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Thursday, February 17, 2011

Endangered Jobs & Needing Innovation

There is a very interesting (if obvious) editorial in today's Wall Street Journal by Andy Kessler, discussing whether people's jobs are "endangered species". In essence, Kessler is discussing how technology in particular is completely revamping the job market, making many jobs completely unnecessary while reducing the need for others. For instance, if you were a librarian or a stock trader ten years ago, there's far less of a need for your services anymore. Online trading and Google have eliminated the need and reduced the cost of performing those services. This change in the economics of our time matches up very well with the economics of the Jewish community.

Some of the best aspects of this overall economic change is that it forces innovation, competition, and ultimately, better prices and services. If one company cuts its costs, then it can keep the profits and that's it, or more likely, take those profits and expand the business, or reduce prices and pick up more business, the larger profits of which can then be kept or used to expand the business, or reduce prices and pick up more business... and so on. Even for those who have lost their jobs, while in the short-term this is very difficult (trust me), ultimately it allows them to be as innovative as possible, and seek out a way to shift into the new economy in an advantageous way. Scott Adams (yes, of Dilbert) had a great piece a few months back that noted The Perfect Stimulus is Bad Management: it pushes people to be innovative and creative, determine how best or better an industry or business can run, and pushes them as well to go do it.

At the same time, technology can't replace certain things (at least not yet). About a week ago, I was in a bank and thought that the bank manager's pitch to a customer was really interesting. She openly acknowledged that she couldn't beat another (online) bank's savings rate, a rate a full 1% higher than what they were offering - and yet still almost kept the customer from moving their money out. She shifted the banking industry into a customer service provider: "Would you be able to walk into the other bank and easily talk to a personal banker or manager, have someone to discuss your options with, etc.?" Banks traditionally are about helping people manage their money in the most efficient, money-making way possible; and yet now, this bank was offering customer service as a pitch over making money. But even then, it is about money to an extent: If someone has trouble with their bank and needs help, the instant access to a banker could easily make up for the 1% interest on a savings account - if it has $5,000 in it, that's $50 a year. There are certainly many people who would rather spend 15-30 minutes in a bank than 2 or more hours on a phone in exchange for $50 a year.

Sadly, while almost all businesses and most individuals embrace technology and its ability to cut down on costs, government is usually lagging well behind. Whenever it is suggested that a government move toward a more efficient system, there is an outcry of the number of government (or union, depending on the case) jobs which will be lost: Ignoring that essentially the argument is to continue forcing the people to subsidize unnecessary jobs and place everyone at a disadvantage. One of the best things President Obama has done is push for efficient use of technology, particularly in the medical fields, which have the thorniest privacy issues; hopefully this same push will be carried over to other areas as well. As Kessler notes as he breaks down the types of workers into types, "DMV employees and so many other government workers move information from one side of a counter to another without adding any value. Such sloppers are easy to purge with clever code." But by definition, government workers have no incentive to be efficient or to add economic value; merely to service what needs to get serviced while making sure to retain their own jobs and the jobs of their friends. There is almost no sense of "this is wasteful and must be eliminated" among government employees: It would not serve in their best interests to do so.

This theme translates over well to the Jewish community. While some places are working to cut costs, others work to increase revenues - stabilizing and protecting the jobs that exist within them. In the end, though, this can come back to hurt the community, through higher prices and less innovation: Tuition hikes; charities where large chunks of the money fund operations instead of the charity; etc. In addition, the formerly standard professions of Orthodox Jews, thanks to their perceived stability and reasonably good pay - doctors, lawyers, and accountants - are all being impacted negatively as technology and regulations make their jobs less needed or less well paid. We have far too many accounting and lawyer friends who are looking for jobs (or better jobs), and future doctors are already finding out that it's going to be far more difficult to pay off their loans. All of these factors point to a Jewish community which must start being innovative within itself (and fast), before the fallout severely impacts the infrastructure of the community. It's bad enough that living as an Orthodox Jew until now was so expensive and difficult for large portions of the community; but as things continue, unless we find a way to bring the costs of Orthodoxy way, way down we are going to find that Orthodox Jewry is no longer the middle-upper class life we like to believe it is (and hasn't been for a long time), but significantly down near the bottom after all is said and done.

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