Thursday, February 26, 2015

Is “Breaking Bad” a Skill?

This blog was inspired by the very last episode of the popular television drama “Breaking Bad” [spoiler alert!]. Walter White, once a milquetoast chemistry teacher and now a ruthless drug baron, confesses to his wife that he did not persist in his life of crime for his purported reason, which was to acquire a nest egg for his family to live on after his death. “I did it for me. I liked it. I was good at it. And I was really—I was alive.” Setting aside the matter of his enjoyment—which, in career development, would fall into the category of interest—let’s consider what it means to be good at crime. Is criminality a skill?

If we consider what it means for criminality to be a career—which means setting aside crimes of passion—we see it takes several forms. It includes such illegal pursuits as armed robbery, counterfeiting, selling illegal drugs, confidence rackets, and identity theft, among others. However, it also includes crimes that some people commit as part of what otherwise would be a law-abiding career—for example, securities traders using insider information or oligarchs conspiring to strangle competition.

Both kinds of criminals need to be skilled at the particular type of crime that they commit. For example, the counterfeiter has to be good at producing a realistic imitation of genuine currency. The drug dealer needs to be good at making connections with buyers. The identity thief needs to have skills with computers or with some other way of obtaining personal information about victims. These skills therefore are highly specific to each kind of criminal enterprise. White-collar lawbreakers need to have the skills that establish them in the law-abiding careers from which they veer into criminality—again, highly specific skills that can’t be summarized as a skill at criminality.

All kinds of career criminals also need to be skilled at escaping detection by the authorities. Here again, the skills are specific: The counterfeiter has to be skilled at passing funny money in ways that will escape notice, at least in the short term. The drug dealer needs to know how to operate stealthily. The securities trader who makes a killing based on insider information has to be skilled at manipulating the source of information to keep quiet. Any of these criminals might also corrupt law enforcement by using interpersonal skills, in addition to bribes.

Although these various criminals have highly diverse skills, one skill that many criminals have in common is the ability to use violence. Violence can help the criminal escape detection—silencing potential informers by threats, mayhem, or extermination. It can also fend off competition and theft. After all, someone who, like Walter White, is earning money from a criminal enterprise cannot expect the law enforcement authorities to protect his assets. Other outlaws understand this and will victimize the criminal who does not defend himself and his loot. White-collar criminals are mostly unlikely to resort to violence, but it is one skill that cuts across a broad swath of criminals.

However, even violence is not a single skill. One criminal may be talented at personally using a gun or fists, whereas another may be skilled at identifying and recruiting thugs. (That is Walter White’s strong suit.)
The skill that perhaps is to be found most universally among criminals is the ability to live with themselves, knowing what crimes they have committed. True, some criminals don’t need this skill because they are sociopaths, without empathy and incapable of feeling guilt for their actions. But criminologists say that these people are rare. Most criminals understand that they are doing wrong and have to deal with that understanding.

Generally, they adopt defense mechanisms: I’m doing this for my family (that’s Walter White’s). I’m doing this because society has conspired against me and I’ll never succeed in the straight world. I’m doing this to sustain a great company that employs thousands of people. I give a lot of money to widows and orphans. I get a lot of respect (from some people). One more big score, and then I’ll retire and go straight. Everybody does it.

Ultimately, this skill amounts to an ability to rationalize. Or you might call it hypocrisy, which Francois de La Rochefoucauld called “the homage vice pays to virtue.” It’s not a skill to be proud of; criminality is not something to be proud of. It is often regarded as a weakness, but I maintain that it functions like a skill to the extent that it allows people to pursue one kind of career: crime.

Friday, February 13, 2015

Which Industries Are Recession-Proof?

Everyone knows that the nation is now recovering from the worst recession since the Great Depression. But not every industry sank into recession or recovered from it on the same schedule. In fact, some did not sink at all, and some have not yet recovered. I thought it would be interesting to look at employment in the major industries and see how their experiences varied over the course of the years from 2007 to 2013.

I obtained figures from the Occupational Employment Survey of the Bureau of Labor Statistics and graphed them. (Note that for the second and third graphs below, the y axis starts at a number greater than zero. I used scales that would emphasize vertical shifts. If you find the graphs below rather small to read, just click on the links that pull up larger versions.)

The most important lesson to take away from all three graphs is that the low-tide mark of employment in most industries did not happen right after the financial crisis of 2008, but rather two years later, in 2010. When recession first strikes, employers generally try to hold onto skilled workers and hope for a quick turnaround to better times. They may have a cushion of resources that enables them to postpone layoffs

But when the economic slump drags on and the rainy-day funds are expended, employers start to shed workers. And as unemployed people draw down their own rainy-day funds cut back on their own expenditures, the slackening demand adds to the woes of employers. This is the recessionary spiral that can take a few years to hit bottom. Europe, which chose the path of austerity rather than stimulus, seems stuck in a valley, but the American economy, as a whole, started to turn upward after 2010.

But different industries have followed different paths. Let's start by looking at the first chart below. (Larger image here.)

Of these seven industries, only three follow the classic U-shaped curve of loss and recovery: the purple line, Mining, the pale blue line, Real Estate and Rental and Leasing, and the orange line, Arts, Entertainment, and Recreation. It's not surprising that Real Estate follows this U curve, because a dramatic loss of real estate value is what precipitated the financial crisis. (Note that, like property values in most locales, employment in this industry has not recovered the pre-recession level.) It's also to be expected that the Arts would lose business during recession, although the downward dip of the curve is really quite shallow. These jobs seem to be less sensitive than you might expect. Mining, on the other hand, actually owes its dramatic uptick in recent years not as much to the economic recovery as to the developing technology of fracking.

Management of Companies and Enterprises, the turquoise line, hardly declined at all during the recession and more recently  has been making impressive gains. Everyone knows managers who lost their jobs in that downturn, but apparently jobs in management are less sensitive than those of rank-and-file workers.

The two lines at the bottom--for Utilities (green) and Agriculture, Forestry, Fishing, and Hunting (dark red) are almost level rather than curving. People need electricity, water, and other utilities no matter how the economy is doing, and a cutback in volume (for example, less use of electricity for manufacturing) has little effect on the number of people needed to work at the utility plant. Agriculture sometimes suffers from downturns in prices because of overproduction, but the rapidly rising world population and some diversion of crops to biofuel production seem have kept employment steady in recent years.

The really dismal story here is what happened to the Information industry--which consists mostly of the media, not computer technology. Like Mining, this industry has been affected mostly by technology, but not in a good way. As more and more media content migrates to the Internet and media companies consolidate, the need for workers has reached a permanently lower level than before the recession.

Now, let's look at the second chart. (Larger image here.) All of these medium-sized industries follow the classic U-shaped curve, although there are two interesting variants on the U shape: Construction (pale blue, second from the top) dropped off very steeply after the housing bubble popped and is still a very long way from recovering to its pre-recession level. Professional, Scientific, and Technical Services (orange, at the top), by contrast, has already recouped all the lost jobs and is reaching new heights. This industry includes America's premier field, high tech.

The third chart (larger image here) shows the largest industries. Here, the most dramatic curve is the light red line at the top, Health Care and Social Assistance. As I predicted in my 2008 book 150 Best Recession-Proof Jobs, this industry was unfazed by the recession because it is vital to life and has been gaining in demand because of the aging Baby Boomers. Expect this upward path to continue.

Educational Services (turquoise) is actually an upside-down U, peaking when other industries bottomed out and falling slightly thereafter, although this curve is very shallow. This is another industry that I predicted would be recession-proof, because people seek additional education during an economic downturn--displaced workers retooling for new jobs or young people postponing their entry to the workforce. The slight downturn in more recent years is largely explained by cuts in public education budgets, a consequence of the political movement to lower taxes, and by the increasing use of adjunct teachers in postsecondary education.

The orange curve for Manufacturing resembles the path taken by Construction in the previous chart: a steep decline into recession, followed by a slow and inadequate recovery. In dollar terms, Manufacturing has actually bounced back, but employers in this industry rely more heavily on automation than they did a decade ago, so fewer human workers are needed.

The path for Retail Trade (pale blue) is a much shallower version of this same curve. As consumers have opened their wallets, retail purchases have returned, but automation--especially the large amount of buying that gets done on websites--has reduced the number of workers.

The takeaway from this set of charts is that it is possible to ride out a downturn with minimal risk of job loss, provided you establish a career in a recession-proof industry. But it also shows that technology can cause long-term, perhaps permanent changes in the need for workers in some industries. As technology advances, it may increasingly affect employment in industries that previously have not felt its impact, such as education, health care, and professional services. One of the best ways to find job security is to work with technology in any field at a high level of skill.

Thursday, February 5, 2015

The Changing Expectations of Employers and Employees

As teenagers turn into adults, they and their parents need to renegotiate the terms of their relationship. The parents have to let go of the control that they had over their children’s’ lives, and the new adults have to learn how to fend for themselves without the parental safety net. The transition usually takes several years, during which there are always awkward, even painful moments when the two parties’ expectations don’t totally match.

Something similar has happened as the employer-employee relationship has changed in recent decades. Traditionally, employers have had certain expectations for their employees: high-quality work output, low absenteeism, a good attitude, and reasonable cost. Employees have had their own expectations: a reasonably good work environment, respect, steady employment, and at least a living wages. Starting in the late 1970s, these expectations began to weaken or even fall away, but during this period of transition, the two parties have often found their expectations were not in synch.

The first big dislocation was the wave of downsizing that began in the 1970s and 1980s. Companies decided that their need to contain costs was more important than meeting their employees’ expectation of steady work. Loyalty became a thing of the past. In making this move, employees banked on the notion that the quality of work output would not diminish with employees’ loss of security. My generation, the Baby Boomers, never completely adjusted to the new reality. Books like What Color is Your Parachute? taught many of us how to deal with this situation, but we did not and still largely do not accept that this is the way jobs ought to be. Our expectations are stuck in the model of the 1950s and 1960s economy.

However, it’s also true that many employers did not fully appreciate how they had changed the nature of the relationship. I experienced this when I returned as a consultant to work for a company where I had been downsized after many years as a salaried employee. The company presented me with a contract that included a two-year noncompetition clause. I was flabbergasted. The company was saying, in effect, that they had no loyalty to me but that I had to be 100 percent loyal to them. I refused to sign the contract unless that clause was removed. They needed my skills badly enough that they conceded on this point.

In the 1990s, automation killed off some jobs but added so much productivity to other jobs that the economy as a whole did very well, so the employer-employee relationship did not change greatly. But as the century turned, computers got smarter and began to displace more workers and, worse yet, globalization resulted in the offshoring of hundreds of thousands of manufacturing jobs. Employers were happy with the reduced cost of foreign workers and the quality of their work, while the absenteeism and attitude of these foreign workers were somebody else’s problem. To find steady work, many former employees of manufacturing jobs now had to shift to service jobs and lower their expectations for the work environment, for respect, and even for living wages.

The latest dislocation is the arrival of what is often called on-demand work or the “Uberization” of the workforce. Technology now makes it possible for employers to take on workers for assignments that last only a few hours or less. The work may be driving passengers for Uber or Lyft, performing cleaning or other home services for Handy (formerly Handybook), or doing almost any kind of low- to moderate-skill task for TaskRabbit or Mechanical Turk. By using these temporary workers, who are classified as independent contractors rather than employees, employers can still meet their expectations for low cost, and customer feedback about individual workers ensures that the quality of work output and perhaps workers’ displayed attitude will not suffer. Absenteeism is not a problem as long as there is a sufficient pool of interchangeable workers. Some workers are able to earn better than a living wage in these arrangements, but many do not, and few can count on steady employment or respect in this relationship.

It is possible that many workers have become so beaten down, especially following the Great Recession, that they have lowered their expectations to the point where they can accept this new relationship. But several lawsuits are revealing small but significant instances in which employers’ expectations are out of synch with the realities of using on-demand workers. Last year, FedEx drivers won an appeals court ruling that they are not independent contractors, because the employer requires them to wear company uniforms, drive company vehicles, and maintain company standards for grooming. A current lawsuit against Handy makes a similar argument, stating that the employer does not treat its workers as contractors because it requires them to adhere to strict guidelines on matters such as what clothes to wear, when to ring customers’ doorbells, when to listen to music, and how to use the bathroom. Still another lawsuit, this one also against Handy, happened when the company stopped using a contractor because she subcontracted the work to her sister.

In the traditional employer-employee relationship, the worker’s expectations of good work conditions and a living wage were guaranteed by laws that governed workplace safety, minimum wage, overtime pay, Social Security payments, unemployment insurance, and the right to unionization. These laws mostly do not apply to on-demand work situations. On-demand workers may also face new kinds of liabilities. For example, when I was a full-time employee and drove from my office to a meeting at another site, my employer provided insurance coverage for the trip. Uber drivers, on the other hand, are insured by Uber only for the time when they have a passenger in their car; they are not covered when they drive to, from, or between assignments.

Perhaps what is needed is a new category of worker, “dependent contractor,” who would have some protections that independent contractors lack. A court in Canada ruled that this kind of worker has the right to reasonable notice of termination. Germany recognizes several rights for these workers.

Can the United States protect on-demand workers? I am pessimistic. The major constituencies that influence workplace policy are the corporations and the unions. Most corporations are not interested in making these concessions to workers, and few on-demand workers are union members.