Wednesday, November 14, 2012

A Second Look at My Predictions

Now that the presidential votes have (almost) all been tallied, I’m sure that a lot of pundits are hoping you will not look at their pre-election predictions. (If you’re curious, you can see several of these on Ezra Klein’s blog. I’ve made some predictions of my own in print—not about the election, but about career prospects. I’m going to use this period of transition to a second Obama administration to look back at my prognostications in the book called Great Jobs in the President’s Stimulus Plan (2009). It turns out that my recommendations were, on balance, poor advice for the short term but good advice for the long term. And I’m okay with that. Occupational choice (as opposed to job choice) should be a long-term decision.

First, let me give you a bit of context about why and how this book was written. In the weeks following the 2008 election, as the inauguration drew near, interest in and excitement about the president-elect was building, and many businesses were cashing in by offering products such as Obama commemorative crockery. At the same time, the Obama transition team was developing the outlines of an economic stimulus plan to try to lift the nation out of the terrible recession. My editor at the time, Susan Pines, suggested that there was a market for a book that would focus on occupations that were likely to get a boost from the stimulus plan. On January 9, 2009, she gave me 14 days to develop a manuscript. I worked day and night like a madman and sent in the manuscript on January 20, a few hours before the new president was sworn in. The editing and page-layout staff at JIST Publishing then turned around this manuscript in record time and shipped the printed book February 4.

Understand that at the time I wrote the book, I had only an incomplete picture of what would be in the stimulus plan that eventually became law as the American Recovery and Reinvestment Act. In the terms of the old metaphor, the horse that I found in the plans of the Obama transition team ended up looking more like a camel once it had achieved passage by Congress. Some provisions were modified to gain the support of senators and representatives with diverse ideological and regional interests. Much of the funding for the original plan was redirected into tax cuts. In the introduction to the book, I warned about the limitations of my predictions.

But I also noted that the stimulus plan was designed to do more than just reopen the jobs that had been lost.  One important goal was to create jobs in sectors of the economy that would anticipate the directions where the American economy needed to go to remain competitive in a global job market. Therefore, the promise of these “great jobs” was not just a matter of short-term employment but also the potential to be good long-term choices. And when measured for the long term, based on the most recent job-market projections, my recommendations still hold the promise of success.

Let’s look at the record in detail, measuring my predictions against actual changes in the workforce between May 2009 and May 2011. (The BLS issues estimates of workforce size for May of each year. May 2009 was the latest May before the stimulus could start to influence the economy; May 2011 is the latest May for which figures are available.)

In Great Jobs in the President’s Stimulus Plan, I selected eight industries that the ARRA was designed to promote: Construction; Education; Energy; Health Care; Management, Scientific, and Technical Consulting Services; Manufacturing; Scientific Research and Development Services; and Wholesale Trade. I identified 300 occupations that are important in these industries and that had reasonably good outlook projections. This set of 300 included some occupations (such as Technical Writers, Sales Engineers, and Industrial Truck and Tractor Operators) that are not closely linked to any of the eight industries but are important across industries. These 300 occupations, taken from the O*NET-SOC taxonomy, represent 267 unique SOC occupations for which it is possible to obtain workforce statistics.

Now let’s look at the scorecard. The baseline for comparison is –1.8 percent. The workforce of all occupations shrank by 1.8 percent between May 2009 and May 2011. My set of 267 SOC occupations, the “great jobs,” shrank by 2.3 percent—in other words, did worse than the workforce as a whole. The construction jobs in the book shrank by 4.0 percent. The education jobs shrank by 0.6 percent; the energy jobs by 0.7 percent; the management, scientific, and technical consulting services jobs by 4.0 percent; the manufacturing jobs by 2.2 percent; the scientific research and development services jobs by 0.1 percent; the wholesale trade jobs by 3.1 percent; and the cross-industry jobs by 1.0 percent. The one bright spot was the health care occupations, which grew by 2.0 percent.

But recall what I said earlier about how the stimulus plan was designed to boost the sectors of the economy with the best prospects for long-term growth, and about how occupational choice should be based on long-term prospects. For the long term, the baseline is 14.3 percent. That’s how much the workforce as a whole is projected to grow between 2010 and 2020, the latest forecast available from the BLS. Against this baseline, the occupations I chose for the book score much better. The 267 unique occupations in the book have average projected growth of 15.7 percent over this long term.

Not all the industries into which I grouped the occupations fare better than the average for all occupations. For example, the manufacturing occupations I chose are projected to grow by an average of only 9.0 percent. However, what makes jobs “great” is not just the average growth of the industry. One of the slow-growing occupations is Secretaries, Except Legal, Medical, and Executive, a very large occupation (more than 2 million workers) with projected growth of only 5.8 percent. The large size of this occupation, while it drags down the average growth rate for this industry, also means that it will create a very large number of job openings because of turnover. And many of the slow-growing occupations, such as Industrial Engineers (projected at 6.4 percent) and Mechanical Engineers (8.8 percent), offer high salaries and many job opportunities. In fact, the manufacturing industry is now having great difficulty recruiting as many engineers as it needs.

The lesson to take away is that no one factor makes an occupation “great”—not any one economic factor, such as job growth, nor any other single factor, such as indoor versus outdoor work. It is likely to take many years before a career choice turns out to be a good one, and the same occupation can be a good goal for you but a bad one for someone else. Get a broad range of facts and impressions about a career—ideally, some firsthand experience observing it—before making a choice. And learn about the long-term trends for the occupation—not just the economic trends, but also the trends in work conditions.

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