Fourth Anniversary of Workinthoughts.com

Big day for my blog. I’m proud of what it has become over the last four years and what is still awaiting me.  We all get inspired and many of us translate that into a journal or a twitter entry. I’ve grown through my critical thinking and writing discipline. Assembling ideas and making it relevant either through timeliness, story, or research for the reader is fun but it’s hard work. It isn’t easy to focus and concentrate on a topic that others will learn from.

With that said, I’m changing gears with the blog. It began a few months ago when my entries started to be a bit more long form. Twitter does a great job at the short form and I’ll incorporate it as an accompanying communication channel but my main entries will continue to be more in depth. Probably more spaced out too.

I like creating engaging entries with illustrations, videos, and meaningful explanations and stories. I’m going to push for more interaction via facebook, twitter, linkedin, interviews, guest entries, and comments. I already have a new format, which will continue to change, and I’m going to mature the site as a platform. We’ll see where it goes.

Working Thoughts 6/27/07

1st Blog Entry

Working Thoughts 6/27/08

First Year Anniversary of Working Thoughts

Working Thoughts 6/27/09

Two Year Anniversary of Working Thoughts – Part 1

Two Year Anniversary of Working Thoughts – Part 2

Working Thoughts 6/27/10

Three Year Anniversary for Working Thoughts

6.5 Graphs Outlining the US Economy

I’m in a room that’s 8 feet by 10 feet. It’s just me. There’s a small box playing loops of TV shows, but I’m ignoring it. The temperature is 95 degrees but its cold in here. And I have a lot to think about.

I know I’m going to pay for it. Situations like this require penance and it’s going to cost me. It’s part of life though and inevitably I’ll be back.

The bill was a shade under $200. Frankly it could have been a lot worse. My car hasn’t been serviced in a year; it needed an oil change, inspection, tire rotation, and the radiator hose had a hole in it. I paid for the car, but I got time to think.

This cycle of activity drove me to consider the business cycle. It normally looks like a sound wave with peaks (good times) and valleys (recessions).

Are we still in a recession? Are we in an initial recovery? Maybe even an early upswing? Chris Stuart wondered the same thing in his write up Why We’re At The Early Upswing Stage In The Business Cycle.

I predicted the recession after observing a lack of income appreciation and buying patterns changing in October 2007 and although this is a classic supply and demand cycle where aggregate demand is lacking it feels more structural. Structural means the skills needed in the employment arena are lacking in the environment, so a transitional period of training is required. Instead of a sudden shift in skills we have an elongated one. Globalization dramatically changed supply chains and created liquidity in the job market. Goods producing jobs like manufacturing are now feasible almost anywhere. And the education advantage of the US is no longer prevalent.

This is forcing the US to consider it’s jobs strategy, or at least create one in the first place. Many of the assumptions about the viability of the US worker are no longer true. And think about the US consumer. Will they always buy? Like an alarm clock introducing the morning, the US worker and US consumer realized better days are not guaranteed. People are starting to slowly de-leverage. It’s a huge adjustment in the way people live their lives and it will take time. The debt burden is simply too great.

So if this cycle is a classic supply and demand recession and the US consumer isn’t going to buy (low demand) then isn’t this going to take awhile? Yes, the rest of 2011 and 2012.

Here’s my outline of the timescale:

Jobs will be tepid but consistent for the rest of the year and next. Companies large and small are getting creative with their resources. Many are investing in equipment rather than people (you don’t need to buy health insurance for an industrial printer), but the gains will be positive. There is no double dip recession.

The best workers are beginning to jump to other opportunities. They’ve installed micro-innovations for their current employers, but since volume has been low these improvements haven’t knocked anyone’s socks off. But they will.

So after a period of discipline, brighter days are ahead.

——–

I wanted to pull together some graphs showing what’s happened since the beginning of 2008. Below are four time-scaled illustrations showing the situation with jobs.

  1. The first one is the overall jobs report. It shows how far we have to go to balance out the lost jobs.
  2. The second one is a growth rate of jobs for the private sector as they relate to Service Producing and Goods Producing industries. Goods Producing encapsulates manufacturing and construction, two of the harder hit industries. 
  3. Since the ratio of Service Providing jobs and Goods Producing jobs is 5 to 1, I wanted to show the relative impact and that is what the third graph depicts.
  4. The last one the Dow Jones during the same period. It’s the index that most people focus on as a reflection of the stock market.

Lastly, Wired did some research with Linkedin.com about what terms people were using in their titles after they changed jobs. The results below reflect a pool of 7 million linkedin users and a good indication of what jobs are in need in this day in age. But remember, people still need an oil change.

Working Thoughts 6/15/2010
We Respond To Cues Very Effectively

Working Thoughts 6/15/2009
Resilient Attitudes are Rare

May 2011 Jobs Report and Wages

Here are the job market and compensation numbers for April 2011 (based on the job report):

Net gain of 54,000 jobs in the month (revised to a gain of 25,000 jobs)
  • Analysts expected an overall gain of 180,00Private sector payrolls increased by 83,000
  • Private service producing industries added 80,000 (194,000 last month and 154,000 the month before
  • Goods producing industries gained 3,000 (38,000 last month and 40,000 the month before)
  • The US has added 908,000 private sector jobs this year and 2.1 million since the start of 2010
  • April was revised to a gain of 232,000 from an original reading of 244,000
  • March was revised to a gain of 194,000 from an original reading of 216,000 and a revision of 221,000
  • Revisions subtracted 39,000 jobs from earlier readings
  • Payroll processing company ADP said private-sector payrolls grew by 38,000 in May
  • downwardly revised 177,000 increase in April
  • economists’ expectations for private sector job growth of 170,000 for the month.
  • the manufacturing sector cut 9,000 jobs
  • the financial services sector lost 6,000 jobs
  • the construction sector cut 8,000 workers
  • the broader services sector added 48,000 jobs overall
  • McDonald’s hired 62,000 workers, which are part of a subcategory called food services. Without this hiring spree, the report could conceivably be a neutral report (no jobs gained or lost)
    In April, the number of job openings was 3 million, down a touch from 3.1 million in March
    About 13.9 million people were out of work in April
  • 6.2 million had have been jobless for six months or longer
    45.1% of the unemployed are long term unemployed.
  • Employers announced plans to cut 37,135 jobs in April, down 4.3% from May 2010
  • 1.8% increase over April’s 36,490 planned job cuts
  • comparing the first five months of 2010 to 2011 shows 2011 has 21% fewer announced job cuts (things are bad, but not as bad as last year)

Unemployment rate rose to 9.1%

  • Analysts predicted it would remain at 8.9%
  • The labor force
    participation rate is 64.2% (66.5% is average to good) – unchanged for the fifth straight month
  • The employment to population ratio is 58.4% – No change
  • The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), rose to 15.8% from 15.9% last month
  • PMI, a measure of manufacturing pace, is 53.5% and the 22nd consecutive month of readings over 50 percent. Anything above 50% means the machines are running. This is a significant drop from April’s reading of 60.4%
  • Service sector activity rose to 54.6% (52.8% last month and 57.3% before that and down from 59.7%). It was the 17th straight month of growth


Specific Segment Job numbers:

  • Manufacturing lost 5,000 jobs
  • Construction gained 2,000 jobs
  • Retailers lost 8,500 jobs
  • Leisure and Hospitality Services lost 6,000 jobs
  • Government sector lost 29,000, 28,000 was in local government
  • Education and Health Services grew by 34,000 jobs
  • Health Care and Social Assistance grew by 27,200
    • Professional and Business Services grew by 44,000
    • 1,200 jobs lost in Temporary Help

Wage (can be revised):

  • The average hourly earning (seasonally adjusted) is $19.43 – up six cents from last month and 11 cents over the last two months
  • Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 33.6 hours, no change again

Bureau of Labor Statistics

When Ideas Come Together

I sit here and type. Sometimes I have inspiration and sometimes its a slog. I do it because I love when ideas come rushing in. It’s like the end of the Usual Suspects when everything comes together. Its powerful and rewarding.

Good mysteries are fulfilling because we have to hunt for clues. They are rarely obvious and they are as much a study of logic and circumstance as anything else. It’s in our DNA to problem solve this way.

For this reason I’m optimistic about the long term future. The connectedness of the world is bringing figurative detectives together, each with their own clues, to solve problems. Ideas have a better chance to grow. Incremental improvements are good, but we are after leaps forward.

Take this chart from CNNMoney.com about Cisco’s prediction on the expansion of the internet.

And check out these videos from Steven Johnson about where ideas come from. The first one is a short artistic explanation and the second is a TED Talk. I really enjoy the story at the end.

–>http://video.ted.com/assets/player/swf/EmbedPlayer.swf

Defining the Future for the Class of 2011

Congratulations to the class of 2011. You’ve earned the gratification of moving your tassel from one side of the cap to the other.

What does the future hold? What is out there? You’ll be told to find yourself, follow your passion, and chase your goals. And many of you will wonder what those are. There’s debt, perhaps an entry level job, and monthly bills. Before you can commit to your boundless dreams you already have these torments and everything that goes along with it. Chances are you’ll be figuring out credit cards, bad bosses, and hung over early morning meetings. Every day is a new day.

If you learned anything in school, I hope you’ve learned how to think. To ask why? Anyone can follow directions, good thinkers are people who understand why they exist. Great thinkers design the instructions. What is the path? What are the steps? “If this happens, then do this” and the decision tree associated with it. Working through these scenarios develops an ability to cope with complexity. Said another way – for greater enlightenment, do you want a happy meal toy or a jet engine?

And I beg you to create something. The world is a better place when people work to assemble rather than tear apart. If you’re a business person I’d start with thinking about value proposition. Think about a situation and how things work together. What is the context for which a transaction operates? Consider the decisions people are making and the information they are using. What drives them to act and is the desired behavior? Is there a status quo? Have people accepted things as they are?

The world you experience is very different than the world I know. And that is good. There are generally two types of knowledge explicit and tacit.

  • Explicit Knowledge – is knowledge that has been or can be articulated, codified, and stored in certain media. It can be readily transmitted to others. The information contained in encyclopedias (including Wikipedia) are good examples of explicit knowledge.
  • Tacit Knowledge – involves learning and skill but in a way that is difficult to transfer from one person by means of writing it down or verbalizing it. Tacit knowledge can consist of habits and culture that we do not recognize in ourselves. I can tell you how to ride a bicycle, but you won’t know how until you learn to balance.

Graduation means you’ve probably spent close to $1,000 on books over the last few years acquiring explicit knowledge. You’ve studied in your dorm room and memorized facts about amortization. You’ve read what the top of Kilimanjaro looks like.

Now is the time to look yourself. It doesn’t have to be the top of a mountain, a high point works just fine. Experience the edge and feel the risk. Trace the path you’ve taken to this simple point. Once you’ve climbed one high point, you’ll climb another and another.

Nothing worth doing is easy and life isn’t fair. Your experience is unique, always ask why, and focus on creating something, anything. And remember, every day is a new day.