Personnel Shifts: Continuous adaptation to the future

 

     If you enter into a grocery store (my son and I do so every Sunday at 6am to beat the crowds), you will have noticed that a growing number of "self-checkout" systems ("SCOs") are available. Sometimes these SCOs are oriented towards a limited number of items ("15 or under"), sometimes they are an alternative to the regular full-service checkout lanes. Occasionally, when I have only a half dozen items, or so, I am led away from the full-service lane (by a store employee) over to an SCO. I almost never voluntarily choose them -- because I know that the number of human cashiers are reduced as a shifting of resources.

     Is this bad? Bank tellers shifting to ATMs and online banking? Grocery store cashiers giving way to SCOs? The general shift from "brick-and-board" physical stores to online shopping or automated inventory and checkout systems? Automated package, and luggage, sorting at parcel and luggage handling locations? And so on and so on.

     There are shifts in the economy and work force taking place. Many of these shifts are due to automation. There are a couple of primary effects of this ongoing shift. First, the lower skill jobs are disappearing -- but higher skill jobs are being created. This is not 1-to-1 (1:1). For every five lower skill jobs that are replaced by automation, one high skill job is created. I am making up this ratio. It will depend on the exact industry and other factors. But it is still the situation that fewer high skill jobs are created than are lost from the lower skill job pool. That's a large part of the reason why there is a shift towards automation -- to save labor costs.

     The second shift can be interpreted from the above but it is rarely openly acknowledged. As more and more lower skill jobs are replaced by automation, the number of jobs that lower skill workers can qualify for -- and, especially, that pay a living wage -- goes down. There are unemployed people who do not qualify for a position in which they can support themselves and that number increases every year.

     Educate them! True, that can make more people, who used to be lower skill, able to join the higher skill work force. But, as the number of people needed for businesses continues to decrease, we end up with more people without positions to occupy. Education, by itself, only gives the possibility of having more higher skilled people without jobs rather than lower skill people without jobs.

     One possibility is to spread existing work around to more people. If each position in the economy occupies a person for fewer hours, then the economy allows for work by more people, If a company needs a labor force of 800 people-hours per week, there can be 20 people working 40 hours/week or there can be 32 people working 25 hours/week or even 40 people working 20 hours/week. Note that these people still need to be making living wages (and, with their education and training, likely will expect more).

     Another possibility is for people to set up businesses for themselves! That is happening and it may all work out. Certainly my crystal ball doesn't have fewer cracks in it than anyone else's. Such a shift requires economies moving away from physical consumerism; factories will continue to have fewer and fewer needed workers and "brick-and-board" businesses will move away from lower skilled personnel. Note that moving away from physical consumerism also has side-benefits for the environment.

     These newly invented businesses will have to deal with non-physical merchandise. Skills, learning, ideas, coaching, artistry, creativity -- a new paradigm for the economy. These new entrepreneurs need different training, and ways of thinking, from that which is presently being presented within the education system. Learning facts becomes less important. Learning how to research, and interpret, facts becomes vital.

          Jobs that are not cost-effective to automate (at least we are not at that economic tipping point as of yet) will still exist for the indefinite future. And there will continue to be people who will not, or cannot, obtain skills that will work within the new economy or the higher skill level traditional positions. But they cannot work 40 to 60 hours and still not be able to afford food, clothing, medical care, and shelter. It is a recipe of desperation. We may not often put people in jail for stealing a loaf of bread, like Jean Valjean in Les Miserables, but people who cannot succeed in living legally will find a way to live.

Economic Interconnectivity and Big Data

     The world economy is a huge set of interconnections. One type of job depends on other types of jobs; if a job type disappears it is likely to affect many other job positions. Scarcity of resources of one type can affect the prices of many cascading products. If the world does shift from fossil fuels to renewable energy sources, new jobs will appear and old ones will change or go away.
     The interconnectivity also causes great fragility as the world gets larger and there are more dependencies. Imagine, if you can, people waking up tomorrow and deciding that the Internet is no longer of interest (I can easily remember when it didn't exist) -- how many products would no longer have a market, how many people would no longer have a job, how would it affect others (advertising, for example -- and printed newspapers might surge back into dominance)?
     Once upon a time, I was interviewing with Google and, as part of the telephone interview, we discussed potential projects and interests. I put forth the idea that, since Google was well designed to integrate knowledge and had such massive data storage and access, they would be well able to create an economic model of interconnected occupations and salaries. At this point in time, I would like to also add in products and localized market prices.
     Why bother with any type of tool? Why not just make the change and see what happens? The main advantage of such a tool is to have a better ability to forecast the effects of policy changes. What really happens if minimum wage is increased to a living wage? What happens if the illegal immigrants who are largely responsible for hand harvesting of our fruits and vegetables are kept away -- what will be the effects on produce prices, truckers, grocery stores, and so forth? What jobs are affected if private transportation is minimized and public transportation maximized?
      Such a project would be impossible if every individual, unique job, discrete part, and location had to be tracked. Luckily, items can be aggregated -- 500 Blue F-150 trucks should only have a quantity value change over 1 Blue F-150 truck (but, at the same time, there needs to be a way of describing Red F-150 trucks without having a fully different item). There is a lot of work to be done and it would still be a difficult project but certainly within the capabilities of many of the larger data handling companies -- Google, Facebook, Amazon, IBM, Microsoft, ... What would be the Return On Investment (ROI) for such a project? It's really difficult to know but it would be a valuable service/project that should be of use to governments and businesses around the world.
     I would suggest architecting such  a project as an iterative accretion of data. Start with something relatively small -- a loaf of bread. The loaf of bread has a set of occupations associated with it -- baker, packers, delivery people, stockers, advertising, payroll, Human Resources, etc. It also has a set of ingredients -- flour, yeast, filtered water, possibly milk, salt, and so forth. Each ingredient has an amount which acts as a ratio of strength in the links to the bread. Each ingredient has its own delivery and production chain which each have associated costs and value. It would be considerable in itself but the greatest value would be the fact that it is still small enough to be thrown away. New links and new data structure values will be discovered to be needed as the database develops. Now do it over (iterate) with those better values and links. Do it again if needed. Now add butter to the bread and continue on.
     There are also usability concerns. The bread company may start off selling only white bread and then add rye bread -- each with their own percentage of sales. How does one substitute recipe ingredients? How do you change the dependencies and the ingredient ratios? What happens if a problem ruins the rye crop for the year? If modelling an auto, how easy is it to change the model from gasoline to electric? Not only is there a substitution of an "ingredient" but the interconnections to suppliers, dealers, raw materials (batteries, possibly lithium) change. The model must be able to be changed easily because modelling the existing situation may be interesting but comparisons are what gives the most value.
     How would you address such a problem? What do you see as specific practical benefits from such an economic model? Is there some subset of such a model already in existence that could be used as the core of expansion? How are unpaid people incorporated into the model, recognizing that the system falls apart without them -- even if they are not considered to be part of the Gross Domestic Product (GDP) or a paid occupation?
     While I find the project fascinating just from a theoretical basis, I keep finding more and more potential uses as I consider the matter.