Jason talks a little a bit about what’s going on in the world today and touches on some subjects like fusion fuel, cool apps, and more. Later in this podcast Jason interviews John Challenger about employment growth and what are some of the hotspots in the United States. John Challenger is an expert in global outplacement and career opportunities. He is the CEO of the Challenger, Gray & Christmas firm. The firm conducts regular surveys and reports about the current state of the economy, like layoffs, employment, and executive compensation.
Key Takeaways:
5:45 – Fusion fuel is much more efficient and safer in today’s market.
8:40 – Every problem we’ve encountered, we’ve been able to solve with bonuses! With all the technology that’s going on today, it’s a great time to be alive.
10:45 – Jason loves the app called Fooducate. The app will scan the label and give you a grade as to how healthy the food product is and why.
15:30 – High speed trading is illegal and should be considered as insider trading.
17:00 – Jason Hartman is having a sale on his physical products. Check it out at https://www.jasonhartman.com
19:10 – Trainees who are part of the Little Rock Tour will celebrate a turkey dinner with Jason on Saturday, Nov 22.
21:40 – What areas of the country has good employment growth? Here’s a clue – The Mid West.
25:00 – Most of the job cuts we’re seeing today are from mergers and acquisitions and not from companies generating low revenue.
29:45 – There are so many jobs that don’t need degrees.
35:00 – The education industry is so overpriced in a world where students can just take their classes online.
37:45 – There’s some great robot technology going on. People are currently working on a robot to help minimize doctor mistakes.
40:10 – We’re making far more stuff with much less people.
42:00 – What are some of the hot spots geographically? Illinois, California, New Jersey, Arizona, and more.
Tweetables:
“We’re much more optimistic about where the economy is now compared to where it was 5 years ago.” Tweet this!
“I do like to know more about my food, but these food labels are so confusing. What would appear healthy is really not healthy.” Tweet this!
“The technology is changing what people need to do, which is why education is so important.” Tweet this!
Mentioned In This Episode:
- www.fooducate.com/
- http://en.wikipedia.org/wiki/Orthorexia_nervosa
- Flash Boys by Michael Lewis
- Michael Lewis interview – https://www.jasonhartman.com/cw-370-michael-lewis-stock-market-rigged-cenegenics-on-longevity/
- https://www.jasonhartman.com
- Meredith Whitney interview – https://www.jasonhartman.com/cw-331-fate-of-the-states-with-meredith-whitney/
- Fate Of The States by Meredith Whitney.
- www.challengergray.com
Transcription
Jason Hartman:
Welcome to the Creating Wealth show. This is your host Jason Hartman. This is episode 428, thank you for joining me for episode 428. Today our guest will be John Challenger and we’ll be talking about employment and different geographies and how that laying out across the land, but first of course, I have a few things for you. Number one, I keep forgetting to ask you, how do you like this publishing schedule we’ve been on recently? I’ll call it the high-frequency publishing schedule, because it relates to what we’re going to talk about in the intro section.
About high-frequency trading again. There’s some possible good news, I think the government is finally getting a clue and helping out us people, right? Maybe, we’ll see. We’ll see.
Yeah, we’ve been publishing every Monday, Wednesday, and Friday pretty darn consistently for a few months now and I hope you like it. Judging for the ratings and the rankings, we’ve definitely seen that you seem to be liking it. So, how do you like it? How do you like the frequent publishing schedule three days a week, every Monday, Wednesday, Friday? We’re going to try and keep that up.
We’ve got so much material to get out to you and we’ll attempt to do that. So, we’ll love to hear your feedback and we’d love it if you would review us on iTunes or Stitcher radio and you can do that real easy. All it takes is a few minutes and we’d much appreciate that.
High-frequency trading, the American renaissance, energy, a few of the things I want to you about as it effects our real estate investing and our income property investing, plans and portfolios here. Some really good stuff. Today I interviewed Consuelo Mack and you may have heard of her, she has a show on PBS and puts out some really great material. I interviewed her for the show and today we’ll have her on an upcoming episode soon.
One of the things we talked about, what she calls, the American renaissance, and certainly on the show and prior episodes we’ve had a lot of negative stuff that we’ve talked about. We’ve talked about how to spin those negative events, which most people would interrupt as negative, in positive ways and exploit them to profit and benefit as we invest in income property.
One of the things that I talked about a lot during the great recession, our last financial crisis here, and the one we’re probably still in. I still don’t think, from an economic prospective, we’re really a legitimate recovery. I think we’re in a recovery endued by the good side, invocation and entrepreneurship. That’s fantastic, but on the bad side, we’re in a “Recovery” induced by money creation, money printing by Keynesian economics, which is never really a the basis of a true, legitimate, fundamental economic recovery.
With that said, there are many, many things to be very bullish about and very existed about in the future. We’ve talked a lot about technology, we’ve talked about breakthroughs in energy and manufacturing, the way of 3D printing, certainly I’ve talked enough about the self-driving car and you might be sick of hearing me talk about that, but I do think folks! That is a biggie, that is a biggie. Don’t do not underestimate the importance of that good old self-driving car. I can hardly wait to buy one myself. We’re getting close with that.
In this American renaissance, I mean, if you think about it and you’ll hear about it upcoming with Consuelo Mack, but there are so many amazing things going on not at least of which is energy. Just a few days ago, an American company, Lockheed Martin announced a big break through in fusion energy technology. I’ve mixed this up on the show before when I wasn’t thinking and didn’t have enough coffee, but the way we get energy now, in terms of nuclear power…by the way that’s Nu-cle-ar, not
Nu-cu-lar, George Bush and many others mispronounce it. It’s nuclear, just look at the way it’s spelled, *Laughter*. My mom used to always correct me on that one too. Glad she did.
You know, what we’ve always done was split the atom and that generated heat and that heat could be used to boil water and make steam and turn turbines and that is our popular form of nuclear power now. Well, there’s another way to do it and that’s with fusion, putting the atoms together, and having them create heat. When we do that, it’s vastly more efficient. It’s much, much safer and it’s clean! It doesn’t create any waste.
Now, personally, I think the current method of nuclear power is the cleanest, safest, overall best form of energy available to us today. I think it’s much better than coal and really any other system. I don’t think solar or wind are even close to being there yet. Although they have improved dramatic, but I think the Obama clan is following the wrong thing there and they’re just using way too engage in croney capitalism and we’re searching in freedom.
We’ve talked about that before certainly, but I mean, this is a big deal. Here’s what Lockheed says, they say within a decade, they will be able to put nuclear fusion reactors on pickup trucks. That’s how small they will be. Portable, small, safe, and probably pretty inexpensive too, and this is potentially, a huge, huge game changer. It’s so interesting to look back and if you wanna see what people thought the world was going to turn out like. It’s really quite fascinating to what movies from the 70s. You could watch Soylent Green, you can watch any of these other movies that predicted..what’s that one where they, and this is not a 70s one, this is an 80s one, I forget the name, but you know it’s these people with no fuel and water and this like apocalyptic world, road worriers or something like that.
Anyway, you probably know what I’m talking about even though I don’t know what I’m talking about. You know, this whole future, this Malthusian future that they predicted for hundreds of years is just not coming true. Sorry for the giggle, my dog here is bugging me. Hey, Coco. You need to leave me alone while I podcast.
By the way, you know who my best listener is? It’s Coco the dog, who listens to almost every single podcast I record. I mean she just beautifully sits here all day, learning, learning, learning, whether it be Creating Wealth show, the American Monetary Association show; the Jet Setter show, the Holistic Survival show, she listens to almost all of them, because she’s with me almost always when I’m recording them and you see this is why I’m single, because a wife would be bored to death with this, right? But *laughter*, I digress as usual.
So, the Malthusians have predicted this terrible apocalyptical future and it just ain’t happening. I mean, every problem we encounter, we seem to overcome with bonuses. Necessity is the mother of invention and with all the amazing stuff going on in technology, it is just an incredible time to be alive. One of my friends today posted on Facebook a new app that basically, you can put it on your smartphone and this app will tell what beer or wine you will like best based on, get this, based on your DNA.
Yes! Everybody actually has and this is the reason we all like different things, because we are genetically diverse and that genetic diversity actually tells us what we like in terms of taste. So instead of going with the description of beer or the wine, what’s the bouquet? Is this an Amber or a Lager or this or that or a Hefeweizen or whatever, or a Stout. You know, all these descriptions they’re somewhat meaningless because the real way we taste is based on our genetics and now, get this, there’s an app for that! *Laughter*. It is truly an amazing time to be alive.
By the way, last week when I was in Las Vegas at the conference on discounted mortgages and note investing and so forth, more to come on that obviously. We’ve talked about that extensively as we’re waiting through the cheesy players in that industry and looking for the best outlets and bests local markets specialist, if you will. Compared to our property investing in the world of note and trustee and discount mortgage investing, but when I was there with our client Fernando, who finally came on the podcast for a very brief time, he told me about another awesome app, which I’m really starting to use and love.
I don’t know if it’s on Android, but it’s certainly on iPhone and it’s called Fooducate. Fooducate. In other words, food and educate, right? And this is the most awesome food app I’ve ever seen. I think I’m getting a little bit of a disease here. It’s the disease known as Orthorexia and I’ve teased two of my ex-girlfriends about it because I say they have Orthorexia. You can look it up. There’s a Wikipedia entry on Orthorexia.
I guess it has some of the same words as Anorexia, now that would not be good. *Laughter*. Orthorexia is actually a pretty good one as long as you’re not too intense or insane about, but maybe I got a little touch of it myself. What that is is someone who is really into eating the right food. They really wanna make sure the food is organic and they want to know about their food and all this kind of stuff. Now, I am not a nut about this, at least I don’t think I am, but I guess nuts never think they’re nuts, right? *Laughter*.
I do like to know more about it and these labels are so confusing. What would appear healthy is really not healthy. I think our FDA, our Food and Drug Administration is really part of the problem. They’re part of this scam. They mandate labeling laws and the companies that are in bed with them, like Monsanto, and there’s a lot on this on the whole survival show by the way. Many, many interviews on the topic. Just like in bed with big Wall Street companies and these are both, the big food companies are the big Wall Street companies, so it’s like two ways to be in bed with the government and the corporatocracy in one swoop.
You have them and they mislead us so much with their labeling, so this is a great little app. You can scan the bar code on any food item and it’ll give it a grade. It will tell you why it gave it that grade, so is it an A, B, or C, plus, minus? And you can just see, the thing you thought was good, will turn out to be a C or a C+ and then you can discover why. It’ll give you the recommended amount of grams of sugar you should ingest everyday and things like that, so really great little app. Thank you Fernando for referring me to that one. I really, really like it.
So anyway, that’s that. Now, some good news from the government and the powers-that-be maybe, they are finally, thank you to Michael Lewis, who we profiled on an episode, a couple dozen episodes ago, and we talked about his new book Flash Boys, which by the way, is an awesome book, okay. If you want to know about the lengths to which these Wall Street crooks will go to scam you, read Flash Boys or get an Audible if you like audiobooks, but you’re listening time should be dedicated to my podcast, so never mind, just read the book and listen to my podcast. *Laughter*.
That’s a great book, so he’s brought a lot of attention to the scam known as high-frequency trading. There’s a little Newsy video on that I want to share with you and here it is:
Audio Clip – Zach Toombs: In the world of high-speed trading, milliseconds can mean millions of dollars and the FBI is concerned some traders might have an unfair advantage in that respect.
Jason:
Really?
Audio Clip – Zach Toombs: Traders often use high-speed computers and algorithm to trade at rates faster than individual investors and while the practice itself is legal, the FBI is investigating whether it’s being used in wire fraud or insider trading. The Wall Street Journal and Bloomberg broke news of the FBI probe Monday. High-speed traders are also the focus of Flash Boys, the new book from author Michael Lewis and apparently the book portrays the practice rather harshly. In Business Week’s words, “Lewis views high-speed traders as the consummate middlemen extracting unnecessary rents from a class of everyday investors who have never been at a bigger disadvantage.” The criticism here that firms engaging in high-speed trading can act on information before the average individual trader knows that info and that affects the prices of the stock. Though, at least, a couple of members have CNBC’s panel Monday afternoon didn’t see why that’s big news.
CNBC’s Audio Clip – I don’t know that the market is ridged, but just the reality of the world that we live in today. I’m not saying this is right, but the reality is, if you have money, you have more access. It’s really that simple. That’s the whole point of private client services.
Audio Clip – Zach Toombs: A stat to keep in mind, despite strong market gains in the last couple of years, the percentage of American’s owning stock is at a 15 year low, so more trading is happening among other a small slice of the population. The FBI won’t be alone in its investigation of high-speed trading. The Securities and Exchange Commission and New York’s Attorney General’s office are also examining the practice for criminal activity or unfair advantages. From Newsy, I’m Zach Toombs.
Jason:
Obviously criminal activity and unfair advantages. Why isn’t high-speeding trading on Wall Street considered the same thing as insider trading? Because, it really is. As Michael Lewis explains so well on 60 minutes, we played the clip on my show as well. Basically what they’re doing, you make the trade and then they know you’ve executed that trade from your computer and then, they go and trade just milliseconds before you, so they’re using insider information.
It’s not the same type of insider information where you know the CEO of the company and the CEO of the company gave you the insider information, that’s what our insider trading laws are set up for now, this is just like a reversed form of insider trading. It’s ridiculous and it’s disgusting, so anyway hopefully we’ll see some action from the government there. Usually..You know how it is, I’m pessimistic about this folks.
Every time the government takes some action, it usually never solves the problem. In fact, so many times it actually causes the reverse effect and makes it worse. We shall see as we continue to monitor the crackdown, the theoretical crackdown, or at least the investigation into high-speed trading, which is an abject scam. It’s ridiculous. Stay out of Wall Street. Commandment number three, thou shalt maintain control. Buy some income property for yourself. You know, it’s the most historical prove asset class in American history, if not world history.
Okay. I want to thank you to many people who have been helping me clear out my storage unit and sell those Creating Wealth home study courses and Meet the Masters home study courses. These are the physical products that are on sale at drastically reduced prices to the good ornament on your bookshelf and also, good knowledge inside your brain. So thank you so much for buying these and helping me clear out that storage unit. I love it!
Again, we don’t do much in the way of physical products. Most of our products are digital, so you just download them. They’re bits and bites really. These are physical products, so we’d appreciate you getting them. We’ve got them on sale, close out sale, to get rid of the last of these at https://www.jasonhartman.com. Basically half price, free shipping in the continental United States and I see we’ve got one here from Canada who snuck in. If it’s not too much we’re gonna ship it to you too, so don’t worry. *Laughter*.
Okay so, thank you to Ken, Andrew, Joshua, Heath, Diana, and Jeremy, who purchased those products. Representing us from cities and that’s Parker, Colorado. Denver, Colorado. Wood Bridge. Boulder, Las Vegas. So, a lot of good stuff and we appreciate you purchasing those and please, if you haven’t done so yet before the close out, take advantage of this ultra great deal just because I don’t want to store all these products and let’s get them out of there.
And then! Make sure you join us for our Birmingham Creating Wealth In Today’s Economy seminar and property tour that’s November 22nd and 23rd. The weekend before Thanksgiving. I think on Saturday evening..One of the great things about these tours, the thing I just love so much, all the meals we share together. Last time in Little Rock, we had a pretty small group only about, I think, 22 people, maybe 24 people, but we just enjoyed some great meals together and it’s just really great to be able to get to know everybody and talk about things and address issues and get questions answered and ideas exchanged at these meals.
I think, you know what, I think what we’re going to do Saturday night of the Little Rock tour, since it’s before Thanksgiving, I think we should go out and have a turkey dinner with all the trimmings if you will. I think we’ll arrange that for Saturday evening on the property tour of the weekend, so that would be November 22nd will be Saturday and Sunday the 23rd we’ll go tour properties in Birmingham.
This again, is a fantastic market for, what I call, the bullet proof properties. The minimalist management. These properties, our provider there is a different style of things, they basically don’t buy houses, and that means they don’t sell houses, with very many features. These are really plan vanilla houses.
At first when I was there a couple of months ago, I was asking them, you know, “Well, why do you do that? If there’s a dishwasher, you take it out. If there’s a garbage disposal, you take it out. You try not to buy houses with garages. If there is a garage, you wall in the door and turn it into a storage room or an extra room. You know, why do you do this?” And he said, “Because those are all the things that break and we take them out so that there’s nothing that breaks, so our investors really have very, very little maintenance at all.”
This is just the minimalist management philosophy and these houses, they’re able to sell them to you at such low prices that you can rent them at very low prices and they’re very desirable to the tenants. In all of the properties there, we’re basically seeing rent value ratios well above 1% or in the worse case, at about 1%.
Some really good properties in Birmingham, so come join us for that and I really look forward to seeing you and hanging out with you. It’s a nice causal environment. I do the seminar all day Saturday. We have lunch together on Saturday, we have dinner together Saturday evening. We’ll have breakfast together on Sunday and then lunch together on Sunday as well. We always have to take people after lunch to a good Starbucks run, so we always seem to find a Starbucks to do, because you know, I gotta have my ice coffee with 1 pump of vanilla and just a tiny little bit of soy milk in it, because soy is not good for you. I learned that from the Fooducate app. *Laughter*. So there you go.
Okay, hey. Let’s get to our guest today, John Challenger and let’s talk about outplacement, employment, what areas in the country and the world are having the good employment growth. That’s one thing that we have to know as real estate investors, right? We gotta know where the jobs are going, but here’s the clue and, by the way, if you haven’t listened to it, go back and find my podcast with Meredith Whitney, who is awesome. You’ve probably seen her in the various media, written in the Wall Street Journal, CNBC, etc. She wrote a great book called, The Fate of the States, which address all these business friendly states and where the job growth is.
And Consuelo Mack, who I interviewed today and we’ll publish that interview soon, she said something really interesting. She said, “The mid-west is my favorite emerging market economy.” I thought that was kind of interesting and really the south is the same thing. It’s kind of the same deal. It’s really all the same types of elements and demographics and things going on there in business friendliness. So that’s where the growth is, I give you a clue, but John Challenger will tell you more and let’s get over to the John Challenger interview. Here we go.
It’s my pleasure to welcome John Challenger to the show, he is CEO of the employment and global outplacement firm Challenger, Gray & Christmas and we’re going to talk to him today about employment and what’s going on there. John, welcome! How are you?
John Challenger:
I’m doing very well. Thanks so much for having me.
Jason:
Yeah, it’s good to have you and you’re coming to us from Chicago, correct?
John:
I am. I’m sitting on the west edge of the Loop, southwest edge of the loop on summer day.
Jason:
Good stuff. Well, let’s talk about the economy and what is going on out there. Certainly for the past several years, there have been a lot of complaints about the employment picture and I just wanted to get your perspective.
John:
Well, we’re much more optimistic about where the economy is now compared to where it was 5 years ago. The expansion now has been going on since the summer of 2009. It’s been a very slow digging out of that deep recession. It was the hardest recession on the labor market since the great depression, so it’s taking now nearly 5 years to get back to the level of total jobs we had before that recession started. We now have surpassed that and the unemployment national at 6.2%, we’re beginning to see some of the first sign of labor shortages appearing. Things likely, as we move forward in the next 2-3 years, the last big section of what’s appearing is expansion. We’ll see unemployment to continue to drop.
Jason:
When we’re talking about this I think it’s important to kinda break it down and dice it up a little bit because there’s a lot of talk about underemployment and then you’ve got different segments of the market, whether it’s college educated employment or it’s labor type employment, blue collar employment, and things like that. Of course, geography enters the picture and when you get past age break outs and so forth. Tell us a little bit about your firm and what type of work to do.
John:
We’re an outplacement company and companies let people go and today a severance package includes health insurance continuation outplacement, so we help those people find jobs, get through that period of unemployment, and benefits of companies offer. We’re seeing lots of downsizing now occur due to mergers and acquisitions. You don’t see the big job cuts occurring because of revenues are down like we saw during the recession.
Jason:
Okay, well, that’s good to hear. So I would assume your type of clientele is companies with white collar workers, would that be correct or no?
John:
Well it’s both white collar and blue collar. We work with white collar workers all the way up to to executives, but companies close plant-operation to blue collar workers are non-excerpt as well.
Jason:
What segments are you finding the labor shortages in?
John:
Well, we’re beginning to see labor shortages in some of the areas you might expect like technology, programs, those in particular are in high-demand. Companies like IT departments. They’ve changed in new technologies as we’ve moved from PCs to smartphones as more and more businesses done in the Cloud. There’s just great demand for high-quality programers.
We’re also seeing real demand for engineers of all types, electrical, electronic, mechanical. So that’s another high-demand field that companies are hard time finding people with the experience with what they want. We’re also seeing some other areas, interesting areas, for example there’s an article recently in Detroit that has the highest unemployment in the country right now for a major city of 9.2%, but they were talking of companies offering sign bonuses to accountants because they couldn’t find, employers who were unable to find a neck of accountants in the city. If you go with the oil patch, and that includes not just the south-west but up in the Dakotas and the plannings we’re seeing great demands for truckers, both long-haul and in cities, jobs for electricians, plumbers, flow-control operators, real shortage of the workers there. This is what happens when you see unemployment get to a level where it’s at now, which is just at the very beginning of some of these kinds of issues. 6,2% nationally, most economists think that full employment is about 4-5%. When you get to that level and we’re not that far away from, because remember back in the recession we were above 10%. We’ve come along way. When you get to that level, companies begin to find, very difficult to find people with the skills they want and that’s the big issue with this country. There’s a growing skills gap and companies have jobs open, but they can’t seem to find with the skills they want to fill those jobs.
Jason:
Of course, all the numbers that you’re quoting are the official statistics and there’s some manipulation there, just like with inflation numbers of course, but if we bench mark official to official then we’re okay for comparison purposes at least. What skills are in really short supply? I kinda have a feeling you’re going to say technical skills in high-tech areas.
John:
That certainly is a key, but remember not just high-tech areas, it’s also pumpers and electricians. One big employer in Houston told me that they were paying plumbers and electricians, high-skilled trade people, $75,000 a year and up and they were having a hard time finding people. There was a recent survey out from, the JOLT survey at the Bureau of Labor Statistics that showed employers hired 4.8 million plus employees in June. That was up 4.4 million from a year ago, but there was still 2.5 million job openings at the end of the month.
Jason:
I remember reading an article about that about three months ago and it really amazed me and it showed..one of the debates about how college is so over-priced now. It’s amazing. There’s so many jobs that really just don’t require college and can be very lucrative, at least if we’re talking about just a money standpoint of view, no question about it, and of course, entrepreneurship is always there too.
John:
Right, what it means though, it means that we don’t want to direct all our children in to colleges, but we need to have stronger support for technical schools, vocations schools, trade schools. If we can build on programs that tie the local community colleges and trade schools to the local employers, so that those trade schools and community colleges are training people on specific skills in that particular city, that local environment, what employers need and they can certified them, I think we’ll make a big impact on that skills gap, which is leaving a lot of people unemployed.
Primitives, and it’s really there, that the number for underemployed, which is called, ‘The U6 number’, that includes not only people who are unemployed, that means only you’ve been looking in the last month;when you look at that unemployment rate, but also includes looked in the last year. It includes people who have part time, but want full time jobs. Don’t remember, it’s dropped from 13.6% unemployment or underemployed to 12% in last year. That’s a big drop. Remember long term unemployed people over six months out of work has dropped over a million, a million people in the last year.
Jason:
You know what I’m particularly interested in lately is the subject of robotics. I have friends out there who are thought leaders, or at least consider themselves to be, and they have a lot of commentary on this subject of robotics and I’m very curious as to how it’s going to impact the economy in general. What your thoughts are on it?
Really, we’re kind of here, it has arrived. Within a year, maybe two years, we’re going to see real impact, I think, in terms of the self-driving car. Like, that’s coming to reality. I mean, it’s been out there for several years in experimental stages and transportation is a huge employer in many different forms to taxi cabs, to shuttles, to truck drivers, hauling goods and robotics for all sorts of things.
Robotics to make your coffee, robotics to replace the worker at Starbucks, all these kinds of things and many have predicted massive unemployment. They’ve predicted things that this affects 45% of the jobs out there. Of course, it’s not going to be all of a sudden. With every technology throughout history, it has always ultimately made life better and people have found alternative employment. Maybe it’s not the highest and best use for people to be driving cars or shuttles or trucks.
John:
Well, there you go. I’m with you. I’m not as pessimistic about..
Jason:
Me either by the way.
John:
I mean, every era has new technology, people who built their lives around work or the technology replaced in that era were afraid that they no longer, you know when the car or the automobile came around it would no longer be bicycles and buggies and charlies and horses, whole economy built on that. Ever era has technology like that and what happens is people move to new kinds of needs, professions, people use the technology to do more complex kind of work, and so I see no reason why this kind of era is any different.
The technology is changing what people need to do, what they’d be doing at that work, need more skills around how we use that technology, which is why education is so important. We may see people move to, a huge growth in services jobs. Think about all the doctors and nurses, and health care providers, they’re needed, and people who don’t really get the health care they need of all kinds. Elder care, support people, think about all that trainers and the coaches that are out there today that aren’t just coaching athletes, but coaching people in mastering different kinds of endeavors in all kinds of fields through adulthood. I think that can’t be automated, I mean it can be, I think technology will impact..In fact, technology is going to impact college, how to train people..
Jason:
And it should, by god.
John:
But it doesn’t change.
Jason:
Yeah, the education really needs to be disassembled and re-built, because it’s so overpriced. In an era of technology, when college kids are taking their kids online, I mean why does the price of college keep going up? It’s absurd. The only real answer for that and, this is get a little tangent issue, is that the government keeps pumping money to ensuring student loans and so the universities, naturally have all these flow of money coming at them, they naturally rise their prices and provided less, not more, services than they used to.
John:
So true. It’s slower and a particular sector is to embrace technology and what it means for how they deliver their services or products or create them, the more of this kind of issue you have. The one I think is most hard to change is actually government, because business, even if it’s health care or educate, which in some ways is a business, and it’s supported by government so it’s slower to change.
Utilities are slower to change, but government doesn’t have the kind of change potential that business has. The businesses isn’t doing well or a new business comes in, a provider of services, comes in and uses technology to better and less expensively and eventually the companies that did it the old way fail. Either they change or they fail. People shift or people moving their jobs to a new area, but government doesn’t have that ability.
You don’t see government go under, so you don’t have potential for the new, more efficient current technology environment and operation that an do government. What you have is a peripheralization of municipalities and city government and townships and counties and state governments and federal governments, because they don’t have the ability and they also have a lot of people, so I think that’s an area that’s the hardest actually to shift in.
Jason:
Yeah, it’s interesting about the robotics subject though everybody always says, especially economists, the optimistic ones, “This time is different.” Famous last words, right? But with the robotics issues and the technology we have now-a-days it really is a little different, at least I think so. You look at Watson, IBM’s new doctor basically.
I was watching a presentation on Watson, the computer that one Jeopardy by the way a few years ago, and it’s amazing how many mistakes doctors make and other healthcare professionals, a computer really wouldn’t be susceptible to a lot of these mistakes. Now, I know there’s a human element and everything, I get that. I don’t know, if I was in the health care industry I would be thinking about this. It’s not tomorrow, but it’s definitely coming.
John:
Most robotics are computers, so they’ll get us better health care..
Jason:
Yeah, at lower cost.
John:
..but they won’t have bed side manners.
Jason:
Well, true, but I don’t know how much time the doctor’s now-a-days have time for bed side manner. *Laughter*.
John:
Maybe we’ll see a monkey do that, right? Instead of..like maybe that will..the job of a doctor will be take care of the sick and..
Jason:
And have the bed side manner, yeah. The computer does the work or the robot. So now-a-days these robots they learn things by watching you do them. I mean, they repair themselves to some extent. It’s pretty amazing time to be alive. Like you, I’m optimistic about it, but I think, the thing is that there’s always a changeover period, John. You know, there’s always that adjustment phase and you see like these labor unions that wanna use clipboards instead of computers and you know, they want to intentionally make the work place more primitive so that they hang on to jobs that are just out load of jobs. That kind of stuff just has to end, right? Let technology do it’s thing.
John:
I think you’re right. There’s always a transition period. The transitions are hardest on the people who are say, in their 50s and 60s, or at least 40s, 50s, 60s, who came up in the old environment, but the new environment has come upon them and their skill sets are no longer as valid. The current example is manufacturing in the 50s and 60s dominated our economy, but today it’s 11% of the work force, somewhere in that range, works in manufacturing and it’s because machines do much more of it.
You don’t need as many people to operate..think about how many more cars and washing machines and all the other sorts of things that manufactures create that we need today. So we know they’re making far more with far fewer people. The generation of people that who were in their 50s and 60s can’t really adapt and all of a sudden wagers for those semi-skilled jobs plummeted. Hard to make that adaptation very easily.
It’s kind of the real pain, suffering, and agony that the country went..most people, families, towns and cities, went through sort of manufacturing through 80s and 90s and continued to go through. Those same people weren’t putting their children through school to prepare them for manufacturing. They knew they had to go on to other kinds of skill sets and that’s what happened.
Their children went to engineering and went to computers and technology. They went to health care or energy and just other areas of the economy where it thrived while the manufacturing slowed down. We grew from the manufacturing agent in the information and service economy an era and those kinds of changes leave some people stranded.
Jason:
As we wrap up here, John. I want to ask you a little bit about geography. Now, your company does business all over the world or all over the US or?
John:
We do, yeah, all over the world.
Jason:
All over the world. So what’s going on, maybe just talk a little bit about the US at least, the world’s too big of a place to even get in here in a couple of minutes, but what are some of the hot spots for jobs geographically? Are they the business friendly states? I mean, Texas is obviously make a lot of news. What are you seeing?
John:
Well, we are seeing nearly in the states now low on unemployment and some of those are in the south-west and in the plain states have shown consistently lowest unemployment rates under 5% and even 4% in some cases, which is really fully employment. The big cities, the cities that were hardest hit by the housing crisis, some of the states that have some of the highest debt issues are the ones that are still struggling, even though those states are turning around. States like Illinois, California, New Jersey, Florida, and Arizona, and Nevada those are places that had very high unemployment, their unemployment are higher than their national average, but it’s turning around.
Jason:
So it’s getting a little bit better in those places you’re saying.
John:
Yeah it is. So one of the things you see as you move into low unemployment, again the unemployment between 4.5% and 6.5% or 7%, but 6.5% and down is some of the most disadvantaged groups for long-term unemployed over 55 workers, immigrants, people with high-school educations or even less than high-school educations, those are the ones that begin to get picked as the labor pool shrinks. Hopefully get new skills, their jobs they work at, make them more current to find better jobs. So we’re moving the onset of next period in the economy, that’s very unusual if that happens. We’ll see real improvement in some of the people who were hit hardest in the recession had the hardest time lifting their way back into the economy.
Jason:
Very interesting. Well good stuff. John, give out your website if you would and tell people where they can find out more about your firm.
John:
The website’s www.challengergray.com it’s the right place to go to to find information about us.
Jason:
Alright, well John Challenger thank you so much for joining us today.
John:
Thank you for having me.
