14. Some Labour Market Observations and Ideas
Some Labour Market Observations and Ideas
I have mentioned in one of my earlier blogs (https://www.mayoan.com/post/18-kalachakram-or-the-wheel-of-time) that , I feel that nature is leaving us important clues about the ways of working of the universe in its manifestations and the reverse (new paradigms like cloud computing ) is also possibly true which means, us (all species on earth), are teaching nature about some possibilities to gain efficiency and effectiveness.
In a similar line of thought, I equate the economy with the water cycle.
Water collects/flows at a place, either through rain or through rivers fed by perennial springs/tributaries.
Similarly economic value/activities manifest/happen at a country/place, either through employment or through entrepreneurship/ (or by government sector employment).
Let us consider the rainwater:
Rainwater droplets, in trillions, fall on earth, collect into puddles, pick up run and volume, join water bodies like pond/lake and possibly flow as a deluge in a river, finally merging with the ocean.
Similarly, labour class employments, in millions, feed the lower rung of economy, supporting the general population and/or feeding into the business organizations. The economic value of the work nature increases as the feeding/supporting conditions aggregate to large organizations across the 4 spectrum of core sectors (agriculture, manufacturing, services and the harnessing of natural resources) and finally translating as revenue income in the government coffers. Â
Let us consider the other sources of water:
Under-ground springs from certain locations, snow fed lakes and other possible perennial sources of water, supply water to ponds/lakes/rivers and tributaries and they too accumulate in small numbers before becoming a deluge.
Similarly, new investment-based employments, break-through related employments (e.g. cloud computing or AI in IT sector), employments from government spending create an alternate form of economic activities and related employments in a given place/country.
I refer to this ‘buzz’ of activities and related employments in my blog (https://www.mayoan.com/economy/10.-administering-the-economy-in-novel-ways---part-2) as economic ‘buzz’ under the topic – Central Planning Commission.
To sustain an economy and to avoid large scale unemployment, the central planners of the government have to focus on both of these catalysts (Systematic maintenance of basic employments and the ones that come by because of sudden investments like foreign -investments/government-spending/innovation-led/technology-breakthroughs that help in generating employment opportunities.
These employments primarily belong to 4 basic sectors:
1.     Agriculture (sowing, production, harvesting, transporting, storing, logistics and distribution)
2.  Manufacturing (procurement of raw materials, production, WIP, shipping, storing, logistics and distribution)
3.    Services (low level – general service jobs to public/ mid-level – front/mid-office service jobs/other blue collared jobs/white-collared jobs) Â
4.     Harnessing of Natural Resources (mining/marine ecology/energy/tourism etc.,)
Employment opportunities will be curbed because of the below possible actions/happenings:
1.     Adoption of technology, mechanization and automation (the general trend when this happens is to bring efficiency and effectiveness leading to FTE reduction).
Governments – local and central must consult their planning commissions and strategies to properly regulate the adoption. Reckless adoption of automation/AI will reduce available ground level feeder job opportunities (remember what missing rains can do to a country) while non-action i.e non-adoption of technology driven automation/mechanizing will be leading to stagnation of conditions and nature of workforce. We have to remember how the introduction of computers greatly lifted the quality of life for a large set of people by shifting a large number of jobs from agriculture/manufacturing (while these sectors were diving into automation and mechanization successfully) to services sector.
When too much rain happens without an outflow or harnessing, this leads to water stagnation and clogging. This is what happens in low-income sub-urbans where population builds without proper investments that provides quality jobs.
Like how a stagnating body of water leads to diseases, low-income sub-urbans leads to the raise of criminal activities.
Considering these analogy, local/central government, backed by data, have to take high-quality decisions fairly quickly that leads to optimal outcomes.
I always consider local/central leaders akin to ship captains whose ships are passing through dangerous waters perennially.
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2.     Shipping of the natural resources in raw form without analysing possible local uses (may not be suitable under all conditions)
Please refer to the links in the references section.
I think a country should be careful when it is exporting large quantities of raw materials unmindful about its use for itself especially if it is lacking long term planning going even up to 100 years! Since it is true that a knowledge powered society with its able leaders will never miss such an opportunity, one of the basic need for subsequent prosperity is to increase education level of the population.
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It may be flawed or may not be true 100% of the time, but I generally think the below is true.
Processing raw materials provide low paying jobs while manufacturing and selling the finished products from these raw materials provide high quality, high paying jobs! Add to this the fact that for at least some of the poorer countries, even the related R&D to analyse the raw materials and to identify its economic/profit scope is happening outside its borders.
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3.     Outsourcing and offshoring strategies
This is a double-edged weapon that should be carefully used only when it is absolutely necessary. Â The business leaders and national leaders must consider all aspects before green lighting these strategies. Consideration of only the business profits due to low incurred costs may lead to a very short termed interim benefit which may prove to be harmful in long run (remember what missing rains, vanishing snows and drying springs can do to your country).
Consider that we do not have many industries like the IT industry, that is easily providing job opportunities, that builds brain capabilities like abstract thinking/modelling and architecting. Hence, we see the need for other considerations besides the profit related motivations.
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4.     Large scale out-migration from a place (Job opportunities in villages are less compared to cities)
Local economists/planners need to carefully observe data, identify opportunities to create the needed economic ‘buzz’ to stop the death of a village/town or a city. In this regard, innovative thinking like planning to be a hub in the transport sector or to be a place that hosts a solar farm etc., should be considered. Where we are unable to take advantage of the local skills and knowledge, we have to be innovative to see what kind of services are in need – now and later (can it be supported remotely?) and adopt intelligently. Needless to say, we need high quality leadership that are truly nationalistic. Â
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5.     Change of public preferences (fast foods and ready-to-cook foods are widely accepted nowadays)
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6.    Raise of macro-economic factors like inflation/cost-of-living, when people try to optimize and practice thriftiness.
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7.     Any other elements that are visible to local/national leaders/economists.
Employment opportunities will increase because of the below possible actions:
1.     Large scale in-migration (This may affect the employment opportunities of the local population and may lead to social tensions. But temporary high population in places due to activities like tourism is a preferred happening).
When this happens, lots of people will need the same basic things and hence the labour level job counts tend to show an upward tick.
Local governments, if possible, with the help of SMEs and central support, should analyse these trends carefully in almost real-time basis and convert/direct them into positive outcomes. For this to happen, decisions have to be taken based on solid high-quality real time data. Thus, the initial growth in low quality jobs, can be used to generate the growth of next and subsequent level high quality jobs.
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2.     Innovation and breakthroughs – opening up new job opportunities.
This is especially true if the local community has a high-quality education system in place like the Silicon Valley where a number of unicorn startups flourished. Even the perished startups provided high quality lessons to the general public and investors due to the analysis done on them by the local educational institutions.
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3.     Allowing natural growth of population in villages/towns/cities without affecting the quality of living.
If the quality of living is not in focus, this quick growth in population may lead to low quality sub-urbans that eventually become infected with crimes.
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4.     Fall in the availability of certain skills/knowledge that are in demand (assuming the quickest remedy chosen is offshoring/out-sourcing)
5.     Change of public preferences (landline phones are out and Wifi is in)
6.     Raise of macro-economic factors like drop-in interest rates/cheap borrowing costs.
7.     Any other elements that are visible to local/national leaders/economists.
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We can see how the forces of nature is playing all around and hence when we are stuck in a context like, job market or economy etc., it is easy for us to decide if we consider a naturally occurring analogy and draw helpful validation points to move forward.
In this article, the simple advice is – DO NOT take any decisions that dry out your sources of water!
Look at the options in the hand to grow job opportunities and to curb job losses. These are dynamic- remember water may dry or flow in abundance for many reasons other than mere geography. Some time, collaboration may lead to even better outcomes.
For catching rains - we grow trees and de-clog canals, seed the clouds, builds tanks and reservoirs etc., similarly to catch new economic activities and related jobs., the local authorities should enable certain hygiene aspects related to business such as - easy and transparent tax regime, crime free neighbourhoods, ensuring top quality in schools, availability of recreation centres at affordable rates , fantastic transportation grid etc.,
Some examples of collaborations are as follows:
Sister city arrangements - to shift remote-working enabled jobs to other city to help tide over tough conditions or to shift jobs of certain types in excess to other city while opening up for high valued new economy jobs.
Avoiding concentration of economical output of nations in certain metropolitan cities only. See what can be shifted outside the metropolitan cities without any major issues. Outsourcing within national boundaries is welcome !
If catchment and storing of rains are in different geographies -collaborate for the benefit of both places!
Data centres can be in one place and call centres, front offices, middle offices and back offices can be in other locations. Again, distribute for the benefit of all, rather than concentrate for a rich few !
Happiness as value should prevail over profit as money!
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References:
https://www.cruxinvestor.com/posts/top-mining-countries-in-the-world-2024
https://www.iea.org/topics/critical-minerals
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Hari Om!