Wednesday, May 23, 2012

Internships in Work's New Age

Good evening! 

In this past Sunday's New York Times, there was a fine Sunday Dialogue article, The Value of Internships.  It can be viewed at .

The Sunday Dialogue is an op-ed section feature which starts with a letter taking a stand on an issue, followed by several responses, then by comments on them by the original writer.  Three days ago, Ilene Starger of Brooklyn made the points that internships, unpaid or not, are invaluable in many fields for learning a business, are still good, and have often been the beginnings of successful careers.  The commenters either agreed with Starger, or claimed that internships, beneficial or not, violated minimum wage laws, were ways of offloading menial work to someone unpaid, and were, as one put it, "bad for the worker, bad for the employer and bad for society."    Starger responded to these issues and more, yet one critical point went completely unmentioned.

Why have there been internships?  In many fields, such as the show-business-related ones mentioned in the article, they have historically been good for both worker and company.   Those starting out in a field gained opportunities to not only learn a great deal about the business, but to gain a credential, that of a job in the field held and successfully completed.  Employers would get someone likely eager, cooperative, enthusiastic, and unpaid or low paid - though the article considers internships as completely uncompensated, many over the years have included stipends, food, housing, or even minimum-wage level money - and offers them an in-depth look at a candidate for a permanent, substantially paying position.  Allowing skirting of minimum wage laws could actually provide much more opportunity for interns to learn in settings where would need to put in significant time but little true labor, such as staying all day at a theater where a play would be performed.  Business radio host Bruce Williams, when a caller said they wanted badly to go into a business which they did not know, would recommend that such a person approach someone owning such a venture and offer to be "their slave" for two months, if they could learn all about how the business really worked.  I don't remember him using the word, but that would be nothing, really, more than a rather intense internship.  How else to get a job without experience or experience without a job?  So, with applicants generally outnumbering positions, and results often superb, internships, even unpaid, seem like winners.

However, Work's New Age has changed this picture.  The businesses themselves need to do more than teach to keep up their end of the bargain - they need jobs after the internship to be reasonably available.  That, often, is no longer the case.    Williams' advice was fine for self-employment propositions, where what an owner knows goes directly to their personal bottom line, but anyone who suffered through the 1980s job-seeking fad of "information interviews" (in which people made arrangements to visit workplaces and learn about them, ostensibly just for general knowledge, but both they and their hosts knew what they really wanted was a job offer), knows that the credential and the job offer are vastly more important. 

Accordingly, interns have had a fully justified expectation that, unlike some courses of college study, their unpaid or low-paid work at a for-profit business has a good chance of getting them a "real" job later.   Interns must have true opportunity - if they do not, due either to too many of them or too few permanent positions, the de facto contract is broken, and internships should not be offered without heavy disclaimers. 

That, not violations of minimum wage or other labor law, which workers would with real chances suffer happily, is the problem with internships today.   Employers of interns must be fully responsible for how their charges, as a group, fare afterwards, and if it is not well, then - and only then - they must fully comply with all labor laws. 

For each former intern who started a good career in the field, but felt exploited at the beginning to the point where if they could do it over again they wouldn't, there are now dozens who felt abused only when they could not catch on in the field.  And THAT - catching on in the field - is what internships are all about.

Monday, May 21, 2012

The Best Careers

Good morning! 

Often on the radio I have been asked what careers young people and others should choose. 

The best way to approach the issue of where someone should try to work is by looking at the factors that are causing jobs to go away permanently, which are, in rough order of importance:

1.  Automation.  It has become more and more extreme, to the point where any position using linear logic, in other words "if A happens, I'll do B," is in danger to be taken over by a machine.

2.  Globalization.  Has reached the point where Americans are just too expensive.

3.  Health insurance.  It costs more and more, and inhibits job creation and maintaining existing ones.

4.  Scalability:  Many modern products, especially electronic ones, can be produced by the millions for little more labor than the original one cost.

5.  Efficiencies discovered during bad times.  They get used even when the resources, particularly time and money, come back to make them unneccessary.

We need to consider jobs that are relatively resistant to the factors above. 

The best will be positions that must be done by humans, in person, on things too complicated for automation.  Strangely enough, these can be those in physical environments, even if working with them does not require unusual intelligence.  For example, it will be a long time before hotel rooms can be remade and cleaned by machines, yet radiologists, who make a living interpreting patterns, are in serious danger. 

Next best will be those that require local workers.  If you order a box of doughnuts, they will come from in or near where you live or work, no matter how good the ones across the country.  Likewise haircuts, massages, and many health care services. 

Jobs that can be done by people not requiring health insurance will also fare better.  Work in creating products that cannot be easily duplicated, such as software, will last longer.  Jobs where work processes can't be improved further will not be eliminated that way.  But mainly it is the automation and globalization.  If you work on a computer, you can be replaced by someone anywhere in the world, but if you work with your hands, you can't be. 

Accordingly, I especially recommend the following:

- Skilled building trades
- Housekeeping
- Food preparation
- Personal services in which hands are used
- Cleaning or maintenance
- Driving trucks, buses, or taxis.

What more can you think of?  Would you like to see more on this topic?


James B. Huntington

Monday, May 7, 2012

The Most Important Jobs Number

Good late evening! 

Last week, the Bureau of Labor Statistics released the monthly employment numbers, showing what happened with jobs in April.  There were 115,000 net new American positions created, and the unemployment rate dropped from 8.2% to 8.1%.

Does the former explain the latter?  No!

The United States needs 125,000 to 140,000 net new jobs just to cover population increase.  Therefore, unemployment should have stayed the same, or maybe increased a tenth of a percent.  Why didn't it?  The answer is easy.  More people left the labor force. 

The unemployment rate is calculated as

1 - (# Americans with jobs)/(# Americans in the labor force), expressed as a percentage. 

So if there were 10 Americans in the labor force of whom 9 were working, the unemployment rate would be

1 - (9/10), or .1, expressed as 10%.  

As you can see, the unemployment rate is not tied to the number of Americans overall, but to the number in the labor force.  In order to be in the labor force, you must be either a) working, or b) not working AND applying for at least one job in the previous month.   So if you stop looking, you drop out of the denominator of the above fraction, making the rate lower than it would be if you were still trying to work - pounding the electronic pavement or whatever it is you were doing.    Yet you are not on the job - you have just stopped officially trying to get one.

So how many people left the labor force in April?  Applying simple algebra, we find that if there were 140 million Americans working in March, increasing to 140.115 million in April, we see that in order for the unemployment rate to decrease as above, the labor force must have shrank from about 152.505 million to 152.465 million.  So despite a net increase of about 132,500 Americans reaching working ages, the labor force dropped about 40,000.  The labor force, in fact, is now under 60% of the population, and is reaching decades-long lows. 

The most important jobs number is none of these, though.  It is the total count of Americans who want to work full-time and are not.  They now number about 32 million - 12.5 million officially unemployed, 9 million working part-time who want more, and 10.5 million who say on surveys they want to work, but are discouraged.

THAT, not the unemployment rate, the number of new jobs, or even the count of people who filed for unemployment benefits last month, is what we need to minimize.  And unlike the other tallies, it only rates to increase.   So if you are working - please, save some money.

Tuesday, May 1, 2012

Generations and Opportunities

Good morning!  Rainy here in Eldred, but will dry up soon, in time for my running I hope.  I don't care though if it sprinkles a little, or more, if there aren't any thunderstorms.

There was a good Paul Krugman column in the New York Times on Sunday, called "Wasting Our Minds."  He made the point, which I had made in Work's New Age, that what generations do is often a result of their opportunities. 

In particular, we've heard a lot about the "Greatest Generation," (a bit too much, actually, for my taste), born from roughly 1910 to 1925, and how they fought superbly in World War II, which has stood up as the most significant (with the possible exception of the Revolution) American military victory in history.  True, they did a lot and did it very well, but much of it was forced upon them.  They were either drafted or had great social pressure to enlist, were put in a setting of great cooperation and high standards.  They proved equal to what came at them, yet the opportunity was right in front of them, and almost all but the 220,000 who, to be fair, never came back, had more and more prospects than our current young people could believe.  Want to go to school, beyond any educational level you thought you'd reach?  Go, on the G.I. bill.  Want to work in government?  You'll get preferential placement as a veteran.  Want to work somewhere else?  Opportunities galore, most of which would support a family, even if you took several years off first.   

So whose minds did Krugman say are being wasted?  Those of the Millenials, born from about 1980 to 2000.  They have had lives in many ways opposite to the generation above.  They grew up during the prosperity of the 1990s and bubbles of the early 2000s, which pushed their expectations up to levels future economic times could not sustain.  They had no conscription and nothing at all similar of socially-encouraged national or other service.  They became well educated, and expected, consistent with the previous five decades, that they would therefore easily get into the middle class. 

Yet the reality of the Milennials has been different.  The job market, as we know, has been particularly severe on them - with so many good, experienced older people willing to work at entry-level positions, who would hire them?  As a group, they are totally lacking in direction.  Many live with their parents well past college age, something happening to some extent because of their parents wanting to give them things they didn't have, making their homes more comfortable, but mainly due to their lack of careers.  Part-time at Blockbuster is not enough to move out on - or get married and have children on either.

Now something I can't stand is hearing, as I have from several sources, that they are somehow personally deficient.  People take the paths they perceive as available to them.  We are past the point where all good people can get jobs, if they only look in the right place, improve their attitudes, work harder, or anything else.  There are 32 million Americans wanting full-time work who don't have it, and a large share are under 30.  Only a few can be Mark Zuckerbergs. 

What should the bulk of college-educated Millenials do?  Technical school would work for some, but far from most.  Skilled building trades likewise.  Last I heard even the Peace Corps rejected three fourths of its applicants. 

Tell me what you think!