stephen Hawking

Ever mindful of its commitment to balanced reporting, the BBC was quick to find an expert commentator with an opposing view. Rollo Carpenter, creator of Cleverbot added to the debate saying,  "I believe we will remain in charge of the technology for a decently long time and the potential of it to solve many of the world problems will be realised." 

Cleverbot is software that is designed to chat like a human would. Its  software learns from its past conversations. In tests, it fooled a high proportion of people into believing they were talking to a real person.

Carpenter asserted that we are still a long way from having the computing power or the algorithms needed to achieve full artificial intelligence. But even he believes it will come in the next few decades.

"We cannot quite know what will happen if a machine exceeds our own intelligence, so we can't know if we'll be infinitely helped by it, or ignored by it and sidelined, or conceivably destroyed by it," he said.

I need to be braver in my position I think. And my opinion inclines more to Hawking for the simple reason that he has absolutely no vested interest in allaying concerns about the threats of technology.

I don't fear being physically killed by an out of control robot. I do fear that our whole economic system and the jobs within it will be killed if we don't do something.

I don't need to contemplate the distant future. Even today's 'basic' AI and technology is destroying jobs right now every day. Hawkings and Rollo are both contemplating the future decades ahead.

But that’s academic. The distant future isn’t the issue. Today is.

The top 30 jobs most at risk from technology

By Neil Patrick

Is your job at risk of being taken by a machine?

As technology continues to take jobs from people, so I’ve accelerated my research to try and figure out what this means for the future of work and what we can do about it.

I spend a lot of time talking to diverse experts who have insight on this subject and digging out relatively obscure research. This is far away from mainstream media which is high on attention grabbing headlines, but low on valuable insights.

So I was pleased today to discover a research paper by Oxford University academics Carl Benedikt Frey and Michael A. Osborne published in September 2013. Their research examines how susceptible jobs are to computerisation.

Their paper is titled: The Future of Employment: How Susceptible are Jobs to Computerisation?

You can read the whole document here.

Frey and Osborne developed a model which examined the current and anticipated capabilities of technology and then compared the tasks involved in carrying out over 700 different jobs. This enabled them to then rank each job by its vulnerability to being reduced or eliminated by technology in the future.

Of course, robots and IT systems are still unable to match the depth and breadth of human perception. While basic pattern recognition is reasonably mature, enabled by the development of sophisticated algorithms, sensors and lasers, significant challenges remain for more complex perceptive tasks.

So some jobs are at high risk. Others are currently relatively immune.

Computers are not so good for example at identifying objects and their properties in a cluttered field of view - hence the very nature of those annoying Captchas... Similarly, tasks that involve a complex and unstructured work environment make jobs less susceptible to computerisation.

The least at risk jobs therefore include:

Recreational Therapists

Supervisors of Mechanics, Installers, and Repairers,

Mental Health and Substance Abuse Social Workers

Audiologists

Occupational Therapists

Orthotists and Prosthetists

Healthcare Social Workers

Oral and Maxillofacial Surgeons

First-Line Supervisors of Fire Fighting and Prevention Workers

Dietitians and Nutritionists

Choreographers

Sales Engineers

Physicians and Surgeons

Psychologists,

First-Line Supervisors of Police and Detectives

Dentists

Elementary School Teachers

But even these jobs are indirectly at risk. Whilst the whole of a job may be currently impossible for a machine to replicate, parts of that job may well be perfectly capable of being replaced or aided by technology.

This fact in turn means that fewer people are needed to deliver the same amount of work.

And business has a habit of quickly finding ways round current technological limitations. If a human task cannot be replicated exactly by a machine, then why not just adapt the task so it can be?

So the limitations of perception by machines can sometimes be sidestepped by clever task design. For example, Kiva Systems, acquired by Amazon.com in 2012, solved the problem of warehouse navigation for its robots by simply placing bar-code stickers on the floor, informing them of their precise location. Problem solved! And fewer humans needed…

Anyway, the title of this post promised the top 30 most at risk jobs as identified by the research.

And here they are (and I sincerely hope your job is not on the list).

672. Legal Secretaries

673. Radio Operators

674. Driver/Sales Workers

675. Claims Adjusters, Examiners, and Investigators

676. Parts Salespersons

677. Credit Analysts

678. Milling and Planing Machine Setters, Operators, and Tenders, Metal

and Plastic

679. Shipping, Receiving, and Traffic Clerks

680. Procurement Clerks

681. Packaging and Filling Machine Operators and Tenders

682. Etchers and Engravers

683. Tellers

684. Umpires, Referees, and Other Sports Officials

685. Insurance Appraisers, Auto Damage

686. Loan Officers

687. Order Clerks

688. Brokerage Clerks

689. Insurance Claims and Policy Processing Clerks

690. Timing Device Assemblers and Adjusters

691. Data Entry Keyers

692. Library Technicians

693. New Accounts Clerks

694. Photographic Process Workers and Processing Machine Operators

695. Tax Preparers

696. Cargo and Freight Agents

697. Watch Repairers

698. Insurance Underwriters

699. Mathematical Technicians

700. Sewers, Hand

701. Title Examiners, Abstractors, and Searchers

702. Telemarketers

Is artificial intelligence the greatest threat to human existence?

By Neil Patrick

Here’s a clip from the Rubin Report in which Elon Musk states “AI is like summoning the demon”.

Interesting coming from someone who more than most people is at the forefront of understanding and developing high tech future businesses.

Does he know something we don’t?





The ensuing discussion in the clip seems to miss the point. Rubin’s mates have been watching too many dystopian movies and playing too many computer games in which robots go on killing sprees I suspect.

I wonder if the real reason Elon Musk is so cautionary about AI isn’t because we’re at risk of being slaughtered by evil robots, but because he can see that technological development is now outstripping the abilities of our current political, economic and social systems to keep up.

And that this situation means we have 21st century technology but 20th century political, education, economic, social and legal systems.

The outcome of this two speed society is that jobs will disappear faster than ever…and no jobs equals no money. And in our world, no money is effectively extinction…?

Is this what he’s really hinting at?

Have you got the key skills for the information age?

By Neil Patrick

I’ve  been writing a great deal recently about the destruction of jobs by what is variously called, the third industrial revolution, knowledge economy or new machine age. This situation creates a whole new set of challenges for everyone who wants to earn a living in these tough times.

Most of us know it is happening. What's thin on the ground is information about what we can do about it.

We need new solutions and we need to take personal ownership of our own countermeasures.

This isn’t just my opinion. Multiple and diverse organisations are reporting the same thing:

Manpower states that despite the recession, 31% of employers struggle to find qualified workers because of “a talent mismatch between workers’ qualifications and the specific skill sets and combinations of skills employers want.”

The American Management Corporation says that employers want workers who can think critically, solve problems creatively, innovate, collaborate, and communicate.

The National Association of Manufacturers reports, “Today’s skill shortages are extremely broad and deep, cutting across industry sectors and impacting more than 80% of companies surveyed. This human capital performance gap threatens our nation’s ability to compete . . . [and] is emerging as our nation’s most critical business issue."

The National Academies claim that “The danger exists that Americans may not know enough about science, technology, or mathematics to contribute significantly to, or fully benefit from, the knowledge-based economy that is already taking shape around us.”

The New York Times reports that low-skilled workers are being laid off and "turned away at the factory door and increasingly joining the swelling ranks of the long-term unemployed . . .” This issue results from a disparity between the skills that workers have and those that employers need.

So what can we do about it?

If the last time you sat in a classroom was at university or an employer’s course, the chances are high that your learning skills have significantly reduced. Of course we all acquire job specific skills at work, but what we don’t generally continue to develop in our jobs are the learning skills that are now critical for 21st century career survival.

If we accept that the pace of change in the world is accelerating, then it is logical to conclude that our ability to adapt to change must also be increasingly critical. And the key enabling mechanism for coping with change is learning.

What are the key learning skills for the 21st century workplace?

21st century skills are a set of abilities that everyone needs to develop in order to succeed in the information age. The Partnership for 21st Century Skills has identified three key learning skill areas.

I call them the three Cs of thinking; critical thinking, creative thinking and collaborative thinking:

Critical Thinking

Critical thinking is the ability to think clearly and rationally. It includes the ability to engage in reflective and independent thinking. Someone with critical thinking skills is able to do the following :

 

• understand the logical connections between ideas 
• identify, construct and evaluate arguments 
• detect inconsistencies and common mistakes in reasoning 
• solve problems systematically 
• identify the relevance and importance of ideas 
• reflect on the justification of one’s own beliefs and values 

After we leave education and start to exist in the world of our jobs, our critical thinking skills may easily become rusty. Other factors start to influence and direct our thought processes. The competitive environments we often experience encourage competitive reactions – the exact opposite of one of the other Cs – collaboration.

So good critical thinking skills not only break the force field of groupthink, they also encourage collaboration.



Creative Thinking

This is the process by which individuals come up with new ideas or new approaches to business. New ideas could result in new products, procedures or policies. They could also result in a new process that cuts costs or improves quality - for example, a bagless vacuum cleaner.

Fresh ideas give businesses a competitive advantage and help make their goods or services stand out in the market place.

We can make use of several different thinking techniques to improve our creativity:

• Lateral thinking or thinking outside the box. An example of this would be breaking down the steps taken to serve coffee in a café and asking 'why' at each step to see if a better process can be created. 
• Deliberate creativity uses thinking techniques to spark off new ideas. For example, putting on different thinking hats to tackle problems from different angles. 'White-hat' thinking looks at facts and 'black-hat' thinking looks at drawbacks. 
• Blue-sky thinking involves a group of people looking at an opportunity with fresh eyes. As many ideas as possible are generated in an ideas generation session where no ideas are rejected as silly. 

Collaborative thinking

There are generally accepted to be seven rules for all collaboration:

Look for common ground: find shared values, consider shared personal experiences, pay attention to and give feedback, be yourself and expect the same of others, be willing to accept differences in perception and opinions

Learn about others: consider their perspectives and needs, appeal to the highest motives, let others express themselves freely

Critique results, not people: do not waste time on personal hostility, make other people feel good, avoid criticism and put downs

Give and get respect: show respect for others' opinions, be considerate and friendly, put yourself in the other person's shoes, be responsive to emotions, speak with confidence but remain tactful

Proceed slowly: present one idea at a time, check for understanding and acceptance of each idea before moving on to the next. Speak in an organized and logical sequence.

Be explicit and clear: share your ideas and feelings, pay attention to nonverbal communication, speak clearly and make eye contact, select words that have meaning for your listeners

Remember the five "Cs" of communication: clarity, completeness, conciseness, concreteness, and correctness

It's not a co-incidence that the social web or internet 2.0 also functions with these principles at its core.



New Skills for New Jobs

These skills have always been important for personal development, but they are now absolutely critical in our information-based economy. When most workers held jobs in industry, the key skills were knowing a trade, following directions, getting along with others, working hard, and being professional - efficient, prompt, honest, and fair.

To hold information-age jobs though, people also need to think deeply about issues, solve problems creatively, work in teams, communicate clearly in many media, learn ever-changing technologies, and deal with a flood of information. The rapid changes in our world require us to be flexible, to take the initiative and lead when necessary, and to produce something new and useful.

But these thinking skills aren’t just relevant to our careers and jobs. They play a part in making the world a better and more just place for all of us. I think there’s a good argument that the absence of these thought processes within the management of the banking world was the biggest single factor in the financial collapse of 2008. If we ever needed an example of the terrible consequences of endemic groupthink, we need look no further.

So next time you are considering what skills you could acquire to enhance your career prospects, think outside the box and think about what you can do to improve your thinking skills. Not just for yourself but the world as well.

It's now official - The Global Jobs Crisis is real

By Neil Patrick

When I set up this blog, I was convinced that the subtitle – Global Jobs Crisis was appropriate and justified.

But many of my friends online and offline commented that they thought I was being rather apocalyptic. Even sensationalist. After all it does rather fit with the sort of conspiracy theory stuff which abounds in the online media world.

But I stuck with it nonetheless. Not because I wanted to be alarmist or a doom-monger. On the contrary. I wanted to raise awareness of the problem and try to find solutions that would work for people at a personal level.

It was simply the most appropriate tagline I could come up with which described the unfolding situation as I saw it. And with every week that passes I see more evidence that it remains the right subtitle.

So today I was interested to see that two years after I started this blog, none other than the World Bank has issued a report which describes the global jobs crisis in forensic detail.

I’d forgive anyone for not noticing it. It went more or less unremarked upon by the mainstream media. It’s titled in typical government speak and somewhat benignly: “G20 labour markets: outlook, key challenges and policy responses”.

The World Bank, Washington
By Shiny Things [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)] via Wikimedia

Behind the dull bureaucratic title is the starkest confirmation I've yet seen which describes in depressing detail, the true nature of the problem.

The world is facing a global jobs crisis that is killing the chances of reigniting economic growth. Worse there is no magic bullet to solve the problem.

The Study was released at a Group of 20 (G-20) Labor and Employment Ministerial Meeting in Australia in September 2014. The Bank says an extra 600 million jobs need to be created worldwide by 2030 just to cope with the expanding population.

"There's little doubt there is a global jobs crisis," says the World Bank's senior director for jobs, Nigel Twose.

"As this report makes clear, there is a shortage of jobs — and quality jobs.

"And equally disturbingly, we're also seeing wage and income inequality widening within many G-20 countries, although progress has been made in a few emerging economies, like Brazil and South Africa."

He said that overall emerging market economies had done better than advanced G-20 countries in job creation, driven primarily by countries such as China and Brazil, but the outlook was bleak.

"Current projections are dim. Challenging times loom large," said Twose.

Who says something really matters

Local mainstream media is so heavily influenced by national government spin that we cannot take anything that is said at face value. And I do my best to expose the most blatant deceptions about jobs and employment news that I come across.

Which is why this report has to be taken seriously. The World Bank isn’t beyond the influence of key stakeholders with their own agendas. Many have argued that the World Bank which has had an American as its President ever since its creation in 1946, promotes a US based world view.

And I have concerns that the World Bank still clings to a largely discredited view on monetary systems.

But critically, the World Bank isn’t controlled by politicians. And that’s the most important thing in my view. No-one at the World Bank is trying to win votes from citizens. They gain no benefit by telling people that things are better than they really are.


100 million unemployed

The report, compiled with the OECD and International Labor Organization, said more than 100 million people were unemployed in G-20 economies and 447 million were considered "working poor," living on less than US$2 a day.

It said despite a modest economic recovery in 2013-14, global growth was expected to remain below trend with downside risks in the foreseeable future, while weak labor markets were constraining consumption and investment.

The persistent slow growth will continue to dampen employment prospects, it said, and warned that real wages had stagnated across many advanced G-20 nations and even fallen in some.

"There is no magic bullet to solve this jobs crisis, in emerging markets or advanced economies," said Twose.

"We do know we need to create an extra 600 million jobs worldwide by the year 2030 just to cope with the expanding population.

"That requires not just the leadership of ministries of labor but their active collaboration with all other ministries — a whole of government approach cutting across different ministries, and of course the direct and sustained involvement of the private sector."

The Group of 20 leaders have called for each member country to develop growth strategies and employment action plans. They emphasized the need for coordinated and integrated public policies, along with resilient social protection systems, sustainable public finance and well-regulated financial systems.

"Coordinated policies in these areas are seen as the foundation for sustainable, job-creating economic growth," says the report.

So there we have it. The responsibility for solving the problem has been passed to national governments. And they are urged to adopt a cross-departmental approach to solving the problem.

Given the nature of governmental silos and the painfully slow way in which government policies are formulated and implemented, I’m not holding my breath for any big breakthroughs anytime soon.

And sadly the subtitle of this blog seems to be one thing which isn’t about to become redundant for a long while yet.