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5 "Tells" that the Stock Markets Are About to Reverse

The Jobs Market Has Divided Into People Who Are Tech Savvy And Those Who Aren’t

Economics / Employment May 12, 2017 - 03:48 PM GMT

By: John_Mauldin

Economics

Things keep changing. And at an accelerating pace. One of the most important things to write about—and the most difficult—is the future of work. New Technology destroys old jobs, but it would also create new jobs and opportunities.

A clear example of this is the use of drone technology by the military. It requires about 100 people to prep and launch and maintain an F-16 for a single mission. Keeping an unmanned predator drone in the air for 24 hours requires about 168 workers.


A larger drone, such as a Global Hawk surveillance craft, needs about 300 people working in the background to make the mission feasible. One of the real problems for the Air Force is recruiting enough people with the savvy to fill these needs.

But here’s the problem. The world is dividing into people who can manipulate information using computers and those who can't. The difference in wages between these groups is significant.

College dropouts could be the highest earners

I have been reading and mulling over Tyler Cowan’s book Average is Over for some time now. Cowen says the ability to mix technological knowledge with the ability to solve real-world problems is the key to being a big earner in a polarized labor market.

The productive worker and the smart machine are becoming more and more complementary. As one reviewer said, “Only those who can learn to think like smart machines or at least enough to understand their operation will get success. Individuals who work with genius machines will need to retrain and learn new systems constantly.”

So the new jobs will be available only to those who have real aptitude and real training. You may be highly educated. You may even have a PhD in music or literature or even in economics. But the demand for your skills is nowhere near as high as the demand for a super nerd who dropped out of college and can sling code in his sleep.

If, on the other hand, you understand how to generate leads and new subscribers using Facebook, you’ll find people lined up to throw money at you. That is something that really doesn’t require a computer science degree. But it does demand a highly focused and integrated understanding of web technology and marketing.

Adjusting to the New Reality

We are witnessing wholesale change in numerous industries in less than half a generation.

In a recent TED Talk, Elon Musk showed off a mysterious semi-tractor capable of hauling extraordinarily large loads using electrical power. They have had the prototype for maybe a year. In less than five years, companies will be able to purchase a completely electrically powered self-driving truck.

I am sure the first trucks will have a place for the driver to sit, but it won’t be long before the need for drivers will disappear. Ditto for taxis and other local transportation. Six million taxi, Uber, and truck drivers will find themselves out of a job. In 10 years. That is not much time to adjust your career path.

The picture is not entirely gloom and doom. There will be a large cultural shift in the way work and income are allocated. But that is going to require society to go through wrenching changes, because our expectation seems to be that we can somehow get back to the nirvana of the ’50s through the ’90s. That is just not going to happen. And we’re going to have to adjust far more quickly than our great-great-grandparents and their children did in going from the farm to the factory to the office.

So, yes, much angst for the Millennial and younger generations. Helpfully, they seem to be more realistic about their future than my generation was. But they are not as entrepreneurial and risk-taking as previous generations were, and those are the qualities required to grow an economy.

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