Wednesday, November 28, 2012

You, Too, Can Become a Superstar

I am not a fan of “American Idol” or “Dancing With the Stars,” but these shows are examples of one form of upward mobility that our economy still permits: Thanks to the reach of the mass media, talented people can become superstars. Over time, people in an expanding range of occupations—not just singers and dancers—will achieve superstardom.

This phenomenon was described as long ago as 1981, when the economist Sherwin Rosen published “The Economics of Superstars” in The  American Economic Review (PDF). As examples of fields ruled by superstars, Rosen cited comedy, classical music, and elementary economics textbooks. In all three cases, a large market existed for the service or good, but each market was (and still is) dominated by a small number of very-highly-paid providers.

Rosen noted, “Motion pictures, radio, television, phono reproduction equipment, and other changes in communication have decreased the real price of entertainment services, but  have also increased the scope of each performer’s audience.” Nor is there any reason this phenomenon must be limited to performers. “Undoubtedly, secular changes in communications and transportation have expanded the potential market for all kinds of professional and information services, and allowed many of the top practitioners to operate at a national or even international scale.”

It used to be that a chef could serve only a few dozen people per night and therefore could aspire to only a middle-class lifestyle at best. Ever since Julia Child, however, several chefs with the ability to communicate effectively through the mass media have grown rich from television appearances, cookbook sales, and ownership of restaurant chains. Some highly telegenic clergy have also achieved great wealth and touched many lives by using their media savvy to reach beyond church walls.

One newly emerging group of superstars is teachers. Surprised? You shouldn’t be. This is an occupation in which the work is essentially a performance. We all can remember teachers with outstanding performance styles, the teachers who kept us attentive and who succeeded in making the lessons memorable. Now the mass media are allowing teachers to take their skills to much bigger audiences than could fit into any classroom. In Germany, a self-taught Photoshop expert with a flamboyant teaching style has built an empire of DVDs, live online webinars, and downloadable courses for those who want to learn how to manipulate bitmapped images. This superstar instructor, who goes under the pseudonym Calvin Hollywood, says he earns as much as $16,000 per month.

Another superstar teacher is Salman Khan, a former hedge fund analyst who launched a teaching career by posting YouTube videos (such as this one) that explain how to do elementary math problems. Wealthy philanthropists noticed these videos and helped Khan establish the Khan Academy, an expanding collection of free online videos about math, several sciences, information technology, economics, and several humanities subjects.

One kind of teacher—fitness instructor—has a long history of media superstars, such as Jack LaLanne, Richard Simmons,  and Jane Fonda (not to mention the granddaddy of them all, Charles Atlas).

Television news and talk shows are routes to stardom for a few professions. For example, every TV news operation spotlights a physician, such as Dr. Sanjay Gupta, to explain medical developments and issues. Among lawyers, think of Nancy Grace. Talk shows have elevated the visibility of counselors of various sorts, turning them into self-help gurus who publish best-selling books.

But these media-leveraging workers, like the exercise workout leaders, are functioning essentially as teachers. The TV doctors, lawyers, and psychobabblers are not following the model of TV-chefs-turned-restaurateurs by opening HMOs, chains of legal practices, or storefront therapy centers—at least, not yet.

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.

Wednesday, November 7, 2012

The Divisive Election Reflects a Divided Economy

Last Sunday’s New York Times Magazine carried a story about how the Amtrak ride from New York City to Washington offers a microcosm of the new American economy: at either end of the trip, prosperous cities fueled by government and finance, and in between, struggling cities plagued by high unemployment. This portrait represents the challenge that confronts the second term of the Obama Administration.

The article correctly points out that the nostalgia for good-paying manufacturing jobs, expressed so often in campaign speeches during the previous months, overlooks the reality that “the dollar value of goods made in America is at an all-time high of $1.9 trillion, just about even with China. The catch is that the number of American workers needed to create all that value has dropped steadily. In the mid-1940s, more than half of the New Jersey work force was in factories; today around 7 percent [are].” Modern manufacturing facilities employ “a handful of highly trained workers guiding machines that return huge value to shareholders while all the time finding ways to produce more goods with fewer workers.”

The writer, Adam Davidson, notes that the train ride also offers views of shiny office buildings housing “law firms and engineering companies and I.T. firms.” He is mistaken when he identifies the workers in these buildings as having “nothing to do with manufacturing.” That is true for many of these office workers, certainly, but the nation’s high-dollar-value manufacturing industry depends on engineers and I.T. workers who apply new technologies, as well as lawyers who work out contracts and fight patent infringements, to keep their companies competitive.

It’s highly significant that General Motors has done a U-turn on its previous trend of outsourcing information technology jobs, according to an article in MIT’s Technology Review. When GM’s current chief information officer came on board in February, 90 percent of the company’s I.T. work was being done outside of GM. Now GM plans to open four software innovation centers around the United States and may hire as many as 10,000 workers to staff them. This shift recognizes the fact that as manufacturing—from the design process to the assembly floor—has become thoroughly computerized and automated, and as the automobiles themselves have integrated many computerized components, it is expertise in I.T. that gives American carmakers the competitive advantage over foreign firms.

Where Davidson is very much on point is his observation that these white-collar service jobs are not as easily obtained as the manufacturing jobs of the old economy: “For people with advanced training, the service sector means an above-average wage, a below-average risk of unemployment and days sitting at a desk. For those with only a high-school [diploma] or no degree at all, far fewer jobs are available, and the ones that are pay poorly and disappear quickly.”

During the presidential campaign that just ended, you probably heard a lot about policy differences between the two major parties. Many of these policies had implications for the new economy outlined in this article: for education that will equip workers with advanced skills, for innovations in technology that will keep us competitive, for health care that will keep us productive at costs that are not crippling, and for infrastructure that will allow industries to function efficiently. We voters have now chosen government leadership that is highly divided on which policies will achieve these ends. Let’s hope that our leaders can move past the gridlock of the past several years and find ways to keep our industries strong without leaving behind a large segment of the population.

Friday, November 2, 2012

Careers for a Hot Planet

This blog entry is not as data-driven as some others, because I did not have access to my usual databases when I wrote it. I was in another state, using a borrowed computer, because super-storm Sandy had knocked out the power at my home. (I live in New Jersey.) The storm also made me think about global warming and its implications for career choice.

There is no way to prove that Sandy--or any specific weather event--has been the result of global climate change. However, there has been a recent uptick in destructive weather events. And the build-up of greenhouse gases is also expected to cause crop failures, rising sea levels, and acidification of the oceans. This will affect our lives in many ways, including changes in demand for certain workers.

One career that will see increased demand is lineworkers. I am especially aware of this career because one of these workers recently married into my family. Last week, once the weather forecasters became aware of Sandy's likely path and destructive power, lineworkers from states as far-flung as Indiana and Georgia were dispatched to New Jersey and other hard-hit locations. Future storms will bring down power lines and telecommunications lines, and these workers will be summoned to patch up the grid again and again. In addition, they will be needed to run power lines to new locations as solar-power farms and other new electricity sources are set up, and to string fiber-optic and conventional cable to neighborhoods that presently are not connected. Electrical power-line installers and repairers are projected to grow by 13 percent between 2010 and 2020. Growth of 14 percent is projected for telecommunications line installers and repairers. These are good careers for those who like working outdoors and who have no fear of heights.

Many scientific and technological jobs will be created to solve the problems that global climate change brings on. For example, one result of climate change will be disruption of the synchrony between agricultural pests and the predators that historically have kept the pests in check. Agricultural scientists and technicians will be needed to develop and implement new ways to control pests. Conservation and environmental scientists will be needed to measure the impact of climate change on ecosystems and wildlife populations.

Changes in climate will result in human migrations. These disruptions will create demand for occupations as diverse as movers, real estate sales agents, urban and regional planners, community service managers, and social workers.

Of course, there will be--and is already--growth in the jobs whose purpose is to reduce the production of the greenhouse gases that are the root cause of global climate change. Solar panel installers, electric vehicle technicians, wind turbine mechanics, and biofuels production managers are some of these occupations. The Department of Labor is starting to develop information about these emerging green occupations, but reliable figures about average earnings and job-growth projections are not yet available.

Election Day is upon us, and I was disappointed to observe that global climate change was entirely overlooked in the presidential and vice-presidential debates. But science and politics are not always comfortable companions. The House Committee on Science, Space, and Technology has one member who believes that Earth is only 9,000 years old. (Ironically, my congressman, Rush Holt, does not serve on this committee even though he has taught college physics and has been the Assistant Director of the Princeton Plasma Physics Laboratory.) It does not seem likely that government will take the measures that will be needed to stop global climate change--if it is not already too late.  Private industry certainly will not step up to the challenge.

So it looks as if careers for a hot planet will be the hot jobs of the future.