Learning in RetirementMark S. LeClair

Fairfield UniversityApril 14, 2015

• Powerpoint slides available at:• www.faculty.fairfield.edu/mleclair– Look for link that is labeled “Learning in

Retirement”– Must have Powerpoint on computer to open

Outline of Talk

• What will the U.S. labor market look like 20 years from now?– What does that mean about economic growth and

well-being?

• Where will jobs be?• Who will be looking?• Government policy and the labor market

Where does one go to Find Numbers?

• General Public: Occupational Outlook Handbook, Bureau of Labor Statistics:

http://www.bls.gov/ooh/ • BLS website for current data

Some Fast Growing Professions & Current Pay Rate

Occupation Growth Rate, 2012-22

2012 Median Pay

Industrial Org. Psychologists

53% $83,600

Personal Care Aides 49% $19,900

Home Health Aides 48% $20,800

Insulation Workers 47% $39,200

Translators 46% $45,400

Construction “Helpers”

43% $28,200

Physicians Assistants

38% $90,930

Information Security Analyst

37% $86,200

Physical Therapists 36% $79,900

What About the Famous “STEM” jobsOccupation Employment

(2012)Employment (2022)

Median Salary (2013)

Degree Requirement

Software Developers 613,000 752,000 $93,000 Bachelor’s

Computer User Support 548,000 659,000 $47,000 Some College

System Software 405,000 488,000 $101,000 Bachelor’s

Civil Engineers 273,000 327,000 $81,000 Bachelor’s

Computer Programmers 344,000 372,000 $76,000 Bachelor’s

Network Administrators 366,000 409,000 $74,000 Bachelor’s

Mechanical Engineers 258,000 270,000 $82,000 Bachelor’s

Information System Managers

333,000 384,000 $124,000 Bachelor’s

Industrial Engineers 223,000 233,000 $80,000 Bachelor’s

Web Developers 141,000 170,000 $63,000 Associate

Electrical Engineers 166,000 174,000 $89,000 Bachelor’s

Odd Mix of the New and Old

• Robots will not be replacing manual workers anytime soon

• High tech jobs pay very well, but not in the top category for job growth

• Aging society driving much of the changing labor demand– e.g. home health aides

What about Educational RequirementsEmployment by educational requirement, 2012 and projected 2022 (employment in thousands)

Education levelEmployment Projected change, 2012–2022

2012 2022 Number Percent

Doctoral or professional degree 4,002.4 4,640.8 638.4 16.0

Master’s degree 2,432.2 2,880.7 448.5 18.4

Bachelor’s degree 26,033.0 29,176.7 3,143.6 12.1

Associate’s degree 5,954.9 7,000.9 1,046.0 17.6

Postsecondary nondegree award 8,554.2 9,891.2 1,337.1 15.6

Some college, no degree 1,987.2 2,212.2 225.0 11.3

High school diploma or equivalent 58,264.4 62,895.2 4,630.8 7.9

Less than high school38,127.6 42,286.0 4,158.4 10.9

Source: U.S. Bureau of Labor Statistics.

• Also a mix – reflects demand both at skilled and unskilled sectors of labor market

• Despite the need to train thousands of new programmers, engineers, etc., someone still has to fix the plumbing and the electrical

• Good clip on web of robot trying to learn how to put ketchup on a hamburger– Not all human skills are transferable

Other Side of Market – Where are Workers Going to Come From?

• First look at college grads (by field of study)Field of Study (2009) Number of

GraduatesPercent

Science and Engineering 19,640 34.9%

-Computers, Mathematics, Statistics 2,342 4.2

-Social Sciences 4,447 7.9

-Engineering 4,452 7.9

Science and Engineering Related Fields 4.936 8.8

Education 7,723 13.7

Business 11,305 20.1

Arts, Humanities and Other 12,732 22.6

Source: U.S. Census Bureau

What about Skilled Manual Labor?

– Statistics are available from bls:• A good plumber, however can make approximately

$100,000/year (with 5-7 years experience)• Far more than many jobs that require a college degree• Demand is supposed to increase by 22% by 2022.

• 600,000 people in the U.S. are employed as electricians– 20% job growth between now and 2022, or about 120,000

jobs– Average pay is about $50,000/year, many do better

Even if pay falls somewhat below that for a college grad

– One has to include the costs and opportunity costs of college:Average cost of 4 years in college = $80,000

Lost wages during those 4 years = $80,000-----------

Total $160,000Must make $4,000 per year more to break-even, much, much more if discounted.Not all college-degrees provide a sufficient increase in salary, especially if compared to the trades.

Government Management of the Labor Force & the Long-Run Effects

• Particularly the minimum wage (local and federal laws)

• Causes distortions in labor market that can create permanent problems

• Biggest problem is national minimum wage– Useless in many markets (@$7.25/hour) such as

Connecticut– Destructive in very low wage markets

Effect of Minimum Wage Poorly Understood – Even by Many Academics

• Statement that “minimum wage does not cause unemployment” can only be true if:– The laws of supply and demand have been

repealed (we inhabit a parallel universe)– The minimum wage is non-binding, as it probably

is in many high cost states

3 BR, 1 Bath House in Tiffin, OH - $75,000

• Income needed to support mortgage is $25,000, or less than annual income of a couple who both work for minimum wage at McDonald’s (approx. $30,000)

• At $10.25/hour, the supposed target at the federal level, both may be unemployed.

• Does long-term damage to individuals who are forced out of labor market

Workless in Seattle

• Imposition of $15/hour minimum wage• Creates 2 issues– First, you can now drop out of elementary school

and make $30,000/year – a strange incentive mechanism

– Second, businesses are already closing or moving to the city limits to avoid minimum wage OR reducing hours of operation

– http://www.westernjournalism.com/15-minimum-wage-looms-seattle-restaurants-close-doors/

Effects of Minimum Wage Poorly Understood by Public

• Polls that show that a majority of Americans favor a hike in the minimum wage also show that a significant majority do not know what the minimum wage currently is!

Government Training Programs are of Questionable Worth

• Under Employment and Training Administration– Frequently a poor judge of where jobs will be in

the future– May train for nonexistent job• Certainly may be an issue with job training in the

private sector also• May miss market trends

Longer-term Issue – The “Death” of Work

• Stunning Progress in Technology: The Death of Unskilled Labor (Forbes, June 2012)– http://www.forbes.com/sites/singularity/2012/06/28/stunning-progress-in-technology-

the-death-of-unskilled-labor/– Article argues that many manual skills will be done

mechanically in future – those with little or no education beyond high school will find it difficult to achieve a middle-class lifestyle

• USA Today; Could a robot do you job?– http://www.usatoday.com/story/news/nation/2014/10/28/low-skill-workers-

face-mechanization-challenge/18056427/

• Article focuses on home health aides and the fact that robots are being designed to perform nearly all the tasks performed by these workers

• Unfortunately – although everyone mentions retraining, the question is retraining for what?– Other lost jobs include retail cashiers, telemarketers,

freight/stock workers, travel agents, postal workers, librarians, social media managers

– Source: Finance online

Contrarian Video – Robots Failing Miserably at Simple Tasks

• https://www.youtube.com/watch?v=0jXI5p3zSZI

• And, mechanized labor remains very expensive and very costly to maintain– Until other robots can do the maintaining

(supposedly)

• Argument contains a logical fallacy – if the price of labor falls, at some point human labor will be cheaper than mechanized labor.

• The social consequences of “ending work” are enormous– Not sure what we do with a population that sits

around watching videos or talking on Facebook all day.

Questions?