Avoiding Long-Term Commitment: The New Job Market

I was surprised to learn that most college presidents last about six years before moving on. A friend, who consults in the space, explained, “in many institutions, it’s just an impossible job.” Browsing through my LinkedIn connections, my first connection (his last name begins with “A”) is Len, a PR guy. Len has occupied nine different jobs since 1986; his longest stint was 6 years, and in today’s marketplace, that seems to be both (a) rare and (b) a long time. The February, 2012 issue of Fast Company ran an article entitled “The Four-Year Career” and declared “career planning” to be “an oxymoron.” The article points out that the average U.S. worker’s median level of job longevity is just 4.4 years.

The job market can be enormously frustrating, but deep down, most people understand that the economy is shifting–and that companies require employees for a period of years, not decades. In five years, Facebook has increased its her base from 10 million to 800 million; the first million Palm Pilots sold out in 18 months, and the first million iPhone 4s units sold in 24 hours; eBooks accounted for 1% of consumer trade books sold in 2008, and now, the number is over 20%. As the pace of change accelerates, the need for the same employees in the same seats evaporates. And, to counterbalance, as the pace of change quickens, the reasons why an employee would want to remain in the same seat for, say, five years, become less compelling for individuals in pursuit of active, productive careers.

But wait! There are at least two more pieces to the puzzle.

Cheryl Edmonds, featured in the Fast Company article about Four-Year Careers. To read the article, click on Cheryl’s picture.

The first is career switching. Not job swapping, but wholesale shifts in careers. Returning to the Fast Company article, Here’s Cheryl Edmonds, age 61, who shifts from engineering (1977) to a retail art business (1988) to corporate marketing at HP (1995), then heads to China to teach English (2009) before landing a fellowship with Metropolitan Family Services in Portland, OR (2011) in hopes of finding a new career in the nonprofit sector. Whether the person is 30 or 60, we’re seeing lots of these stories–people navigating the career marketplace as they might choose their next dog (whose longevity is likely to be longer than any current job), or vacation.

The second missing puzzle piece is formal education. Old thinking: go to college, train for a career, get a job, go up the ladder. Now, not so much, certainly not for a large population of liberal arts majors, and nowadays, even law school graduates are encountering a much-changed market for their trained brains. How to provide a proper college education for the likes of Cheryl, above? Marketing major? Engineering major? Liberal arts major? Get a degree, work for a few years, get another? I know a young woman whose college debt exceeded $100K, paid off half of it by taking a corporate job in supply chain management (thrilling!), hated it, sold real estate for a minute-and-a-half, then ended up in nursing school where she picked up a new $50K in debt to add to the unpaid $50K from her first degree. So here’s a system that’s not working very well at all.

On the positive side, all of this tumult leads to a far higher degree of personal control over one’s life than ever before. It also leads to a way of thinking that is counterintuitive for many Americans–if you are going to enjoy this degree of control, you need to think differently about your financial expectations, and about the management of your money. Multiple jobs in a single industry–you can expect to earn more money with every step up the ladder. Multiple careers–you will experience lateral steps, and you may earn less money in the next job, perhaps for a while, perhaps for a long time. (Freedom is not free.) For the entrepreneurs and business wizards among us, the constant jumps present fabulous opportunities to build wealth. For those who do not want their lives to be dominated by work, for whom a 40 hour week is more than enough, the less-fluid government and nonprofit sectors may be better places to work, but even employers are beginning to think twice about the ways they have operated for so long.

Success! Good Health! Longevity! Fabulous Children!

You can do it! You’ll need a college degree and you’ll need to move to a place where 21st century America’s promise shines. Seattle, the SF Bay Area, New York City,

Boston, and the ring around Washington, DC.–those are the places where innovation is held in high esteem and is most likely to be funded so that new companies can be born, grow, and change the economic picture for employees, shareholders, and those smart enough to live nearby.

These are the places where venture capitalists fund big opportunities, and if a company seems promising, a VC will often require a move to, say, Silicon Valley, or not to fund the company at all. The “thickness” of the job opportunities in the Silicon Valley (and a very small number of other places), and the thickness of people with the necessary skills to suit those needs, not only attracts the best (and highest paid) people to these centers, where their high incomes tend to generate more jobs for the local economy (usually with salaries that are higher than even unskilled high school dropouts will find at home). If you’re an attorney, you’ll make as much as 30-40% more if you work in these areas than in an old rust belt city. The same is true for cab drivers and hair stylists.

Much has been made of Google’s employee perks; they won’t play in Hartford or Indianapolis, but neither of those places, nor most other American cities, see the kinds of financial results and spillover effects in the community enjoyed by the area around San Francisco. This is becoming the area that drives the American 21st century. And it’s very difficult for other cities to get into the game.

Author and UC Berkeley Professor Enrico Moretti has just published a book that presents a compelling picture of the much-changed US economy. The title of the book, The New Geography of Jobs, undersells the concept. Yes, if you can, you should move to any of these places, where you will make more money than you will at home–regardless of whether you are a high school dropout or a Ph.D. You will probably live longer, remain healthier, provide a better path for your children, live in a nicer home, have smarter friends, smoke less, drive a nicer car, you name it… the American dream lives large in San Diego, but in Detroit or Flint, Michigan, it’s gone and it’s not likely to return any time soon.

Average male lifespan in Fairfax, VA is 81 years. In nearby Baltimore, it’s just 66.

That’s a fifteen year difference. This statistic tracks with education attained, poverty level, divorce rates, voter turnout (and its cousin, political clout), lots more.

Want to remain employed? Graduate from college.

Nationwide unemployment rates: about 6-10% for high school only, 10-14% for incomplete high school, 3-4% for college graduates.

College degrees matter…far more than you might think. In Boston, with 47% of its population holding college degrees, for example, the average college graduate earns $75k and the average high school graduate earns $62,000. By comparison, Vineland NJ–just outside Philadelphia in South Jersey, has just 13% college graduates, and a college graduate earns an average of $58,000, with high school graduates at $38,000. Yes, it costs less to live in Vineland, but over a lifetime, people who live in Vineland are leaving hundreds of thousands of dollars on the table, perhaps as much as a half million dollars over a lifetime.

Real cost of college, including sacrificed employment: $102,000. At age fifty, average college graduate earns $80,000, but average high school graduate earns $30,000.

If a 17-year old goes to college, he or she will earn more than a million dollars lifetime. If not, it’s less than a half million.

What’s more, 97% of college educated moms are married at delivery, compared with 72% of high school-only grads. Just 2% of college-educated moms smoked during pregnancy compared with 17% with a high school education and 34% of drop-out moms. Fewer premature babies, fewer babies with subsequent health issues. Almost half of college graduates move out of their birth states by age 30. By comparison: 27 percent of high school dropouts and 17 percent of high school dropouts. The market for college graduates is more national; the market for non-grads is more local.

Caught in the middle? The best thing you can do is hang out with people who are pushing their way up the productivity curve. That is, MOVE! Leave the town where things aren’t happening, and take a job, almost any job with growth potential, in a place with high potential.

While the arguments about fencing lower-income immigrants out persist, most people earning graduate degrees today are immigrants. And a high percentage of people who start significant new businesses, funded by venture capital, are first generation Americans.

Today, an immigrant is significantly more likely to have an advanced degree than a student born in the US.

Foreign born workers account for 15% of the US labor force, but  half of US doctorate degrees are earned by immigrants. Immigrants are 30% more likely to start a business. Since 1990, they have accounted for 1in 4 venture backed companies. When they start a new business, they generate high-value jobs, which brings more money into the community (not any community, only the ones with a thick high-skill / high value workforce and a thick range of desirable jobs), and the people who fill these jobs generate more jobs in the retail and services sector, jobs that pay more in the high value areas than they do at home.

A century ago, investment money went to Detroit for its car industry, and to the midwest for productive factories. That era is ending. Innovation in the health sciences, technology, software, internet, mobile, and other fields is the driver of American productivity–but not everywhere. Clusters attract the best and the brightest from metros without the necessary thickness, leaving lesser places with fewer people who can make big things happen.

There is so much more here (sorry for the long blog post, but this is a very powerful book). We need to generate more college graduates, especially more men, and especially more people with STEM expertise (science, technology, engineering, math). We need to do a far better job in educating and creating opportunity (including opportunity for mobility) among those with fewer advantages. We’ve got a lot of work to do. First step: read the book!

1 in 25 Work as Creative Pros

Above, an elegant way to think about the global creative economy, as presented in a 400+ page United Nations report.

1 in 25 people–that’s the revised figure for 2010–work in creative industries in the U.S. More than doctors, lawyers, even accountants. Industry sectors above, details below.

In the United States, roughly 150 million people work full-time. Six million of us work in creative professions. We’re writers and performers; musicians and visual artists; marketers and strategists; architects and specialists who invent, improve, or bring ideas to life. In total, more people work as creative professionals in the U.S. than doctors (700,000), lawyers (800,000), accountants (1,300,000), and engineers (1,600,000) combined. The number of creative professionals exceeds the number of teachers (3,500,000 teachers pre-K through high school, plus 1,700,000 more who teach in colleges and universities).

Our output–which provides employment for lawyers, accountants, executives, retailers, and many others–is responsible for more than ten percent of the U.S. Gross Domestic Product.

A reasonable global workforce estimate would exceed 10 million creative professionals. Nations with significant creative economies include Germany, the United Kingdom, France, Italy, the Netherlands, Ireland, Japan, China, India, Canada, Australia, and, among countries with developing industries, Mexico, Thailand, Indonesia, Argentina, Singapore, and Chile. According to the United Nations Creative Economy 2008 report, the export value of creative in 2005 was over $300 billion, or about 2-3% of the global economy. (Yes, I am reviewing the 423 pages of the 2010 report to update these figures–overall, trends are up).

The long list of creative industries was nicely summarized in the 2008 U.N. report, presented at a United Nations Conference on Trade and Development. The orange version, above, makes it all that much more clear.

Within each of these clusters, the professional model is similar. Projects are developed, produced, and distributed. Mostly, revenues are generated through direct transactions with individual consumers (movie admissions; DVDs; iTunes downloads;physical goods such as jewelry), sometimes through subscriptions; or by advertising to consumers who receive goods and services by paying only a modest transaction fee (magazine subscriptions), or no fee at all (most internet sites; broadcast radio and TV).

You can download the 2010 UN report here. (Yes, I will update my 2008 numbers when time permits.)

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