In the age
of automation, what's scarce are problem-solving skills.
Readers
responded positively to my recent essay on the emerging economy and jobs: A Teachable Moment: to the Young Person Who Complained About Her Job/Pay
at Yelp and Was Promptly Fired
Many young
people are stuck in the purgatory of minimum wage and/or part-time jobs: that
raises the question: how do you get out of minimum-wage purgatory?
The conventional
answer is, "get another college degree." Perhaps
this once had some value, but this now yields rapidly diminishing returns due
to supply and demand: everyone else seeking an escape from low-wage/part-time
purgatory is pursuing the same strategy, so there is an oversupply of
over-credentialed job seekers.
As I
point out in my book on jobs and careers in the new economy, Get a Job, Build a Real Career and Defy a Bewildering Economy,
issuing 500,000 MBAs does not automatically create jobs for all those
graduates: credentials don't create jobs.
What
creates jobs are opportunities to earn high profits via developing profitable
skills. Not all businesses are highly profitable; low-margin
businesses don't make enough profit to pay high wages.
Take
a high-skill person and put them in a low-margin setting such as fast-food prep
(very fast-paced and hard work), and their labor can only generate a limited
value for the employer.
Value and
profits flow to what's scarce. Low-skill labor is not
scarce--it's abundant, hence the low wages paid for low-skill work. Workers
with credentials are no longer scarce, with the exception of physicians and
nurses and a few categories of advanced degrees such as computer science.
What's
scarce are opportunities to earn big profits. Those who have
never started a business or operated a business always assume a busy restaurant
(for example) is very profitable--but this is not necessarily true. A
restaurant with high rent, high labor costs and high overhead expenses could be
losing money even if it's filled with customers every night.
Not only
is it not easy to earn a profit, it's getting harder by the day. Rents
are soaring, permits and fees are soaring, regulationary compliance costs more,
taxes are higher, minimum wages are rising and competition in most sectors that
aren't protected by the government is fierce.
Employees
have to generate a substantial profit for their employers, or the employer will
go under. Even large corporations that report big profits are
slashing payrolls, trimming bonuses and benefits, and demanding more free labor
(though they don't call it that) from remaining employees. Executives who fail
to top profit estimates are sacked.
What's
scarce and what's abundant? Answering these questions helps us
understand the economy and why high wages and profits flow to what's scarce.
If
there's only one grocery store in town, access to fresh food is scarce, and
that store can charge a premium. If there is only one plumber in town, the
plumber can charge a premium equal to the travel time that would have to be
paid to plumbers in other towns.
In the age of automation, what's scarce are
problem-solving skills. Software and robotics are good with
set situations and routines, but not so good at responding to unique
situations. If someone wants a high-wage job in a profitable sector, one avenue
is to become a better problem-solver.
The best way to become a better problem solver is
to start a small enterprise yourself, because the entrepreneur--even the smallest scale
entrepreneur selling on Etsy or performing some service in the community--must
solve a wide range of problems on a daily basis.
Another way is to volunteer for
organizations that are woefully understaffed. A beginner will be given
responsibilities in these settings that would never be given to him/her in a
government or corporate setting.
The more you take on, the faster you learn
because you fail often and fail fast. Problem-solving is largely intuitive and
a function of experience and networking with those who can help solve the
problem.
This is the basis of the eight essential skills I recommend everyone acquire if they
want to exit low-wage purgatory.
A third way is to actively acquire
knowledge and experience in fields that are not within your chosen speciality.
Specialization is not necessarily the best or only way to develop scarce
skills; being able to cross boundaries and draw insights from other fields--
the opposite of further specialization--makes for better problem-solving
skills. Flexibility, adaptability and the ability to bypass rigid
boundaries--these are scarce.
Nowadays,
virtually every field requires good communication and collaboration skills.
Credentials don't generate these skills--experience is required. Many people
complain that they can't get the experience needed to qualify for a job, so
they puff up their resume/CV and lie about their experience.
The
better strategy is to get the experience and consciously set out to acquire
solid communication and collaboration skills--what's known as "soft
skills" as compared to "hard skills" such as welding or coding
Python.
As noted
above, there are two avenues: volunteer for an organization you believe in that
happens to be woefully understaffed, or start your own enterprise, no matter
how small.
What's
scarce and what's abundant? The answers are not always clear, but the process
of seeking answers will be helpful. Finding work you enjoy and developing
skills that are scarce--this is the way forward.
There
is more on these topics in my book Get a Job.
