Why Bruce was right...  

Jan likes Bruce Springsteen's music. So I have heard "My Hometown" a few times. And I could not help but think of the line, "...these jobs are going, boys, and they ain't coming back" as I read these seemingly disconnected news items.

But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy. (Disclosure: Slate participates in Amazon Associates, an "affiliate" advertising plan that rewards websites for sending customers to the online store. This means that if you click on an Amazon link from Slate—including a link in this story—and you end up buying something, Amazon will send Slate a percentage of your final purchase price.)

It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed. [More]

The crucial aspect of this is the impact is in the service sector - not manufacturing. The former is supposedly the sector of the Future for jobs.

Next, jobs in an industry that is a little closer to home for some of us.

But à la carte would blow up television, which has been the most dependable and lucrative business model in modern entertainment history. The Internet gutted the music industry. Print journalism has been forced to innovate or die -- or, sometimes, both simultaneously -- in response to the Web. The American movie industry has survived fundamentally because it learned to diversify away from the terms "American" and "movie industry" -- most of their revenue now comes from overseas and "merchandise-able" franchises. But the cable bundle is still basically the cable bundle, and it is still growing by hundreds of thousands of subscribers a year. Innovation is an answer to a problem. As long as cable providers don't have a revenue problem, they have less need to innovate.

The debate between DirecTV (a provider) and Viacom (a "content" creator) is about finding the right price that providers should pay for content that most people don't watch. That's where bundles are useful. They disguise the price of things we don't use. But with pay TV growth slowing, we're at the edge of a revolution. "DirecTV thinks video streaming is eating away at the ratings of channels like MTV and Comedy Central," Jeff Bercovici writes at Forbes, and the company has "demanded that Viacom give consumers the right to select channels a la carte."
The Aereo story is different. It's not about cable. But it is about distributing broadcast networks online. Once sports fans can get the Olympics and NBA and other shows without a cable package, whenever they want it, it could serve alongside Netflix, Hulu and other services to replace the cable bundle.
The Internet is ruthlessly efficient at stripping cross-subsidies and allowing content to shine on its own. (As Jim Fallows has pointed out, newspapers once paid for international coverage with classifieds and cars. Now, if you want classifieds and cars, you go to a classifieds site or a cars site. Bye-bye, cross-subsidy.) Devices like Aereo combined with cases like Viacom's could be leading to an a la carte model for television. The question isn't really if the Internet's unbundling revolution will visit the television industry but when. [More]

But, this post, while subject to great debate in the econoblogosphere, strikes me as coming close to describing reality as any explanation I've seen.

 

 

When I look at this graph I see evidence of the computer age everywhere. After the recession of 2001 ended profits came roaring back and equipment investment eventually started ramping up sharply, but the employment ratio increased only between September of ’03 and December of ’06, the most frenzied time for both the construction and financial industries.

And since the Great Recession officially ended in June of 2009 GDP, equipment investment, and total corporate profits have rebounded, and are all now at their all-time highs (non-financial profits are near their historic high). The employment ratio, meanwhile, has only shrunk and is now at its lowest level since the early 1980s when women had not yet entered the workforce in significant numbers.

So current labor force woes are not because the economy isn’t growing, and they’re not because companies aren’t making money or spending money on equipment. They’re because these trends have become increasingly decoupled from hiring — from needing more human workers.

As computers race ahead, acquiring more and more skills in pattern matching, communication, perception, and so on I expect that this decoupling will continue, and maybe even accelerate. This doesn’t mean that companies are about to stop hiring altogether; there are still plenty of things that humans alone can do. But it means they’ll need to hire at an ever-lower rate, compared to how quickly they’re growing, making money, or buying equipment. Because America’s working age population will continue to grow for at least the next few decades, I predict that the employment ratio will not start to trend upward in the coming years. If anything, I think it’ll decrease. [More]

It is clearly reasonable in our subsector (cash grain). We're replacing people at an increasing rate matched by our acquisition of technology. When we can have one guy monitoring 2-3 field machines, it will be obvious, but our current self-deluding pseudo-stats about "jobs that depend on ag" help us to imagine this isn't happening.

More importantly, there is no political solution to this trend, I doubt. Pretending there is leaves us without any plans for adapting to it.

As you head out...  

To a graduation ceremony, try not to think about these troubling trends.

First, the sad job situation.

The research, done at Rutgers University, found that of the kids who've graduated from college since 2006, only 51 percent of them have full-time employment, and eleven percent of them are not working at all. That's bad enough, but when you look at just those people who have graduated since 2009, it gets even worse. Fewer than half of them found a job within a year of graduating; whereas 73 percent of those who graduated between 2006 and 2008 found jobs in the first year. Kids who graduated after 2009 are three times more likely to not have a fulltime job than the kids who finished between 2006 and 2008. Carl Van Horn, one of the study's co-authors, says,

The resilience of this year's and recent college graduates are being tested. Students who graduated during the past several years are facing historic obstacles in achieving the foundations of the American dream.

Well, the idea that they've got to go out there and dream the impossible dream really ought to motivate everyone currently busting ass to finish up school and get out into the "real world." [More][Source study]

But wait - there's more!

The study also determined that of those post-2009 grads who did end up finding full-time employment, 43% have jobs that do not require a college degree, prompting many to agree with their mothers' advice four years ago that you probably shouldn't have wasted four credits on that "Hegelian Dialectics in Buffy the Vampire Slayer" course you took sophomore year. Employed, post-2009 graduates also have an average starting salary of $27,000, $3,000 less than the average starting salary for the classes of 2006 and 2007; experts estimate that given the fragile state of the post-2009 economy, these wages are likely to stay depressed for the next ten or fifteen years. [More]

At the same time, student debt could be the next financial debacle we have to manage.

Over the weekend, the NYT had a great, in-depth look at soaring student debt figures, and the picture is not pretty: over the last decade, tuition and fees at state schools have increased 72%, and public funding per pupil has dropped 24%.
Student loans are now a generational rite of passage – 94% of students borrow to earn a bachelor’s degree, up from 43% in 1993. The total value of student loan debt has passed $1 trillion, up from $852 billion halfway through 2011. As the Federal Reserve shows, it’s not just the young who bear the burden: a third of the value of outstanding student loans is owed by those older than 40.
Congress, for its part, is currently wrangling over a bill that would prevent federally subsidized student loan rates from doubling to 6.8% beginning July 1. Looking at that debate, Will Wilkinson makes the point that interest rate subsidies are just another form of spending that could be better directed at scholarships for students of modest means. And Conor Friedersdorf takes that argument one step further, calling indebted college graduates a “privileged class” on whom spending money “in a country with impoverished immigrants and struggling high school dropouts and hard-pressed single mothers” is pandering at its worst.
While lower interest rates would help, Mark Kantrowitz and Mark Schneider point to students’ bleak income prospects: “Debt is a problem only if students don’t graduate or if graduates can’t get jobs that pay enough to allow them to repay their loans. Taking on $25,000 in student loans to earn an additional $25,000 per year is a good investment; borrowing $100,000 to earn an additional $5,000 per year is not.” Josh Barro also notes that loans are just one way to fund higher education – direct state funding of public universities is the most obvious alternative. [More]

As hard as it is to imagine, perhaps the basic impossibility of these two trends co-existing means college costs may soon have to become subject to ordinary supply-demand economics. One possible outcome would be new rankings from US News and World Report, et al, based on placement - Is our children working? - so to speak.

It is no small coincidence that young people are lined up ten deep waiting to get into farming. Notice how there are precious few articles in the ag media about getting kids back to the farm, just laments about how hard it is to get them started.

It also increases my skepticism that not allowing them to do dangerous work as an employee for another farmer is necessary to lure them back. I can't believe we sold ourselves that whopper to justify our wretched child safety record.

The weather report...

For everywhere.

(I think I can see my house!)
 
Happy Birthday, Terra.

No, not Terra the Earth, Terra the satellite. NASA’s Earth-observing bird first opened its eyes on February 24, 2000, and for the past decade has been dutifully watching our planet. It has looked upon us at different wavelengths, different resolutions, at different times of day, and different times of year. It has tracked changes, and reported back what it has seen. [More]

Sad note: due to funding cuts my local PBS station is dropping its weather department.

The elimination of the weather department signals an end to independent weather forecasting for WILL Radio and WILL-TV. Staff will share weather information with listeners from reports from the National Weather Service.

Providing the weather to the public costs about $140,000 a year, $40,000 of which is underwritten by businesses, according to Illinois Public Media.

“We are proud of our long tradition of weather coverage. Ed Kieser, Mike Sola, and their staff have for years dedicated themselves to making sure our listeners knew when severe weather threatened as well as bringing them day-to-day forecasts. But now that in-depth weather information is available on the Web and elsewhere, we believe that our limited resources must be applied to other areas,” said Illinois Public Media General Manager Mark Leonard in a statement Thursday. [More]

I wonder if media "weatherpersons" (?) are finally going to join the recession for the reason mentioned above. If the product is essentially free on the Internet...

THESE HAVE BEEN hard times for news organizations, and TV news is no exception. Fewer people are watching: viewership of local TV news fell by an average of 4.5 percent last year. Revenue is down, and with the precipitous drop in auto ads, once the staple of local TV news, it’s unlikely things will get better soon. Experienced and expensive anchors are being dropped for younger, cheaper ones. Reporters and producers are on the chopping block. But in the midst of all the cost-cutting, it seems the television weatherman isn’t going anywhere.

Weather is key to developing a strong brand for local newscasts, and it’s relatively cheap to produce. Beyond salaries, the only real expenses are any private weather forecasting or graphics services used in addition to National Weather Service data, which is free. Top meteorologists may find their salaries getting cut just like the anchors who stick around, but due to their low cost and high value, they’re unlikely to be sent packing. Karpowicz says that in a news department of 60 people, the total weather budget including salaries and expenses accounts for less than one-fifth of the total news budget. “We are in difficult times,” says Karpowicz, “but we are not considering cutting back on weather.”[More]

Maybe I'm seeing ponies that are only clouds, but it feels like the recession is starting to impact more people in my personal world recently.  It's like they've held on so far, but have exhausted their resources or luck.

It could also be that this is a reflection of tightening government budgets across the board. We often forget how important government is to rural economies.