The Loss Of Those “Good Manufacturing Jobs”

They say that manufacturing is going away and that is a crisis. Manufacturing jobs can be pretty good jobs or they can be the hottest, loudest, dirtiest, most unpleasant jobs. I worked in the family company as a machinist when I was young. While it paid well for an 18 year old with no experience and a limited education it was hot, loud and dirty. A few years back my wife (for family reasons) took an entry level service industry job. But it still pays pretty well for an entry level job and it is cleaner, quieter and in a far more pleasant environment than most entry level manufacturing jobs. But service jobs are “bad” and manufacturing jobs are “good”.

Or maybe it is the loss of manufacturing jobs as a whole that is bad.

Later I worked in sales and management for our family business. It sold equipment to industrial companies so I was on the front line of the beginning of the collapse of the industrial economy in this country. We lost a lot of money. It wasn’t pretty and we should surely be among the people who are bitter over the shift from an industrial economy. We should certainly believe that a shift from an industrial economy is a crisis.

But before America led the world in the industrial revolution the world economy was agrarian. When everyone was a farmer the industrial revolution was scary also. All those farmers couldn’t figure out how we weren’t going to starve to death when we gave up the farms and started building and selling widgets to each other. A move from an industrial to an information based economy is just as scary and hopefully it will be just as successful.

I lost a lot of money when the industrial economy started going down but eventually saw where things were going and shifted my career. I had to start over to some degree but am now doing very well (better than I was in upper management in manufacturing) and having a great time (coming up with information based solutions is more challenging and more fun that coming up with physical solutions). Hopefully the change from Industrial Economy to an Information based Economy will mimic the success of the change from Agrarian to Industrial…though change is always scary.

The Demise Of Google – Just Call Me Nostradamus

Google won’t die with a bang. As a mater of fact, it won’t die at all, but it will fade, eventually into irrelevancy. That can happen quicker then you think.

Google had its purpose…OK…it has its purpose. It took a huge jumble of information and made it available. It did it cleaner, faster and better than those first “portals” and search engines of the early Internet era. But the web has evolved and our uses for it have too.

At first the Internet was just a storage area for information. It was like that drawer you have, in your kitchen, that has the telephone book and the menus of local restaurants and your address book and all the other bits information you pick up or write down on scraps of paper. We all hate sifting through that drawer and the web version of that drawer was enormous. Google sifted it for us and sorted it on the table so we could find the slip of paper we we’re looking for. It did it faster and without the clutter that other “portals” of the time had. But the web isn’t that drawer anymore.

The Internet grew from that drawer into a room full of info and now a town full of commerce and information and social functions and more. The web now holds retail stores and restaurants and libraries and meetings and parties and…well you name it. Google still sorts it fast and clean but it sorts it like that drawer. It sorts all those things the same way.

Google sorts by what it considers relevant. All of those who strive to be at the top of those sorts know what I mean. Google sorts the entire web by what it considers relevant content and votes. Votes being links into a site by sources that are graded for their relevancy and content being text or words in the pages of the site. Here lies the problem that will be Googles undoing. Maybe this quiz will help.

Which has more/better content? A) A Library B) A Supermarket C) A Cruise Ship D) A Hospital. It all depends, of course, on whether you’re bored, hungry or injured. Not to Google. It sorts this new landscape of the web…this town…as if it is that information stuffed into that drawer.

The more sites, representing different sectors of society, populate the web the more there will be the need for search engines that sort those site using data applicable to their sectors. Think about it this way, Google is looking for content, text on index pages. So shopping sites need to have a considerable amount of text high on the page to rank well in a search.

This means that when you are looking for a big screen TV, Google wants you to get a page of text. I will agree that they want it to be text about big screen TVs but personally I want to see TVs…lots of them…really big TVs…like movie screens…sorry…what was I talking about…oh yea. I would guess by the way retail store merchandise that they feel most people agree with me. I have never seen the front of a big screen TV section of a Best Buy sporting lots of text or flyers. The same holds true for sites from all sorts of other sectors of society. If you do find all products on the index page of a web site from a Google search, the web site was probably designed to trick its way around Google.

Google will be picked apart on all its flanks. Industry specific engines with creative industry specific algorithms will slowly take over the search industry. Think about it. Does it make any sense that we go to the same place to find information on printer drivers that we do to find where to buy rice noodles.

As it stands everyone is looking for some conglomeration of big companies to knock off Google. The model for search that is assumed today has already become outdated. A one size fits all approach fits the new web like…well…like one size fits all stuff usually fits. It is just fine if you don’t have ANYTHING else. When some innovative people among us stop chasing Google to catch their breath they will realize they are chasing an anachronism. The demise of Google will come as they start to develop creative niche search engines. And frankly I can’t wait…

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The Minimum Wage Myth

People generally believed that the minimum wage helps the poor but it may just hurt the people it is intended to help. We should all take a minute to think about it.

If we can simply require pay levels, why don’t we just make the minimum wage $20 an hour? Imagine that. No one in the country would earn less that $40,000 a year. The problem of course is some jobs are not worth $20 an hour. If the minimum wage were set at $20 an hour, millions of jobs would just go away. Any job that is only worth $5 an hour would be illuminated or automated. If the minimum wage were $20 an hour how much do you think a meal at McDonalds would cost. Would you pay $17.50 for a Big Mac Value Meal? Fast food would go away or the jobs would be automated. Either way the jobs would be gone. Do you think people are better off with a $5 an hour job or none at all. The same thing is also true, albeit to a lesser degree, when the minimum wage is moved to $7 an hour. If the job isn’t worth $7 an hour it goes away. If it can be automated for less than the equivalent $7 an hour the job will be gone.

Automation doesn’t just happen in big heartless companies. Many jobs are being automated now; bank tellers replaced with ATMs, Receptionists are replaced with automated phone systems. Lets take a look at automated grocery store checkouts. The bar code scanner has made checking out so much simpler that we can do it our selves. If the minimum wage goes to $7 an hour don’t be surprised to see those automated checkout lanes offer a discount (in truth it will be the rest of the prices going up to pay for the wage increase). Is it worth paying someone $7 an hour to swipe product by the scanner. The lanes that have people scanning your stuff will become more expansive. Wouldn’t you take a discount to scan your own groceries? Next time you see one of those self-help checkout lanes think about the minimum wage.

The worst part is it isn’t rich corporate head whose jobs would disappear, it is the very people the minimum wage is suppose to help. If they haven’t been fortunate enough or don’t have the capacity to get a good education then they can’t get a job for $10 or $15 an hour. Raising the minimum wage could mean eliminating the only job they can get. Say goodbye to many “first job” job opportunities.

The usual response to this is that the companies should have the compassion (or however you want to phrase it) to just pay these people more. But companies function just the way we do. You pay for what a product is worth not what the seller deserves. If you found out your gardener had a Doctorate in physics or had a heart rending hardship you wouldn’t just start paying them $40,000 a year to cut your grass. You can’t afford to live your life that way and companies can’t afford to function that way either.

Aaron Feuerstein became famous when he kept workers on the payroll after a 1995 fire destroyed his company, Malden Mills, main factory and they couldn’t produce product. The media loved it but the company of course couldn’t afford it and eventually declared bankruptcy…I know…you never heard that part on the news. Luckily for the workers the people who bought the company and brought it out of bankruptcy kept it in the area. His folly, however well intentioned, could easily have created an opportunity for competitors to gobble up the name and customer base and eliminate or move the production jobs over seas. Some people believe he did it for the positive media attention but even if he meant well his short-term compassion could have led to long-term hardship for the workers. They are very lucky they didn’t lose their jobs permanently.

The steel industry is another example of what happens when you force a company or industry to pay more for a job than it is worth. Steel unions forced high pay for even simple jobs. That forced the industry out of the country. Airline industry pension funds are now showing strains for the same reasons.

The same thing can happen on a much smaller scale. If you manage to talk a future boss into paying you a lot more than that position is worth don’t count on it being a long-term career move.

The impending minimum wage increase will be cause for celebration among affluent politicians but it will just end up hurting the youngest and least educated among us. If you can understand this, if this makes any sense to you, pass this blog along. Email it to friends and family or just explain it to them yourself. If we reward politicians for empty or even damaging legislation because it sounds good they will keep passing bad laws.

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