Where have all the jobs gone? Part 2

Originally published in
Reader Weekly
June 10, 2004

Sorry, I can’t find “Where have all the jobs gone? Part 2” on this computer.  I’m at a coffee shop and will have to look for “Part 1” on an older computer.  It might be in an old email account.

I sympathize with Amy Hoff in her job hunting ("Where have all the jobs gone?" Reader Weekly, May 27, 2004).  I didn’t feel successful in my own search in 1999-2000, but then I didn’t put as much effort in as she has.  I do think we both may have been overly optimistic about opportunities.  A region the size of the Twin Ports will rarely have as many job opportunities as many of us would like.  It is almost impossible in a modern, complex economy.  Few employers want generalists who can learn on the job.  Either the job does require skills that require special training or the employer doesn’t want to pay for on-the-job training.  No employer is going to hire a liberal arts major to be a geologist, and some employers will not hire a person to work with left-handed widgets who has only worked with right-handed widgets.

She blames the job market as a reason “youth are leaving this area”.  I think many young people will leave this area regardless of the job market.

In 2004, about 3,500 students received degrees, diplomas, and certificates from area colleges(1).  There are about 86,000 people over 21 years old in the labor force in the Duluth Superior Metropolitan Statistical Area(2).  That means that area colleges are graduating enough students to replace every worker in 25 years.  If most people work for 40 years and if degreed students would not be interested in many of the available jobs, then many will have to go elsewhere to seek employment.  Besides many students came from elsewhere (why do we have a rental housing crunch) and don’t plan to stay in the area.

Even if there were jobs going begging, many people, raised here or not, would choose to move elsewhere.  There are certain jobs that will never be available here and people will move elsewhere to get them.  How many opera companies or oil exploration companies are there in the Twin Ports area?  Other people will move elsewhere because they want warmer climate or a longer ski season or …  And this is true for any area of the country.

I came from elsewhere to the Twin Cities, went yet elsewhere, came back to the Twin Cities, and then moved to Duluth.  I may or may not move to Brimson.  I have many friends and acquaintances that moved from elsewhere to the Twin Ports – from farm communities and from cities like New York and Chicago.

Other problems Amy Hoff cites are poor hiring practices, low wages, and high cost of living.  The indifference to prospective employees is not unique to Duluth.  Wages are definitely lower in Duluth but the cost of living is relative.  The cost of living is not as low as it has been in Duluth but it might not be as bad as elsewhere.  One 900 sq. ft house in south Minneapolis was recently listed for $200,000.

What can be done to improve the job situation in the Twin Ports area?  The simple answer is import more money.  Sound trite?  Let’s explore this a bit.

An area of 250,000 people or a million people or ten million people cannot be economically self-sufficient given today’s expectations.  Could the Twin Ports support an automobile plant if the only customers were local residents?  Autos have to be imported from elsewhere.  To import Rangers from St. Paul or Saturns             from Tennessee we have to export money. Since we can’t print money here we have to import it from somewhere else.  That means we either have to have goods and services to export or figure out how to import people who will spend their money here.  Once upon a time this was all covered with timber, taconite, and tourists.

The timber isn’t what it once was.  There may be plenty of aspen and spruce but the big pines are long gone.  Why is it that The Pinery on Lake County 2 with its 200+ years-old trees is an attraction?  Taconite is a replacement for the long-gone rich ore that made the Mesabi Range famous, and taconite has many competitors including scrap iron.  Tourists, bless them, are still abundant.  However, tourism doesn’t create high-value opportunities except for entrepreneurs.  The resulting jobs are retail; these are generally low-wage unless there are large commissions to be made.

One of the largest regional industries is health care, but that is almost a wash for importing money.  Most of the patients are regional and what money comes from outside the region is offset by insurance premiums and tax dollars going out.

Education is another large regional industry.  Students come to Duluth from all over the world but are there enough from outside the region to provide a significant “importation” of money?  Research done in the new UMD science building may provide some spin-off into an industry.  This bears considering, but can government officials do anything to influence this?

Manufacturing has been cited as a creator of good-paying jobs.  Cirrus is a good example of an expanding company both in itself and in the suppliers it supports.  But we have to remember that private airplanes are a unique product and most manufacturing is of commodities.  Commodities, be they agriculture or manufacture have many, many competitors.  Trying to attract a manufacturing company is a zero-sum game.  Duluth may attract a company from Wisconsin, but some other community will be working to attract companies from Duluth.  Communities just get into bidding wars subsidizing companies.  And companies enticed from elsewhere can go elsewhere just as quickly, especially if the managers have no stake in Duluth.

One good export industry is culture – literature, art, and music.  This area does have some successful writers, artists, and musicians.  Unfortunately, they are a small drop in the economic bucket and do not create a lot of additional jobs.  But here is a clue for other economic successes.  Why are these writers, artists, and musicians in Duluth?  Could it be that they like to live here?

It gets back to my old argument.  Why worry about attracting this business or subsidizing that business?  Create an infrastructure that supports any business – good transportation, good utilities, and consistent application of rules.  But more importantly, make Duluth a city that people from elsewhere want to move to.  If the range of people so attracted is broad enough, entrepreneurs will be part of that range.  They will figure out what businesses may be a good fit for this area and build them.  With roots established here, they will be likely to keep them here through good times and bad.

(1)    I added these up from graduating class figures in the Duluth News Tribune, May 8, 2004,

(2)    I derived this figure from U.S Census figures.  Go to http://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml and enter your community..  You’re on your own then.  You may also find some very depressing info about our area.

See also
http://magree.blogspot.com/2010/08/if-you-really-want-to-create-jobs.html
http://magree.blogspot.com/2010/07/have-good-paying-jobs-really-been.html
http://magree.blogspot.com/2010/05/did-jobs-ever-return.html
http://magree.blogspot.com/2010/03/jobs-times-they-are-changin.html
http://magree.blogspot.com/2009/11/dentistry-and-economy.html
http://magree.blogspot.com/2009/09/stop-creating-jobs-and-start-creating.html
http://magree.blogspot.com/2006/10/where-have-all-iron-range-jobs-gone.html

Square pegs do fit in round holes

i am reading No Ordinary Disruption by Richard Dobbs, James Manyika, and Jonathan Woetzel.  I am in the middle of the chapter “The Jobs Gap”.

The basic problem is that most work has changed from production or transactional to interactional.  That is, most jobs were making something or providing a direct service, such as a bank teller.  Now many jobs are interactional, such as a doctor or lawyer.  Some of these don’t require much training, such as home health aide; others require years to acquire.

Worse yet, too any employers look for overly specialized skills without looking at the person’s ability to learn.  For example, they want somebody who is proficient in Microsoft Word, but they won’t accept somebody who is proficient in Apple’s Pages. Duh! They are both word processing programs.  The skill of writing should have more weight than the tool of writing.  Maybe the person who knows Word has poor grammar, but the person who knows Pages has excellent grammar.  Who will be the faster learner?  Probably not the person with poor grammar.

Thus, the square person with skill in Pages could probably easily fit into the round hole of Word.  Unfortunately, too many people hire on the basis of what an applicant knows than on the basis of what an applicant can learn.

Job Skills Done Right

Many companies expect prospective employees to have the right "skill set" on day one and do absolutely nothing about creating prospects with those "skill sets."  "A recent study by the Minnesota Department of Employment and Economic Development found that the shortage of skilled workers is a chief concern among factory managers. But the study also found companies don’t offer competitive wages or train new workers to program today’s computerized high-tech factory machinery."

One company doing it right is E.J. Ajax & Sons Inc. of Fridley, a metal fabrication company.  Erick Ajax works with Dunwoody Institute in Minneapolis to find interns, to sponsor scholarships, and to hire graduates.

See "Fridley family firm E. J. Ajax is a model for training", Dee Depass, Star Tribune, 2013-03-31

You get what you pay for!

Did jobs ever return?

Did jobs ever return?
No, they never returned
And their fate is still unlearn'd
They may ride forever
'neath the halls of Congress
They're the jobs that never returned.

Actually, the fate of many jobs has been learned, but not by those in Washington who think their posturing and speeches are going to bring them back.

Changing technology keeps changing the jobs needed.  The railroads put lots of cart drivers out of business.  More powerful locomotives with more safety features moved more freight with fewer and smaller crews.  Computers reduced the need for typists and all kinds of other office help.  The Internet reduced the need for printing, sales people, and order processors.  I think most of us over 50 can make, in less than an hour, a list of 100 jobs that no longer exist or whose need is greatly reduced.

Politicians think that tax cuts or business incentives are going to bring jobs back.  But the hiring of the unemployed is going to be minimal.  More than likely the target businesses are going to hire people from other firms with the required "experience" or "skills".

That is another factor that makes creating jobs so difficult.  Once upon a time, companies hired workers with some general knowledge about the work and trained them on the job for the needed specifics.  Nowadays, if you don't have the required "skill set", fuhgedaboutit!  Some of these skill sets are so detailed that it is a wonder that companies find anybody.

See "The New Poor: In Job Market Shift, Some Workers Are Left Behind", Catherine Rampell, New York Times, 2010-05-12, "Dentistry and the economy", "Forget jobs, create opportunities",  and "Where have all the jobs gone?"