The really big problem...  

I have become more convinced than ever our global economy is confronting a growing obstacle in the form of human-obsolescence on the producer side. Sure we need consumers to buy goods and services, but our demand for workers to supply them languishes without signs of a turnaround. (Which also explains the lack of consumers, duh.)

It is hard to look at technology and not see the the reason. The recession has had the odd consequence of promoting technical upgrades to lower production costs, lowering even further the need for people.

The question for me is not when where will the consumers come from, but what will they do to earn a living?

FEAR of displacement from one's job by a superefficient machine is as old as modern economic growth (which is to say, about two centuries old). It is somewhat surprising that there has not been more made of the possibility of technological unemployment during the recent recession and lacklustre recovery. Technological unemployment was widely cited as a problem in the 1920s and 1930s, a time during which productivity was soaring, inequality and unemployment were high, and instability was the norm.
The argument that rapid technological change may be generating labour market problems is given a lift in an interesting new ebook by Erik Brynjolfsson and Andrew McAfee, entitled Race against the machine. The opening chapter attempts to cast the book as a means to understand present high unemployment, which is a little unfortunate; most of current labour market weakness can be explained by weak growth, and weak growth is well explained by weak demand. It is, however, a useful contribution to the discussion of what has gone wrong in the American economy in recent decades.
The stylised facts of that poor performance are increasingly well known. Real median income has stagnated, especially over the last decade. Inequality has risen dramatically, driven by huge increases in top incomes. Employment growth has disappointed. At least some of the blame for all of this, the authors argue, can be laid at the foot of new technology. It's an interesting twist on the themes developed by Tyler Cowen in his ebook The great stagnation. Mr Cowen argues that a major slowdown in innovation is constraining potential growth, while new progress in information technology isn't providing benefits to most workers. Mssrs Brynjolfsson and McAfee tweak the argument, writing that innovation has been gathering pace and having an increasing impact on labour markets. In a nutshell, new technologies are displacing workers faster than the economy can find new uses for them. [More worth reading]

The standard answer is education, but there are signs that solution isn't working like it used to as well. Demand for college graduates is slow, salaries are dropping, and meanwhile education costs spiral upwards.

Adding more graduates to this scenario seems like pouring fuel on the fire to me. What is often ignored is technology is replacing all kinds of workers - not just those on assembly lines. In fact, the very lowest level jobs may be the most secure: hotel maids, garbage collectors, nurses aides, janitorial workers, etc.

Stanley Aronowitz and William DiFazio wrote a pretty gloomy book in 1994 with the striking title, The Jobless Future. Here is a Harvard Educational Review discussion of the book (link). What is most discomforting in reading the book today is the degree to which the factors they identify seem to be today's headlines. What does jobless mean here? In a word, it means that the US and other OECD countries will never recover the number and quality of jobs they need in order to regain the middle class affluence they had in the 1950s and 1960s. The future will involve work -- but not enough jobs to ensure a low unemployment rate. Here is their assessment in 1994:

For there is no doubt that we have yet to feel the long-term effects on American living standards that will result from the elimination of well-paid professional, technical, and production jobs. At the same time, nearly everyone admits that many of these jobs are gone forever. (xi)

The central structural factors they identified in 1994 are still key parts of our economic environment today: technology innovation replacing labor, rising productivity producing persistently flat labor demand, shifts in the structure of the economy towards finance and service sectors, and internationalization of production. [More gloomy pondering]

I cannot see why our profession will be exempt. In fact, only land ownership seems to be a guarantee against displacement: when your buy a farm, you buy the right to name the farmer.

We are currently in the process of attracting many young and youngish farmer aspirants back to rural America. More than a few I suspect are doing so because of lack of alternatives such as mentioned above. Like professions such as law, medicine, administration, management, etc. demand for workers in our industry - regardless of how highly trained - will be limited.

We know what happens when labor demand falters. It can be seen in history books in examples as diverse as Middle Age economies (guilds) to the USSR (an economy based on who you knew). Jobs will be THE commodity of the future, I'm afraid. And the social and economic gaps between those who do and do not have one will widen and worsen.

Scary cool...

Why robots are a topic for economists as well as engineers.



The conventional wisdom is that the huge leaps in productivity made possible by robotics will eliminate whole categories of jobs but create more and better jobs.  But I have seen few expalnations about how this will work or any reasonable projections - and absolutely no evidence to date.  In fact, I am growing more suspicious robots will make enormous labor demand reductions with few offsetting labor needs.  I am not saying there won't be huge economic benefits from this transformation, but our jobless recovery could simply be the first few days of a jobless economy.

Marshall Brain [insert ironic comment here] outlines his picture of a Robot Nation in fairly credible predictions.

Automated retail systems like ATMs, kiosks and self-service checkout lines marked the beginning of the robotic revolution. Over the course of fifteen years starting in 2001, these systems proliferated and evolved until nearly every retail transaction could be handled in an automated way. Five million jobs in the retail sector were lost as a result of these systems.

Decades of research and development work on autonomous robotic intelligence finally started to pay off. By 2025, the first machines that could see, hear, move and manipulate objects at a level roughly equivalent to human beings were making their way from research labs into the marketplace. These robots could not "think" creatively like human beings, but that did not matter. Massive AI systems evolved rapidly and allowed machines to perform in ways that seemed very human.
Humanoid robots soon cost less than the average car, and prices kept falling. A typical model had two arms, two legs and the normal human-type sensors like vision, hearing and touch. Power came from small, easily recharged fuel cells. The humanoid form was preferred, as opposed to something odd like R2-D2, because a humanoid shape fit easily into an environment designed around the human body. A humanoid robot could ride an escalator, climb stairs, drive a car, and so on without any trouble.
Once the humanoid robot became a commodity item, robots began to move in and replace humans in the workplace in a significant way. The first wave of replacement began around 2030, starting with jobs in the fast food industry. Robots also filled janitorial and housekeeping positions in hotels, motels, malls, airports, amusement parks and so on.
The economics of one of these humanoid robots made the decision to buy them almost automatic. In 2030 you could buy a humanoid robot for about $10,000. That robot could clean bathrooms, take out trash, wipe down tables, mop floors, sweep parking lots, mow grass and so on. One robot replaced three six-hour-a-day employees. The owner fired the three employees and in just four months the owner recovered the cost of the robot. The robot would last for many years and would happily work 24 hours a day. The robot also did a far better job -- for example, the bathrooms were absolutely spotless. It was impossible to pass up a deal like that, so corporations began buying armies of humanoid robots to replace human employees. [More]

It's a good read in total, although his economic prescriptions strike me as uninformed.   I think the tipping point for me was the robot milking.  Once you get your head around this seemingly complex task being performed without any human intervention, the next steps of service sector jobs is more easily envisioned.

[Update: Just found this video to help non-dairy types]



This view is hotly debated, but I find the arguments discounting this possibility less persuasive.

But this is silly. Why? Machine and robotic resources aren’t free; they’re resource constrained just like everything else is resource constrained. We have the tecnological know-how to replace millions of human workers with machines right now, but we don’t because the expense of building, programming, operating, and maintaining the machines is too great. It’s not worth it. As demand for human labour falls, the price of human labour will also fall making the hiring of humans more attractive. Meanwhile, as demand for robot labour increases, the price of robot labour will also increase (since the stuff robots are made of is scarce), making the use of a robot for any given task less attractive. There will then be some market equilibrium which will, in all likelihood, involve plenty of employment for low skilled workers.
Which doesn’t mean that machines can’t place downward pressure on unskilled worker wages. They clearly can; the rise of the computer destroyed the jobs of millions of semi-skilled clerks. Those people are still working today, generally competing with low skilled workers and earning less than they previously would have. On the other hand, the rise of computers has enabled them to get a lot more utility out of what they do earn.
There are multiple constraints limiting the total dominance of machine labour. One is the analytical constraint — there are some human cognitive and physical processes that we haven’t yet learned to emulated in machines. This will continue to be less binding over time, enabling workers to potentially compete with humans in a steadily broader range of fields.

Then there is the energy constraint. Machines require power to operate, and the more machines we build, the more power they’ll need. This constraint might eventually be overcome, but until then energy costs will rise with the machine share of the labour force, helping to keep humans at work. [More]

To being with, driving low-skill wages even lower strikes me as a untenable choice for most cultures, seeing as how we're pretty close to the lowest tolerable limit now. But the other factors - cost, abilities, energy consumption - for robots are all moving in directions that will allow robots to be the first choice.  Like others, I no longer assume the outcome will be like previous technological revolutions.

Of course, this is roughly the argument people made in the 19th century too: if machines can spin cotton and mine coal and harvest crops, what's left for unskilled laborers to do?  The answer, of course, turned out to be: something else.  Productivity increased so dramatically during the Industrial Revolution, and with it the quantity of goods produced, that everyone stayed employed even though population increased and the labor content of most commodities went down.  The nature of the work changed, but 10% of a thousand, it turned out, kept as many people employed as 50% of two hundred.

So is Clark just engaged in neo-Ludditeism?  Maybe.  But there really does seem to a fundamental difference between machines that take the place of muscle power and machines that take the place of brain power — though it's hard to say for sure since we haven't really seen what computers can do yet.  Probably a lot more than most people think, though.  Clark's IVR transaction with United Airlines may seem trivial — an example of automated phone hell, in fact — but Thomas Newcomen's atmospheric engine seemed barely worth the trouble too at the time. [More]

Meanwhile both Jan and I prefer on-line  banking, travel arrangement, and shopping.  We seek out self-checkouts. And we don't even need to go into the demand for auto-steer advancements.

Looking at farms decades out, the importance in being part of the ownership/management elite (and I think that term is correct) is critical to being in agriculture at all.  Too much of what we do is simply waiting for cheaper technology to move it out of the human activity realm.

Pedantry alert...

So are there more women working than men?

Catherine Rampell at the NY Times Economix picks up Mulligan's error: The Mancession
Casey B. Mulligan noted, for example, that for the first time in American history women are coming close to representing the majority of the national work force.
At least Rampell used "work force" instead of "labor force" but she repeats Mulligan's error. Women are coming close to holding a majority of payroll jobs, but not a majority of the work force or labor force. Back in February, Rampell phrased it better:
With the recession on the brink of becoming the longest in the postwar era, a milestone may be at hand: Women are poised to surpass men on the nation’s payrolls, taking the majority for the first time in American history.
To belabor this point: Say there were 50 women and 100 men in the work force, and each women worked two jobs (men only one). The CES would report 200 payroll positions; half for men, and half for women. The CPS would report 150 people had jobs, 50 women and 100 men. Would it be correct to say there were as many women in the work force as men? No.

Both surveys have value, and I'm using this to make a point: The CES is about positions. The CPS is about people. [More]

OK, I get the point, but beg to differ on the importance.   When (and I think it's likely) women do outnumber men in the workforce, will economists begin to wonder what's happening?

If women are working two jobs, maybe some credit should be accrued.   Disdaining "positions" is frankly sexist, and I rarely use that term.  I think more economists would understand if there were no tenure and they had to support a family on their own.
 
Regardless of the call, the trend is not to be argued with.

Coming soon to your county...

Check out this amazing unemployment map.  Zoom in on your county.

It's not just about MI, CA, FL, OH, etc. anymore.  And it's going to hit rural America hard.

Write if you find work...

As bad as the unemployment numbers are globally, this layoff-fest is remarkable for introducing some new aspects of economy shrinkage.  More importantly, there are serious questions about what emplymant will look like on the other side of this recession.

For too many folks, there were already targets on their backs when the slowdown began.  Much of the employment gains in the past decades have been in the ranks of contractual labor, or as I like to think of it: 1099 World.

Structural changes in Europe’s labour markets suggest that jobs will go faster than in previous downturns. Temporary contracts have proliferated in many countries, as a way around the expense and difficulty of firing permanent workers. Much of the reduction in European unemployment earlier this decade was due to the rapid growth of these contracts. Now the process is going into reverse. In Spain, Europe’s most extreme example of a “dual” labour market, all the job loss of the past year has been borne by temps. In France employment on temporary contracts has fallen by a fifth. Permanent jobs have so far been barely touched.
Although the profusion of temporary contracts has brought greater flexibility, it has laid the burden of adjustment disproportionately on the low-skilled, the young and immigrants. The rising share of immigrants in Europe’s workforce also makes the likely path of unemployment less certain. As Samuel Bentolila, an economist at CEMFI, a Spanish graduate school, points out, the jump in Spain’s jobless rate is not due to fewer jobs alone. Thanks to continued immigration, the labour force is still growing apace. In Britain, in contrast, hundreds of thousands of migrant Polish workers are reckoned to have gone home.
Despite having few immigrants, Japan is also showing the strains of a dual labour market. Indeed, its workforce is more starkly divided than that of any other industrial country. “Regular” workers enjoy strong protection; the floating army of temporary, contract and part-time staff have almost none. Since the 1990s, the “lost decade”, firms have relied increasingly on these irregulars, who now account for one-third of all workers, up from 20% in 1990.

As Japanese industry has collapsed, almost all the jobs shed have been theirs. Most are ineligible for unemployment assistance. A labour-ministry official estimates that a third of the 160,000 who have lost work in recent months have lost their homes as well, sometimes with only a few days’ notice. Earlier this year several hundred homeless temporary workers set up a tent village in Hibiya Park in central Tokyo, across from the labour ministry and a few blocks from the Imperial Palace. Worse lies ahead. Overall unemployment, now 4.1%, is widely expected to surpass the post-war peak of 5.8% within the year. In Japan too, some economists talk of double digits. [More]

Another unusual facet of this downturn has been the elimination of an astonishing number of very high-paying jobs indeed in the financial sector  (if we still have one).

Geneva: There have been over 325,000 announced layoffs in the financial sector since August 2007, the International Labour Organization said on Monday, noting that 40 percent of those cuts, or about 130,000 jobs, were made since October of last year. More job cuts in the financial sector were to be expected as the full extent of the economic crisis became clear, the ILO said. The numbers did not include independent contractors and subcontractors.

Some of the largest announced cuts have come from US-based banks including Bank of America and Citigroup, together making up over 35 percent of global job cuts. The Swiss bank UBS, the largest wealth manager in the world, also announced 11,000 layoffs. In a report released ahead of a two day conference set to begin on Tuesday about the future of the 20 million jobs in the global financial sector, the ILO said that while the entire world's economy would feel the fallout, centres like New York and London were to bear the immediate brunt of these layoffs. "The impact will be major, considering that jobs in New York City's finance, insurance and real estate sectors account for one-third of personal income earned in the city," the report said. "The combined New York metropolitan area alone is expected to lose up to 100,000 financial services jobs." The impact on London and other hubs would be similar. Moreover, for each financial sector job lost, one to two other layoffs would be expected, feeding a vicious cycle of economic downturn. In the US, some 4.1 million people worked in the sector while in Europe, in 2006, 5.6 million people were employed in finance. [More]

If you cross these two trends, and then add in spiraling employee health care costs, wouldn't it be reasonable to predict any recovery would point toward a vastly different workforce structure?  Will there be so many unemployed highly-skilled workers that companies can draw from a pool without offering any benefits or promises for the future?  For that matter, what promises would folks believe after this job-shedding?

In addition, if our auto industry fails, eviscerating one of the last union fortresses, we will have reduced employment security across the spectrum of workers.  Economists often argue that such binding employment arrangements are cartel-like in nature and bad for the overall economy.  I agree, but in the absence of any job security, I'm not sure we know how bad productivity could get.

More uncomfortable yet is the growing realization that technology and other forces are conspiring to reduce the amount of workers needed.  Look at our farms, for one example.

So if consumption returns at a much lower pace as permanently frightened citizens save much more, I think is unreasonable to expect employment to match population growth.  Maybe as Boomers shuffle slowly off-stage more openings will occur, but this 401k-evaporating recession has undoubtedly postponed that overdue event.

I think Time got it right.  Your number one asset is now a job - not your investments or house.

Human capital is worth quite a lot. Gary Becker, the Nobel Prize-winning University of Chicago economist, figures that in a modern industrialized economy, 75% to 80% of a person's economic output comes from human capital (as opposed to, say, land or machinery). Of course, during the bubble years (first stocks, then housing), the noneconomists among us didn't exactly think about it that way. "People became mesmerized by how rich they were," says Becker, "and didn't realize the crucial asset they had in their earning power."

The tide is now turning. To see how, let's check back in with the savings rate. After it went negative in late 2005, it meandered back into minimally positive territory. Then, last year, it started bounding upward. By the fourth quarter, we were saving 3.2% of what we brought in. In January we hit 5%. No longer are we disrespecting our paychecks, treating employment income as an also-ran source of wealth. "People are realizing their job is their real source of financial stability," says Ellison, "that they have to live within the means of their job, not within the means of their assets. We're relearning how to create wealth."

As we do this, we'll start looking at our jobs differently. If that thing you do at the office every day is suddenly your sole financial lifeline, you'll approach it more cautiously. When you've got only one chip left, you're much less willing to put it on the table. In this new era, a predictable salary is more appealing than the chance of scoring big with bonuses and stock options. And having a government job — one of the last bastions of security — looks even better. One day soon you might find yourself perusing a list of the fastest-growing, best-paying professions, trying to picture yourself as an actuary. And instead of spending thousands of dollars to build a new deck, you're more likely to use that money to take a class.

Careers expert Dick Bolles sees another shift coming. If as a society, we turn our attention back to work — if we dote on our jobs as much as we did on our homes and portfolios in an earlier era — then we'll have to start asking deeper questions about why we do what we do. In December, Bolles noticed that a book he wrote in 1970 was back on the best-seller list. What Color Is Your Parachute? is about job-hunting and career-changing, but it's also about figuring out who you are as a person and what you want out of life. "Why are people rushing out to buy a book that talks about more meaningful work?" asks Bolles. "They're realizing they have to rethink work if they've got no Plan B. It reframes the whole issue of, What type of work am I willing to do?" [More]

This is why I think successful farmers will outsource LESS of their business activity, contary to the ag media paradigm of a team of experts informing every decision.  At some point the producer simply becomes a general contractor arranging for subs to do work.  It strikes me as better plan to constantly invest in in-house human capital via education and expansion into services now "off-shored".

In other words, farmers who can do double entry accounting, spot nematodes, program yield monitors, and troubleshoot hydraulic systems will have the human capital to compete more powerfully with those who hire out.  I know, the constant promise is such service providers "more than pay for themselves", but absent any serious effort to try, we never really know.  I think it's worth testing, as I have run into several producers whose in-depth knowledge far surpassed hired expertise.

At the very least, cooperative efforts between even competitors to share experise could be another tactic. This captive-capacity approach could be the core of farming companies I think will arise to dominate grain production here in the US.

For individuals, work will be the new "wealth" for the near future.  [I just realized this new axiom implies that staying healthy then becomes absolutely paramount!]

This imperative to make your human capital as deep and high-utility as possible. While specialization may still be a strategy, being able to adapt and take on different types of work could be more career-stabilizing.  Especially on farms.

Lo, they are always with you...

I refer, of course, to the poor and unemployed.While the Bible does not actually mention "unemployed", it appears that admonition could be the singular characteristic of the recovery from this depression.  Call it the curse of productivity.

Yet amid this carnage there is one thing that, surprisingly, has continued to grow: the paycheck of the average worker. Companies are slashing payrolls: 3.6 million people have lost their jobs since the recession started, with half of those getting laid off in just the past three months. Yet average hourly wages jumped almost four per cent in the past year. It’s harder and harder to find and keep a job, but if you’ve got one you may well be making more than you did twelve months ago.
This combination of rising unemployment and higher wages seems improbable. But, as it turns out, it’s what history would lead us to expect. Even during the early years of the Great Depression, manufacturing workers actually saw their real wages rise, and wage cuts have been scarce in every recession since. Oil and wheat prices may rise and fall instantaneously to reflect supply and demand, but wages are “sticky”: even when the economy goes bad, it takes a lot to make them fall.
It’s not because businesses are generous that wages are sticky; it’s because employers are worried. In part, bosses are afraid of what economists call “adverse selection”: if they cut wages, it’s the least productive workers who would be the most likely to stay, while the best workers would start looking elsewhere. (Even in a weak economy, businesses still compete for talent.) In a 1997 study of almost two hundred employers, the economists Carl Campbell and Kunal Kamlani found that the threat of losing their best employees was a major reason that bosses didn’t cut wages.
Even more important is the impact of wage cuts on morale. After the 1990-91 recession, the economist Truman Bewley interviewed managers and labor officials at more than two hundred companies and found that most believed that wage cuts wreck employee morale and eat away at productivity. Whatever money they’d save by cutting wages, bosses assume, would be cancelled out by the decline in effort and the breakdown of trust that wage cuts would create. Not everyone believes this: in the past month, both Hewlett-Packard and FedEx have announced plans for pay cuts. But generally, when sales and profits drop, wages aren’t cut, even in firms undergoing layoffs. Of course, layoffs don’t exactly help morale, but, as one of the bosses that Bewley interviewed coldly put it, they “get the misery out the door.” Cutting wages keeps the misery around. [More of a great, but sombre outlook]

My read on this phenomenon is very bad news for rural areas distant from service sector, high-skill jobs. What will be left in manufacturing are extremely technical jobs or pure entry-level labor, I imagine. Worse still, the ladders connecting these two levels will be few and far between.

There is considerable political cost as well. Unemployment benefits will be needed to cover more folks for longer periods than we suspect. Considering how few jobs were created in the last expansion, it is hard to see unemployment numbers bouncing much at all.  Compounding this is the effect of desperate business managers trying everything to lower costs by decreasing headcounts with technology.  Critics of policy will be able to point to high unemployment numbers long after GDP has started to rise. We could even see a resetting of the lower bounds of accepted unemployment.

One thing that could help is the seemingly inexorable march (slide?) toward severing health insurance from employment.  Even those currently covered will likely face cutbacks in employer contributions, and too many will see such benefits phased out.  If insurance were transportable and separate from employment, employers might look differently on re-hiring laid off workers.

Not do I think agriculture will be immune from this aspect of the recession. As our productivity skyrockets, higher commodity prices are unlikely to raise farmer numbers, except in the agrarian sector.

Our US car problem explained...

Megan McArdle has the best Auto Industry 101 post I have read.  If you have 10 minutes to spare, this lucid summary provides a good background for understanding what is happening.  Some key grafs (but please read the whole thing).

I will now attempt what I think is a fair rendition of Detroit's history over the last fifty years.    In the early 1950s, for various reasons Detroit developed a cozy three-way oligopoly.  The UAW developed a cozy monopoly on supplying labor service to that oligopoly.  In some ways, the UAW helped sustain that oligopoly.  If you're a big company whose quality suffers, you have problems.  But if you have a union making sure that labor quality cannot vary across the industry, you don't need to worry that your competitors will make a better car.  Detroit competed on styling and power, not reliability or price.
...
Detroit should have reacted, I'm sure, by making smaller cars.  But smaller cars were harder to make for Detroit.  Buyers thought of them as a non-premium product, which meant they wouldn't pay for the lucrative options packages.  And because they used fewer materials, the labor component became a relatively larger part of their cost.  Labor was where Detroit was least competitive.  According to the automotive analysts I've seen, Detroit still loses money on small cars like the Ford Focus, which are sold at a loss to help make Corporate Average Fuel Efficiency numbers come out.
...
But perhaps more importantly, Detroit turned from making money on cars to making money on financing.  Detroit didn't make a big profit by selling you a Ford Taurus.  It made money on financing your Ford Taurus; often, the car was sold at a loss in order to get the finance business.  The Big Three were banks manufacturing cars as a loss leader.
...
They also provide capital for selling cars.  Dealers have their own independent credit lines, which they use to buy cars, advertise, and so forth.  Dealers may be parasites on the body public 95% of the time, but right now, they're probably helping keep the Big Three out of bankruptcy by carrying unsold inventory, not pushing them deeper into it.

Spoiler: her conclusion is not a happy one.

Aside from being able to opine knowingly at holiday parties and farmer meetings, what do the auto industry death-throes mean to rural America? My guesses:

1. Big pickups will have many fewer models and cost a fortune. 
2. We're going to lose small dealers, like mine in Chrisman. We will travel farther for service and be more hung up when cars break down and the towing fee is $200.
3. Rural living will lose some attraction.
   
4.  I think we'll buy vehicles from now on based on three things: reliability, reliability, reliability. 
5. In more of a reach, farms located near the fringes of metropolitan centers will be worth slightly more because of this access advantage.
6. The loss of ad revenues from local dealers will be fatal to local papers and school scoreboards.
7. An astonishing number of small farms supported by auto-industry wages (especially small parts suppliers) will be subsumed into larger operations.

While this sounds not so good, I now accept it is unlikely Detroit can survive.


[John's World: All Posts]

Kids today, yadda, yadda...

I was enjoying Moe Russel's presentation to the IFAO this morning. While he and I are in different parts of the spectrum on some issues like land ownership, he make a powerful case for his analyses of farm profitability.

One point that hit home for me was how attracting, developing and retaining the best people possible could soon be more important than capital, if it is not already. [In the past two weeks, as plans for my son Aaron to return to the farm have become concrete, I awake every day to unforeseen advantages and possibilities his education, experience and energy can add to the farm (and our lives). I think Jan and I have been undervaluing this happy future both to prevent being disappointed and because we simply had not thought it through enough.]

But the trouble is the people we need and are adding aren't sensible 50-somethings. They are (shudder) young people with silly ideas that don't agree with Baby Boomer Holy Writ. We're not the only business struggling to manage these entirely-too-energetic yahoos. So maybe we should extract some lessons from what other industries are learning.

5. Don't conceal, communicate. Young people in business today crave feedback and interaction with their peers and managers, more so than previous generations did. When researchers at professional staffing firm Hudson (HHGP) conducted a survey of 2,000 employees, they found striking differences between generations in their attitudes toward their bosses and co-workers. Twenty-five percent of workers who fall into the Gen Y category consider it important to get feedback from their bosses at least once a week. However, only 11% of baby boomers desire that level of communication. Young employees also want greater social interaction with their peers and supervisors. Maintain an open, consistent dialogue and you will win their loyalty.

Young people fall into a category I call the "EmpowerME Generation" because that is exactly what they are asking from their employers—to be empowered. The 2008 election is proving that young people can be engaged when they feel as though they are making a difference. The same holds true in the workplace. [More of a very helpful article]

Agriculture has tradtionally valued people the same way as draft horses. We admired more than anything "the good worker". As the physical load plummets in farming, we'd better start recruiting for other reasons than being able to stay in the tractor saddle for 18 hours straight. Hard work is now just one criteria.

More importantly we'd better upgrade our management savvy if we want to optimize our return on good people, IMHO.