Britain set to become world leader in unemployment technology

1 April 2016

By Neil Patrick

As technology continues to transform jobs, a new government initiative will virtually eliminate jobs in the Jobs Centre network across the UK.

The flagship programme called ‘Care4Jobs’ will massively reduce staffing in job centres and in some centres eliminate them completely. Touch screens which automatically connect jobseekers’ social media accounts with suitable employers are being used to help people find work faster than was ever possible before. Because employers and jobseekers are now both using social media every day, the scheme was described as being a “no-brainer” by Jeremy Twonkington-Smyth, Under Secretary of Work for State and Pensions. He said:

“Britain has a long and proud history of world-leading innovation in the delivery of public services. We are determined to ensure we remain committed to the vital services we provide for job-seekers and employers. Our pilot study carried out in Grimsby, a northern town I hope I never have to visit, showed that the automated social media connection of employers and job-seekers had an immediate impact on the time taken to locate suitable jobs. This has resulted in a rapid decline in the number of unemployment benefit claimants. Many have already found jobs in Starbucks, McDonalds, Asda and other leading high quality employers who have embraced the digital and social media world. Some claimants have simply vanished completely which is a mystery we have set up a sub-committee to look into. ”

The use of this new technology in Job Centres means that the costs and difficulties of maintaining staffing levels are significantly reduced.

“We inherited a massively bloated and unproductive department from the previous government and have been working hard to rectify this. We have always had problems with staff in job centres. Some take several days off each year claiming to be sick, others take far too long to get their work done.”

Not only does this innovation increase productivity in job centres, it is enabling unemployed people in the UK to become part of the new ‘global gig economy’:

“We want to future proof our services and the use of these televisual screen thingies connected to the world wide interweb, means UK job-seekers can find jobs all over the world. Unemployed people in Britain have amassed many skills much sought after overseas. More than 20 have already secured work in dynamic overseas economies like Brazil, Colombia and Romania.”

Thanks to this innovative new scheme, Barry
 Clunge, 41 from Stockport has already found
 a new job working part-time in sunny Madrid.

The programme to automate job centres has cost £3.4bn and Mr Twonkington-Smyth said this was an excellent investment:

“This technology will establish Britain as a world leader in unemployment. Because technology works so much better than people, we will see both a reduction in unemployment claims and faster hirings. Best of all, the costs the unemployed impose on hard working families will fall dramatically.”

When asked about the forecast 28,000 redundancies in job centres, he was upbeat:

“We sincerely regret that a number of valued colleagues in our job centres can no-longer be paid for their work. Some will choose our community service option, where they can still attend the job centre as usual and work on a voluntary basis. I know many care passionately about helping people find work, and this will enable them to continue with their valuable work and continue to find personal fulfilment.”

“Those who choose not to take up this attractive option thanks to their excellent skills will be much in demand by other employers. Their skills such as working with people with financial, mental, drug and alcohol problems will be much sought after by all sorts of employers from call centres to retail.”

The Think-tank on Work and Technology (TWAT) said, “Our studies have shown that this sort of work is carried out much faster and more reliably by IT systems than people. Our research found that over 70% of employers prefer to use technology to automatically select candidates rather than having people manually review applications. The savings for businesses will be considerable.”

The technology for the programme has been developed by tech entrepreneur, Josh Jones, founder and CEO of Govetech Systems, an innovative IT developer which Josh founded in 2014 with a young entrepreneur grant of £1.2m from the EU Innovation Fund.

He said: “We are delighted with the success of the Care4Jobs platforms. This sort of system has many applications and we are already working on a further system which will enable the armed services to largely avoid the need to deploy troops into conflict zones. Instead they will use a combination of gaming technology and social media to connect with and then invite adversaries to fight them online. It will save billions of government spending on defence and enable the reduction of already overstretched armed forces troops and support staff.”

Josh Jones, 28, dynamic young entrepreneur
and CEO of Govetech Systems

“Enquiries from oversea governments have been coming faster than we ever thought possible. We are already in discussions with government representatives from Greece, Russia and most exciting of all the United States. Excuse me, I have to take this Skype call from my stock-broker.”

The opposition spokesperson on Work and Jobs, Miranda Trellis MP said:

“This is a cruel and uncaring government that is cynically attempting to export unemployment. Thousands of families will be devastated by this move. We are liaising closely with the Union for Technology Workers’ Employment Rights and Policy Unit (UTWERPU) to organise a protest campaign to force the government to rethink this regressive strategy which will bring misery to people already deprived of opportunities. Sorry, I’m late for an equality and human rights committee meeting with JC. Can I go now?”

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?

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

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?

Why the US Middle Class is in danger of extinction

By Neil Patrick

Current news reports claim the US job market is slowly improving. Is this a return to better days? Sadly no. It’s a transformation for sure, but not back to anything like we all knew 10 years or so ago.

Make no mistake about it, America's middle-class jobs have been destroyed in the wake of the 2007-8 financial collapse. The growth in new jobs reported gleefully by the government have been almost entirely low-wage jobs. And there is little reason to believe this situation can be quickly or easily reversed.

What has caused this? In the next few posts, I want to look at the factors that are behind this tragic state of affairs, dig into what’s happening and what we can do about it.

I believe there is no single cause or culprit. Instead it’s a complex cocktail of seven factors which have collided to create a perfect storm for skilled American workers. In brief these are:

• Record levels of government and personal debt 
• The rise of technology leading to ever falling marginal costs 
• Capital shifts away from labour and into non-human investments 
• The globalisation of businesses 
• Government fiscal policies 
• Demographics and education 
• Finite global resources 

But I am getting ahead. In this post, I am going to look at:

• The nature of the alleged jobs “recovery” 
• Why GDP growth isn’t making people better off
• The transference of government debt to households.

The substitution of high paid jobs by low paid jobs is beyond doubt

A recent presentation from the Federal Reserve Bank of San Francisco describes the jobs “recovery” in stark terms. The vast majority of job losses during the recession were in middle-income occupations, and they've largely been replaced by low-wage jobs since 2010:

Mid-wage occupations, made up a staggering 60% of the job losses during the recession. But mid-wage jobs have made up just 22% of the jobs gained during the recovery.

By contrast, low-wage occupations have totally dominated the recovery. They represent 58% of the job gains since 2010. "Many middle-class workers have lost their jobs and, if they have been able to secure new employment at all, find themselves earning far lower wages post-recession," the San Francisco Fed says.

Nearly 40% of the jobs gained since the recovery began - about 1.7 million - have come from three low-wage sectors: food services, retail, and employment services.

And four low-wage occupations are now the top four types of employment in the US: retail sales, cashiers, office clerks, and food preparation and servers:

The problem is compounded by the fact that industries which employ mid-wage earners, such as construction, manufacturing, insurance, real estate and IT, have either stagnated or grown too slowly to recover their pre-recession losses.

Worse again, budget cuts to federal and state government have eliminated a vast swathe of mid- and higher-wage jobs. And a separate chunk of middle-wage jobs including carpenters, plumbers, plasterers and electricians are still waiting for the U.S. housing market to recover.

The growth of wealth inequality is a problem for all, not just the poorest

This is creating a polarised workforce in the United States. Over the past decade, both high- and low-wage jobs have been growing. But jobs in the middle continue to shrink. Mid-wage jobs suffered a major drop after 2001, largely stagnated during the 2000s, and have now declined even further in the most recent downturn.

Economists have been debating the causes of this divergence. Harvard’s Lawrence Katz and Claudia Goldin, argue that new technologies and machines are now displacing mid-wage jobs.

I believe this is a correct analysis as I talked about here. But it’s not the full story. Some others, such as Larry Mishel of the Economic Policy Institute, point to political factors, from the decline of labor unions to trade liberalization to the dwindling minimum wage. This is a factor too, but again it’s only an ingredient in the mix, not the full disastrous recipe.

But neither of these arguments discuss the lead weight which is pulling the whole economy down. And that weight is government debt. That debt puts massive upward pressure on tax, demands endless quantitative easing (devaluation of the dollar to you and me) and limits government spending – the type of spending which would create more jobs in the public sector.

It seems logical to me that there’s no single simple explanation of what’s going on. It’s multi-factorial which makes it complex to understand and remedy both at a national and individual level.

But if the trend continues, it will amplify something which is already a big problem in the United Sates: income inequality. Not to mention the destruction of the hopes and aspirations of a huge swathe of American society. And needless to say, that’s a bad thing…

GDP growth and household incomes have become separated

For the first time in US history, economic growth is no longer driving income improvements at the household level.

Traditionally, improvements in GDP have directly resulted in increased income and prosperity for citizens. In the US, this link has broken. US median household income is now at a lower level than it was in 1999. In fact even though US GDP has been on the rise since 2009, household income has been falling since 2008:

Here we see the evidence of how as technology continues to increase productivity and reduce marginal costs, so we have GDP growth but no wealth creation except for those who are in the boardrooms and/or major equity owners.

To look at it in its simplest terms, businesses can create higher returns with less human labour inputs than ever before. The first industrial revolution substituted human muscle power with mechanical devices. The second industrial revolution transformed transport and communications. And the third industrial revolution is replacing human cognitive tasks with artificial intelligence.

So until recently, technological improvements have only really affected those who sold their manual capacity to earn a living. Today’s technology is reducing the workforce needed for tasks which required the application of professional and mental skills too. But there’s another problem; if we are selling our manual labour, we need to do nothing to create our commodity. Our bodies are there to be applied to work whenever we want. Little or no training is needed.

But jobs requiring the application of skill and knowledge are different. The acquisition of these skills can take years. Sometime decades. And if no-one wants them anymore, we have a stark choice – dump them and start again or try and compete for unskilled work.

So we have an American middle class with skills that fewer and fewer people want or need to pay for. The keys to the acquisition of wealth are no longer the sale of our labour and skill. They are the ownership of income generating assets. And thanks to booming stockmarkets, owning assets has made most of the wealthy even wealthier over the last few years.

This is the reality of the polarisation of America’s workforce. Greater wealth acquisition by those at the top, those who own assets, but falling income levels for everyone else… not just the poorest, but the vast majority of Americans.

Needless to say, this is also a bad thing…

The burden of government debt is being passed to households

Despite multiple deficit-reduction deals during the past three years, the US national debt is projected to swell to 100 percent of the economy by 2038, due primarily to the enormous cost of caring for an aging society.

Whilst WW2 exceeded the current peak of government debt, the end of WW2 and the global restructuring that arose from its ashes is a very different scenario to that we face today. Post 1945 saw the US emerge as the dominant global super power. It’s huge manufacturing capacity, abundant natural resources and global markets created the wealthiest society on the planet:

But post 1980 has seen the failure of that economic model as the production of cheaper goods of equivalent or even higher quality started to materialize in low wage economies.

Making matters worse, tax cuts for the vast majority of Americans were made permanent during last year's fiscal cliff showdown. If the tax cuts had been allowed to expire, projections showed the debt dropping to 52 percent of GDP during the next 25 years.

In effect, huge government debts are being allowed to accumulate unchecked. But sooner or later these debts will be passed to individual citizens rich and poor through the giant levers of fiscal policy.

And you guessed it; this is also a bad thing…

So these three points define the problem: 

• Millions of jobs for skilled workers in the middle income bracket have simply vanished. 
• Economic growth has become of value only to the asset owning classes. 
• Government debt will continue to be passed onto citizens. 

This isn’t a problem which can be solved by the traditional tools of government. If you want to place your faith there, that’s your prerogative and I hope you are right. My take is that we all need to come up with our own personal solution. It might just be the biggest test of our lives…

I’ll be back with more on this soon.

Why qualifications won't guarantee you a job anymore

By Neil Patrick

Research says there's an abundance of skilled technical workers in the US. Employers say they can't find enough people with technical skills...so who's right?

Last week I was sent a report by a friend. It was a lengthy research piece which reported an oversupply of STEM (science, technical, engineering and maths) qualified workers in the US.

Since he’s an engineer who’s been engaged in a very lengthy job search, he couldn't square this report with the constant allegations from employers that they can’t find the right people with the right technical skills. He thought something didn’t add up. And I agreed with him.

The findings in the report were consistent with other examinations of the STEM labor market. These found no evidence of a general shortage of STEM workers. (That’s because they weren’t looking at the right things as I’ll explain shortly).

STEM jobs remain scarce not workers

In 2012, in the US, there were more than twice as many people with STEM degrees (immigrant and native) as there were STEM jobs — 5.3 million STEM jobs vs. 12.1 million with STEM degrees. And only one-third of US natives with a STEM degree that hold a job do so in a STEM occupation.

Further, one-third of STEM workers do not have a STEM degree, suggesting that absence of a STEM qualification isn’t an insurmountable obstacle to many jobs in the sector.

Perhaps most tellingly, real wages for almost all categories of STEM workers have shown almost no growth for more than a decade. None of this is consistent with the idea that STEM workers are in short supply.

So why are employers reporting the opposite?

At the root of the problem is the fact that the researchers were academics. In other words, out of touch with the real world. In fact it was quite possible, they’d never even set foot in it, such is the way that universities often hermetically seal their research people away from business and industry.

So where’s the error?

The researchers had used the number of people holding STEM degrees as their prime metric to measure the total available workforce of techies, and on this basis they concluded that the supply was ample to meet the needs of employers.

Here’s why that’s a mistake…

Employers do not view educational qualifications as their key measure of suitability for employment. It’s a hygene factor. It qualifies you for consideration, not for hiring. So it’s perfectly possible for employers to say they have a skills shortage because educational qualifications alone do not make candidates automatically employable. They also require (rightly or wrongly) evidence of relevant previous work experience and personality fit.

Introducing the latest bubble…it’s higher education

We all know that the recession means that business growth has been in short supply over the last 5 or 6 years. Meanwhile the educational fat cats have continued to happily make money by churning out people with qualifications, even though suitable jobs have been too scarce to allow sufficient numbers to gain relevant work experience.

It’s a pipe, connected to a tap – the tap has been left turned on and the pipe has contracted (at least for the past few years), resulting in an inevitable blockage.

Source: ONS

The higher education sector has become big business. And like all big businesses, it’s hungry for constant growth. As the graph above shows, the proportion of graduates in the UK population has more than doubled since 1992.

The educational ‘export’ market has been a particularly lucrative business as the aspirational middle classes have massively expanded in the far east economies. Every time I set foot in a UK higher education institution, the place is packed with overseas students.

This bubble  is unsustainable...

My good friend and bubble expert Jesse Colombo has done a great deal of forensic work examining the education bubble in the US. I’ll just quote a little of his analysis here:

Even more alarming than the rate of tuition growth is the blistering increase in total outstanding student loans, which grew 511% since 1999 to $1 trillion (surpassing total credit card debt for the first time), with today’s average student graduating with 50% more student debt than graduates in 2001.

Student loans made by the federal government rose a white-hot 31.9 percent in the 12 months through November 2011. Even Moody’s is warning that student loans may be the next financial bubble to burst, while a recent FICO survey shows that two-thirds of bank risk managers are seriously concerned about the student debt loads held by students in the country.

For more of Jesse’s detailed analysis of this topic just follow this link.

When I went to university here in the UK in 1981, well under 15% of my peers did the same. And the state paid for it by means of a modest, means-tested grant with a contribution from my parents (thanks Mum and Dad) which I had to supplement by working at (instead of drinking at) a bar.

Back then, universities were not businesses. For better or worse they were state institutions. And they acted like it…they were slow to change and whilst they could spell "innovative financial leverage", they didn't really practice it.

But that was all set to change when government decided that it was a good idea (i.e. vote winning) to proclaim that university education was elitist and it was socially just to get more young people from less privileged backgrounds into the university system. It also appeared to be a handy way to reduce the growing numbers of the young unskilled unemployed. Instead of a glut of young people signing on for state benefits as soon as they left school, this would create a new generation of educated and aspirational young people, eager to take the economy to hew heights. Except this had to be paid for by them signing up to government debt, using what I can only describe as career mortgages.

The trouble is that whilst I agree with its egalitarian principles, this vision missed the vital recognition that this expanded output from the education system needed to dovetail precisely with the ever evolving needs of business and industry.

And that's where everything went horribly and tragically wrong.

So do we have a more employable population? Not quite. While the elite universities have expanded only modestly, protected their brand value and retained their high quality standards, there’s been an absolute explosion of less selective, lower quality degree courses made available to almost anyone who is willing to pay for them.

Young and old alike are both losers in this game. Oversupply of university educated people has created a glut of unsatisfied aspirations and debt for the young, and done little to provide businesses with the skills they seek in their workforces.

For the mature and experienced, it’s seen the perception of the value of their years of accumulated know how crumble in the eyes of employers who place the highest value on the most recent qualifications (provided this is backed up with recent and relevant experience).

Oh and of course the UK and US governments have also burdened each and every one of us with another massive government debt that will sooner or later have to be written off or bailed out...

Why "The Unemployed Need Not Apply" Need Not Apply to You

     

By Neil Patrick

Abby Kohut is rather special. Packing up home and commencing a nationwide tour in an RV in 2009, she has embarked on a one woman crusade to teach better job hunting skills to one million people across the US!

Abby Kohut

Her books "Absolutely Abby's 101 Job Search Secrets" and "Absolutely Abby's Top 12 Interview Questions Exposed" reveal the secrets about the job search process that other recruiters won't tell you.

She was a highly successful recruitment director for many years and knows exactly how and why employers hire the people they do. But more than that, she has seen how social media and the internet has revolutionised the skills people need to find jobs in this tough job market. Despite the recession, jobs are still out there, but we need a whole new skill set to find them and get hired.

I completely share Abby’s opinion that the old ways of finding jobs just don’t work anymore. And if the last time you had to find a job was more than two or three years ago, the methods you used then won’t work now.

Like it or not, social media has transformed the processes used by recruiters and hiring organisations and this means we need a whole new set of skills and strategies to get hired.

Abby has presented to over 200 groups and was recently interviewed on Fox News Live, ABC's Good Morning Connecticut, WKTU-FM, WOR-AM, WDVR-FM, and the Joe Franklin show on Bloomberg Radio. Abby was selected as one of the top 100 influential people online according to Fast Company Magazine and was named as one of "The Monster 11 for 2011: Career Experts Who Can Help Your Job Search".

Here’s a recent radio interview in which Abby shares some valuable tips and advice on how you can make best use of social media to help your job search.






I hooked up with Abby several weeks back now and we agreed that since our beliefs were so aligned we should collaborate in our shared mission to help job seekers.

And today, this is my first guest post from Abby. Abby’s post contains some wise words about how we can (and absolutely should) confront the widespread practice of recruiters of excluding job applicants who are currently unemployed. It’s more than simply unfair, it’s a counterproductive practice by employers and damaging to their organisations' reputations in my view.

Moreover, if you are a hiring organisation and you only hire people who are currently employed, I hope this post makes you reconsider if it really makes sense to deliberately exclude candidates just because they happen to be currently unemployed?

Here’s Abby:



By Abby Kohut

Anyone who is currently searching for a job has probably read at least one article about a company who is unwilling to hire "the unemployed." Even more interesting is the article that I recently came across about the backlash from critics against job boards like Monster saying that ads of this kind should be banned from being posted.

As much as it would seem that encouraging job boards to remove these ads might seem like a solution, the better solution is to educate these companies from the top down on why "unemployed" candidates must be evaluated in the same pool as employed candidates. After all, even if all the job boards ban these ads, these companies can still make their own poor decisions during the hiring process.

First, let’s review some of the common reasons why people become unemployed in the first place, shall we?

Stay at home parents or caregivers returning to work – these are typically people who have made a conscious effort to be unemployed. Anyone who has ever fallen into this category realizes that their apparent "unemployment" gap was potentially more challenging than any previous job.

Those who were laid off – these are people whose departments were completely eliminated, whose companies were acquired or simply whose companies were poorly funded. Their lay off had nothing to with their performance and they come equipped with references to prove that. Some of these people were fortunate enough to receive a severance package and decided to enjoy life for a while and live off their severance. Life is precious and sometimes it’s hard to really enjoy it while you are tethered to a demanding job. Can you really blame them?

The terminated – these people are the ones who were let go for poor performance or for personality conflicts and have the most difficult time finding work. Even the unemployed in this group deserve to have an opportunity to contribute, especially if the termination was due to a poor fit between an individual and the job or corporate culture, or clashing management styles.

You – if you currently have a job, imagine for a moment that tomorrow you are informed that your job has been eliminated. Aren’t you a good performer today? A viable member of the work force who deserves to find another opportunity to contribute to society? Does that fact change tomorrow when you get your pick slip?

It is absurd to simply eliminate "unemployed" candidates without understanding why they are unemployed. Unemployment is simply a state that people pass through from one job to another. It is a natural part of life as is "unmarriage." When people get divorced, they don't simply get remarried the next day. They are "unmarried" until they are remarried. Similarly, people who are unemployed are simply between opportunities. For example, how can we as a country possibly expect people at the VP level to find a job within a week, especially if their company’s closing came as a complete shock to them? Most people "forget" to keep networking once they are happily employed so when their company closes, they truly are starting from scratch. Besides, how many VP jobs in their specific industry are out there, not to mention vacant?

Job Seekers In-Transition: If you come across a job ad for a company who is disqualifying the "unemployed", and you actually still want to work for them, here’s what you can do... First, don’t be discouraged - most things that show up in ads and seem like "requirements" have wiggle room for exceptions. In fact, you’ve experienced this many times before. How many times have you seen a requirement on the job posting that you do not have? Has that ever stopped you? OF COURSE NOT!!! Your job is to find the hiring manager or the Department VP or the CEO and to settle the score on why you are the best person for the job. Consider this strategy:



Dear President of RudeRUs, Inc.

I recently discovered an ad for your open "WorkAlot" position on Monster and wanted to introduce myself to you as an ideal candidate. For the past 10 years I was a "WorkAlot" in a similar company who received outstanding performance reviews from all of my supervisors. I have attached a list of references on the following page which I invite you to call. They will tell you that I was a top performer who received recognition year after year for saving the company billions of dollars. My position was eliminated when my employer was acquired. Our doors closed about a year ago today.

You may wonder why I am writing to you instead of applying to your HR department. It's simply because the ad posted by your hiring manager or HR department states that the "unemployed need not apply". Based on my research about your company and your successful career history, it seems like the decision to include this hiring stereotype in your company’s ad could not have been yours, so I wanted to be sure that you could personally make the decision on whether my background would be suitable for your company.

I look forward to having the opportunity to learn more about the position and to eventually joining your company as a "WorkAlot."



Sincerely yours,

John DoesntTakeNoForAnAnswer Doe



For much more about Abby and her amazing work, please visit her website here:

http://www.absolutelyabby.com/home.html

Has the economic crisis changed the class structure?

By Neil Patrick

Which class do you think you belong to? The traditional 20th century view was you were either upper class, middle class or working class. The NRS social grade system defined five classes, largely based on based on income and occupation, which went like this:

A Upper middle class: Higher managerial, administrative or professional

B Middle class: Intermediate managerial, administrative or professional

C1 Lower middle class: Supervisory or clerical and junior managerial, administrative or professional

C2 Skilled working class: Skilled manual workers

D Working class: Semi and unskilled manual workers

E Non working: Casual or lowest grade workers, pensioners, and others who depend on the welfare state for their income, this also includes students.

More recently, Mike Savage from the London School of Economics and Fiona Devine from the University of Manchester carried out The Great British Class Survey. Their results identified a new model of class with seven classes ranging from the ‘Elite’ at the top to a 'Precariat' at the bottom, reported the BBC here.

They devised a new way of measuring class, which doesn't define class just by the job that you do, but by the different kinds of economic, cultural and social resources or 'capitals' that you have.

They asked people about their income, the value of their home and savings, which together they call 'economic capital', their cultural interests and activities, known as 'cultural capital' and the number and status of people they know, which is called 'social capital'.

160,000 people completed the survey.

The full class survey was based on a theory developed by Pierre Bourdieu in 1984. This looked at a person's cultural and social life as well as their economic standing.

So what are these new seven classes?

Elite: This is the most privileged class who have high levels of all three capitals. Their high amount of economic capital sets them apart from everyone else.

Established Middle Class: Members of this class have high levels of all three capitals although not as high as the Elite. They are a gregarious and culturally engaged class.

Technical Middle Class: This is a new, small class with high economic capital but seem less culturally engaged. They have relatively few social contacts and so are less socially engaged.

New Affluent Workers: This class has medium levels of economic capital and higher levels of cultural and social capital. They are a young and active group.

Emergent Service Workers: This new class has low economic capital but has high levels of 'emerging' cultural capital and high social capital. This group are young and often found in urban areas.

Traditional Working Class: This class scores low on all forms of the three capitals although they are not the poorest group. The average age of this class is older than the others.

Precariat: This is the most deprived class of all with low levels of economic, cultural and social capital. The everyday lives of members of this class are precarious.

I think from a scientific and social research perspective, these findings make sense. But the findings concern me for several reasons.

First, the elite is quantified as 6%. And the ‘precariat’ is apparently 15%. So for every person who is enjoying a life of luxury and comfort, there are 2.5 people who aren’t really ‘living’ at all. Can we really consider that our society is a success with numbers like that?

Wealth inequality in Britain is continuing to grow at a frightening rate. A study entitled "Divided we Stand: Why Inequality Keeps Rising” by the Organisation for Economic Co-operation and Development (OECD) reported its conclusions on the causes, consequences and policy implications for the ongoing intensification of the extremes of wealth and poverty across its 22 member nations.

Income inequality in OECD countries is at its highest level for the past half century. The average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25 years ago.

Since 2008 and the start of the recession, in the United States, inequality has increased further from already high levels. Other traditionally more egalitarian countries, such as Germany, Denmark and Sweden, have also seen the gap between rich and poor expand from 5 to 1 in the 1980s, to 6 to 1 today.

It’s my contention that the argument that having a wealthy elite inspires others to work harder and greater aspiration falls apart when we have a prolonged period of recession and job opportunities become scarcer. This leads to discontent and social exclusion, especially amongst the young.

But to return to the point about social class, I percieve a different structure of the working age population based on the day to day lives of people we see around us every day:

1. The media magnet. Whether you are a TV personality, a music or sports star, a politician, even a high profile professional, you are in the public eye. Fame whether deserved or not is the principal asset of this class. Perhaps when we hear kids say, ‘When I grow up, I want to be famous’, maybe isn’t such a dumb thing after all? Fame is an asset that delivers long term value often even in situations where a person’s real work dries up for whatever reason. There’s always, ‘I’m a Celebrity Get me Out of Here’ to turn a few weeks minor discomfort into a major stipend and restore your flagging profile…

2. The new working class. These are the people that do all the real work, what’s left of it that is. Whether they are a surgeon or a shelf stacker, a consultant or a call centre worker, their lives are so crammed with work that they continually feel stressed, exhausted and trapped. Their assets are dwindling thanks to stagnant or falling pay, spiralling costs of living and depleted pension funds. Their only hope is to cling to the job ladder until they retire at 85, or whatever age the austerity measures dictate.

3. The educated under-employed. These are the people who have fallen out of the new working class and been unable to find enough work to maintain the life they used to take for granted. Many are professionals who simply cannot find a way back onto the ladder they fell off usually through no fault of their own. They include a sub-class I call the ‘self-unemployed’ – people that are trying to earn money through their own enterprises, but are really struggling to get anywhere and make any significant amounts of money. Many are pinning their hopes on an economic miracle that creates well-paid professional jobs in the economy, instead of yet more low-skill jobs working for global corporations for pin money.

4. The under-educated and unemployed. These are the biggest victims of all. Vilified by the media thanks to the desperate and/or selfish behaviour of a minority that exploit the welfare benefits system, they have the worst possible outlook. Even if a jobs miracle happens, they will be the very last to benefit as the economy soaks up those with higher skills and qualifications first. For more and more of them, increasing amounts of criminality to scratch an existence and regular anaesthetic through drugs and alcohol, provides a temporary stupor of comfort.

To my mind, this is the real structure of society in the West today. Apart from the media magnets, everyone else is suffering if not financially, then at least in terms of their quality of life. It’s the outcome of failed leadership and an economic model that doesn’t work anymore.

We need new visions, better ideas, more competent leaders and we need them fast.


See the original BBC article here: http://www.bbc.co.uk/science/0/21970879

Detroit: a vision of the future?

By Neil Patrick

Not many people know that in the 1950’s Detroit was the fourth largest city in the US.

But almost everyone knows that the city is now bankrupt.

The mainstream media is focused on the crazy legal merry go round that has ensued in the wake of this collapse.

But a city is not really an entity on its own, although bureaucrats may find it more convenient to organize it that way. A city is the sum of all the people and lives it contains. And in the case of Detroit, these lives have been wrecked in varying degrees, not only directly by the bankruptcy, but also by the massive collapse of the government services which resulted from it.

I wonder if in the late 20th century, we had presented people with the reality of the condition of Detroit today, anyone would have taken it seriously? I rather suspect that the majority view would be something like, ‘Oh, that could never happen here’.

But it has and to my mind it presents a terrifying premonition of what the future might look like for many other cities in the US and other western countries. The UK already has what I would call it’s own ‘mini-Detroits’.

The bottom line is that if you worked or are working for any Detroit public organisation, you are unlikely to ever see more than a tiny fraction of your pension rights actually materialize.

But this isn’t just an issue in Detroit.

You may be surprised to discover that 61 other cities in the US have a gap of more than $217bn in unfunded pension liabilities. That's right $217 billion!

And I’d like someone to tell us where that money is going to be found.

You might be tempted to think along the lines of, ‘Oh yes , my city is different, because…’ (add your excuse(s) of choice here). But is it really? Really?

The collapse of Detroit is multi-faceted. Of course it all began with the decline in the fortunes of the US car manufacturing giants based there. And there was corruption, and racial tensions, and a vicious circle of increasing government spending to try and prop things up, delivering worse and worse results, leading to yet more spending. And an exodus of the middle classes, in other words, the ones who contributed the biggest slice of the revenues that government uses to pay for things.

What can we do to protect ourselves from this type of risk to our lives? Well there are three groups of people who are not only unscathed, they are actually doing rather well in Detroit right now.

That’s urban redevelopment bosses, politicians. And lawyers.

Choose your poison.

And if you’re not scared enough already, just watch this to see the full HD version of a really scary movie about the tragedy of Detroit courtesy of Stefan Molyneux at Freedomainradio.com

UK: Why falling unemployment numbers are a mirage

By Neil Patrick

Well, it’s Saturday again. On this day every week, I tend to draw breath after the week’s activities, fill myself with coffee and reflect on the week’s news and developments.

Naturally enough, employment news is high on my list of topics to digest. And today is no different. Except that today, I have good news to report…well sort of.

In the UK, we are being told that we’re experiencing falling unemployment and that this is a sign of an improving economy.

Unemployment peaked at around 8.5% at the end of 2011 going into 2012. It’s now around 7.7% based on the current 3 month rolling average, or just 7.1% if you look at the latest monthly figure. So it’s showing a steady fall, perhaps even speeding towards the ‘target’ of 7.0%.

Why do I say that 7.0% is a target? Because that, said new Bank of England governor, Mark Carney, in his ‘forward guidance’ in August, is the level at which the BoE will start to increase interest rates.

Merryn Somerset-Webb, Editor in Chief of MoneyWeek described this as, ‘A dim-witted policy based on a number no-one understands’. Quite.

Carney also said he expected the UK to reach this position sometime around 2016! So we are doing great - we’re already miles ahead of where the Bank of England thought we’d be. Erm…not quite.

This figure of 7% is not some sort of magical threshold at which suddenly the recession becomes history and we all return to some sort of financial nirvana. Far from it.

If the current trend continues, we’ll be at 7% sometime around the middle of 2014. And fully unprepared to bear the even greater cost of living increases this will bring, on top of the ones which have crushed most people’s spending power over the last five years.

But as I have talked about elsewhere on this blog, raw unemployment numbers do not tell the story of what is really happening. And achieving the figure of 7% means absolutely nothing.

We know that huge numbers of people - around two million - are currently under-employed, i.e. they are working, but not earning as much as they need or want to. But they are not unemployed as such, so they are not counted.

Many more have simply given up looking for work and disappeared off the radar all together. These are not counted either.

Meanwhile, hundreds of thousands of young people have decided to avoid leaving the ‘womb’ and have stayed within the education system, hoping that during their delay, the job market will improve and give them the win-win of higher qualifications and an improved jobs market. Yep you guessed it - another artificial diminution of the unemployment total.

Just about everyone who could afford to take and has been lucky enough to be offered any sort of early retirement package (senior public sector executives for the most part – no comment) has understandably jumped at the chance. So off they go too!

Once we factor in these aspects, you can see why the raw unemployment number is virtually meaningless as an indicator of the financial well-being of the nation.

Which would be okay if it were not being used by the BoE as a barometer to judge when we are all able to afford higher interest rates on our mortgages and higher inflation in the already massively overinflated and over-taxed costs of essentials like power, transport and food.

Meanwhile, these figures have caused a good deal of self-congratulation in government circles. The government knows just as well as you and I that these numbers are an illusion. But they are gambling on the belief that most of the electorate won’t spot the ruse.

And I fear their assessment about this may well be correct. Most people I think will not be interested in looking behind the numbers to see what is really happening and this blind spot will mean that many will be more inclined to accept the idea that the economy really is improving.

I’m sorry to say it’s just not true. It’s simply more lies and corrupted statistics.

The invisible threat to all our futures

By Neil Patrick

I started this blog because I am convinced we babyboomers are in a period of unprecedented danger. And not only us, those that depend on us too. Like our kids. And our parents. And because no-one seemed to have any idea what to do about it.

Just about everything we grew up believing about jobs and careers and how our lives would unfold has been swept away in a perfect storm of recession, global economic power shifts, financial crisis, government failure and transformation of the workplace.

Our education in the 1960’s and 70’s was a reflection of a different world. This was a world in which the US and the western economies still held sway. And the education system was geared to providing a workforce which fed that economic machine with the human labour and skills it needed.

Only scraps remain of that world. Just look at Detroit and any other examples of the old world which are now little more than derelict monuments to a bygone era.

As a group, we are extremely poorly equipped to respond to changes of this magnitude. If you have a job, you may consider that all this is irrelevant to you. You may consider yourself lucky. In some ways you are. But do you genuinely believe you will still have a job in five or ten years’ time?

Whatever your answer to the question, the fact is you are almost certainly going to need one.

Today, we have governments that still do not accept that this collapse is irreversible. They cling to electoral manifestos which regardless of policy or position on the political spectrum, argue that their policies are the right ones to restore the situation to something resembling what we all grew up in.

Well, I believe that’s all hogwash. It is never coming back.

The reason politicians tell us that they know what to do to restore the old world order, is simply because saying anything else would make them unelectable.

Moreover, there is a cosy alliance in place between government and big business which maintains a status quo and is a perfect mechanism for protecting the personal interests of the political and business elites.

We are actually partly to blame for this. We abdicated our responsibilities wholesale to our governments many years ago. We put our faith and trust in them. You want education for your kids? Fine we’ll provide that. You want defence against real or imagined enemies? Fine, we’ll protect you. You want doctors and hospitals? No problem. Free education for your kids? Check. You want care for the elderly, and roads and railways and waste removal and a justice system and food hygene and pensions? Don’t worry, we give you all of these. The list is endless.

And that’s the problem. Because every government has attempted to provide all these things to ensure it retains or attains power, we have asked for and they have accepted a magnitude of tasks which they are almost bound to fail to deliver. Not only that, we have to pay for it.

So on the one hand we have an almost endless and growing list of government service obligations to citizens. On the other, we have to figure out how we can pay for this. And yup, you’ve guessed it. We can’t. The money (or more specifically, the credit) has run out. You can only borrow and tax so much before you reach breaking point.

And if your economy isn’t growing, your tax receipts are falling. But you’ve still got to pay for all those promises you made to the electorate.

That’s why the promise has become impossible for governments to keep. The promise was predicated on the belief that western business and economic growth could continue to outpace the rest of the world.

Western governments have dug themselves so deeply into debt that no amount of economic improvement will get us back to where we all want to be.

Yesterday I was sent a viewpoint from someone who I won’t name, but who has had many dealings with the political elites, which I think sums up perfectly the hidden nature of the forces at work in government – and underpins my belief of one of the key reasons we cannot expect to see significant change if we look to politicians (of ANY party) to be our saviours.

The tone is heavily ironic and talks about the UK system, but is broadly relevant to the governments of all western economies, so read with that in mind.

Why do we need a new political philosophy when we already have a perfectly good one? The trouble is that people don’t understand it so let me explain.

We have a democracy. This means that we choose from among a small cadre of hereditary leaders who select a head from amongst themselves. They are in a unique position to do this: they have been trained from secondary school (usually but not only Eton) to understand their entitlement. They are then trained at university (usually Oxford or Cambridge) how to exercise it, for the most part on Politics, Philosophy and Economics (PPE) courses.

They understand as none of the rest of us do that political leadership has nothing to do with purpose other than itself and nothing to do with us. They are not interested and, more to the point, experience has taught them that for a relatively small outlay in highly skilled lying we can be conned into anything. And if the worst comes to the worse they can find scapegoats for us to blame for any consequences that fall upon us. The workshy are blamed for unemployment, the homeless for shortage of housing, the poor for poverty, immigrants for almost everything.

They are pragmatists above all. They recognise that real power in the world lies with money and globally organised money in particular. So they look after the interests of “business” which really means very big business and finance. In return business looks after them. The price is very high: the lies with which to justify the upward distribution of power and wealth become increasingly transparent but it is not a real problem. We must after all select from among their number if we can be bothered to engage in the process at all.

So there you have it. A perfect system already exists. To oppose it creates the danger of instability which makes you a terrorist. Relax and enjoy.

You may think that what I have said so far is unduly cynical and pessimistic nonsense. You may even think it smacks of paranoia. After all I have presented no facts to support my opinion. Worse I have presented no practical alternative. Without facts and a real alternative, how plausible is my argument?

Those criticisms are all fair and reasonable. And that’s why I’ll be returning with more on this topic over the coming weeks.

For now though, I’ll just leave you with this question. Do you sincerely believe your government, or its opponents, really have a realistic chance of delivering anything resembling the sort of lifestyle we all grew up expecting over the next 20-40 years?

New Zealand: Ageism is alive and kicking

By Raewyn Court

Ageism on the job and not enough cash to retire ... it's tough being a working senior

If you're in your golden years and don't think you have enough money saved for a comfortable retirement, you're in good company.

A study by recruitment firm OCG Consulting says only 6 per cent of New Zealand workers aged over 50 have sufficient savings for "financial security" and a "good lifestyle" in retirement.

OCG's report, Coming of Age: the impact of an ageing workforce on New Zealand business, shows the desperate financial situation of many older workers, as well as widespread workplace age discrimination.

The survey of 864 job-seekers and 56 senior business people highlights that by 2031, one million people will be of retirement age, yet six out of 10 workers over 50 today say their retirement savings are insufficient.

OCG chief executive George Brooks says the combination of financial necessity and frequent ageism is leading the country towards a socio-economic crisis as a generation of baby boomers prepare to retire.

"This is a human issue, a business issue and an economic issue," he says.

"It's not enough to say the market will sort it out because our analysis shows the market isn't, and these grim statistics need to be addressed."

The report shows that during the past five years, about 60 per cent of job seekers have seen or experienced age discrimination, including reduced access to promotion, less interesting jobs, lower remuneration and reduced training opportunities.

Brooks says that while similar surveys have shown a degree of discrimination, reports from employers and employees show ageism is more prevalent than realised.

Although close to half of employers agree that older workers are a largely untapped resource, few have strategies for ageing workforce participation.

Brooks says there needs to be a wider appreciation of the value older workers bring to businesses, including knowledge, experience, productivity and ability to handle a crisis.

"Financial need, coupled with ageism, is a very real economic, political and social problem," he says.

"It is individual firms and the workers they employ who make the decision to hire or not to hire an older worker. Solving this problem requires leadership and cultural change."

One company that rejects age discrimination is international beverages company, Frucor New Zealand.

"The age of an applicant, like their gender, is irrelevant," says managing director Mark Callaghan.

"By way of example, we have recently built a new distribution centre and wanted to improve the level of shift leaders.

"We made three hires - a man in his late 30s, a woman in her early 30s and a man in his 50s. What they had in common is that they were the best individuals for the job."

Callaghan believes there are many positive factors in employing an older person, such as experience, maturity, life balance and stability, as well as stickability.

"More mature workers tend to want to build a career with the organisation they are in. That is something we encourage at Frucor."

Half the senior employers surveyed in the OCG report cited negative factors in hiring an older person, including cost, lack of adaptability, health issues, IT illiteracy and lack of ambition.

Callaghan says these factors would be a concern - or at least things to consider - when hiring anyone, irrespective of their age.

"Lack of adaptability is not something that is exclusive to older people. Again, what is most important is the individual and their attitude."

This post originally appeared here:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11148248

Why employers think job seekers are overconfident in their abilities

By J.T. O'Donnell 

'Get a mentor, you need it,' say hiring managers

The third annual Job Preparedness Indicator (JPI) spotlights differences in each group's view of the skills employees need to thrive in the workforce.

Some 72 percent of job seekers are confident they know how to present their skills and experience to an interviewer and more than half of job seekers (56 percent) are confident they know what employers are looking for in candidates today. Yet, only 15 percent of hiring managers say nearly all or most job seekers have the skills and traits their companies are looking for in candidates.

Employers to Job Seekers: "Get a Mentor, You Need It"

These gaps, along with the sense of self-confidence reported by job seekers may explain why many candidates have not taken steps to gain employment that hiring managers consider essential: 74 percent of hiring managers say job seekers should have a mentor, counselor or job coach to talk to about whether their skills and experience match those required for the jobs they are interested in yet, only 40 percent of job seekers report having a similar professional resource.

In fact, the proportion of job seekers who would rely on their own experience to decide what information to include on applications, resumes and cover letters rather than seek advice from others including career counsellors or instructors has grown from 58 percent in 2012 to 67 percent in 2013.

"Job seekers are doing themselves a huge disservice by ignoring the wealth of guidance and insight a mentor could provide," said Madeleine Slutsky, chairman of the Career Advisory Board and vice president of career services at DeVry University. "Cultivating relationships with individuals who have experience with the current employment landscape can be a tremendous help in the job search process."

Job Seekers Talking Trash = Denial There's a Problem

I have definitely seen evidence to support this study's findings around overconfident job seekers. Just take a look at some of the comments frustrated job seekers leave on articles dismissing the career advice being shared and you'll see that many think they know what they are doing. Yet, are they getting results? The answer is most likely "no" if they are reading the article in the first place.

The sad part is, while I don't mind sharing with people what is holding them back from getting the job (i.e. here are 10 things recruiters won't tell you, but I will), employers don't see it as their job to give you feedback like that. So, if you aren't figuring it out on your own, you could struggle to find work for a really long time.

Smart, Successful Professionals Know When to Seek Help

Getting help doesn't mean something is wrong with you. In fact, when you choose to get a coach or mentor, it shows you are investing in improving yourself. Pro athletes and C-suite executives all have coaches as a way to be at the top of their game. Why shouldn't you?

Given the study shows most job seekers think they know what they are doing when it comes to job search, these tips might fall on deaf ears. But, if you've been out of work for more than three months, you might want to have a heart-to-heart with yourself and consider the following:

1) You are a business-of-one that must actively sell your services. Don't get mad at the customer (a.k.a. employer) because they don't see your value. It's your job to build up your marketing skills and find a way to prove you are the right candidate for the job.

2) Applying online to every job you think you could do is a colossal waste of time. It’s also the lazy way to approach job search. 8 out of 10 times, your application is being tossed by the applicant tracking system. It's time to step up the efforts and learn to conduct a proactive job search.

3) Learn new, different techniques for writing cover letters. It's time to ditch the formal, outdated cover letter and learn how to write one that gets the attention of hiring managers. Otherwise, you are just wasting time because a boring, common cover letter doesn't get read.

4) Study up on social media and how to use it to connect with employers. Not only does it show you are tech-savvy, it is also where the recruiters are searching for top talent. If you aren't leveraging Linkedin and Twitter in your job search, you are missing out on a huge opportunity to tap into the hidden job market.

5) Make sure your resume doesn't read like an over-the-top infomercial. You've only got six seconds to capture the attention of a recruiter. Make the most of the top-fold of your resume. Stick to the facts and avoid subjective text that makes your resume feel over-stated.

6) Accept that you must network to get work. There is no way around it. You will have to do some form of networking if you want to land a job. These days, it's not who you know, it's who knows you. If you aren't having meaningful conversations with people in your industry, you won't be able to establish your credibility and get people to refer you to jobs. 80%+ of all jobs gotten today are done so via referral. If you are petrified of networking, you really need to get help. This isn't something that will fix itself. Mentors and coaches can be a huge support in this area.

Now, if you are reading these tips and saying, "I've done all that!" Then, you've got even more reason to consider getting professional help. Here's why...

There is a wise saying, "When the student is ready, the teacher appears."

It might be time to recognize you need to become a student and find your teacher. Don't let your pride get in the way of your success. The sooner you get help, the faster you can find new ways to connect with employers and land a job. The best part about coaches and mentors is they'll teach you skills you can use for a lifetime. And, since every job is temporary, getting up-to-speed on the best job search techniques will come in handy in the future.

This post originally appeared here:

http://jobs.aol.com/articles/2013/10/29/new-study-job-seekers-overconfident-in-their-abilities