Category Archives: Economics

Age Discrimination in Tech Job Hiring

That was the title of a discussion on the Cape Cod Technology Council’s LinkedIn page.  I find myself incapable of considering jobs in the context of “age discrimination in technology industries” as distinct from several other tightly linked issues, both personal and national.

What a hornets’ nest, hmmm?  My sister was just laid off from her position as purchasing director and community relations director for a NY based aerospace firm.  So were 37 other professionals over 45.  But then, half the company was over 45.  So you could make the “salary” argument that they could be replaced with younger, cheaper workers.  If it weren’t for the fact that the new, 35 year old CFO asked for a list of employees sorted by birthday a week before the layoff.  Still… not a simple call.

The folks who started and ran the minicomputer revolution (in Massachusetts and elsewhere) are baby boomers and now all in the space with a specter of age discrimination.  Some have probably stayed more technically current than others, and some have more of an ongoing desire (or need) to work than others, but none of them are likely to find new jobs in tech other than short term consulting jobs with no benefits.

This country has serious labor problems.  I don’t think it is age related so much as it is that we have shipped so many jobs overseas.  The federal government has established tax incentives to export full-time American jobs.  On the lower end we’ve exported our manufacturing jobs. On the upper end we’ve exported programming and support jobs.  (Don’t get me started on dealing with tech support in India…)  The whole economic mess and looming problems with Social Security could be solved by revising that tax advantage to bring jobs back to the US and by providing tax incentives to hiring those over, say, 50 or 55. That, coupled with universal healthcare, would put us on a par with the rest of the developed world which protects both the economic and physical health of their people.

Personally, my best tech hires were either very young and enthusiastic or older and more experienced (mostly out of the military).  My worst hires were in the lukewarm middle range. Not saying that is always the case, but there is a lot to be said for hiring people who are eager to do the work and possibly less concerned with milking every last nickel out of the company.  At DEC, Ken Olsen’s philosophy was that you should be paid “fairly” but not at the top of the industry pay scale for the job. In theory that meant that (1) you wanted the job and (2) you could move on when you had mastered the job and there was no place internally for you to move that appealed to you in terms of position or salary.  DEC actively encouraged people to move on and seek their highest level.  That’s not a bad thing, but it assumes there is someplace for you to go.

So here we are in 2009, almost 2010, the economy is a mess, millions of jobs have been lost, and there is no obvious place for many workers to go.  When Stanley tools buys Black & Decker (as was just announced), the manufacturing is presumably still being done offshore but the jobs lost are middle and upper management in the US. Those jobs aren’t coming back under any circumstances.  We need to launch the new new thing.  Big time.  That’s likely to involve massive projects in alternative energy, nanotechnology, genetic engineering, or other technologies.  So we need to stop listening to the religious backwaters playing effete games, the powerful oil interests, and all the other stupidity holding this country back from doing what we used to do best… reinvent the world.  We need top notch education and federal level encouragement to progress down that path. Or we will continue to wither, with our only exports ultimately coming down to what we can still produce in big agriculture.

So how was your garden this year?

carrot

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Thoughts on how Economics is like Biology

I’ve been doing a lot of reading and rereading of economics books as I follow the course of  the current US recession.   Like everyone else,  I’m thinking about how we got here and how the rest of the world got where they are today.   The more I learn,  the less sure I feel about anything.   Having said that,  the one branch of science that gives me comfort is psychology… what we know about how the human mind works,  alone and in groups.

Rather than continuing to work out that train of thought any further at the moment,  a timely article appeared in last Sunday’s Boston Globe: http://tinyurl.com/qsmke9

Interesting article titled “Why Capitalism Fails” and interesting comments.    I’ve been reading the John C. Bogle (founder of Vanguard) 2009 book ENOUGH this weekend.    (Highly recommended)    Bogle also mentions Hyman Minsky,  so this was a very timely article for me.   Communism,  socialism,  and capitalism are all interesting ideas,  each founded on flawed views of human nature as I see it.    For the most part people are good and well-meaning.    But there’s always going to be a Madoff,  a Ponzi,  a management team like Enron or AIG,  profiteers like Merrill Lynch or Putnam Funds,  and so on.

Government is not an economic system,  it is a cooperative means of achieving safety and stability for people who have banded together in a common geography.    As such, ours in the US hasn’t been working all that well lately.    It would appear that some sort of capitalistic system is,  overall,  better suited to achieve human advances,  given human nature.    (For example:  Humans are competitive.  Humans enjoy advancing their own interests and those of their friends and family. )  But that capitalistic system needs a lot of regulation and oversight.    There is an unholy alliance between capitalism and democracy revolving around money and elections.    The US founding fathers recognized that more than we do today,  because they actually discussed and understood the economy and politics of their day.   Our current citizens clearly do not.  Life is very complex today and that complexity is not taught in schools nor is it “covered” in the media.  The media are complicit in the problem.

Economics is a lot like biology in that everywhere you look, an economic niche is filled.    At any given snapshot in time,  the economic system is what it is.    When the system is threatened,  those who are doing well will fight like crazy to keep it as is.    Without enough enforced regulation some people will crowd out more than their share of the economy.   That is what has happened.

As a country we need to rethink the nature of our economy, our industry, our commerce, and our financial system.    If a system costs more than it contributes in benefits to the society it needs serious modification or at least regulation.    Part of me fears there’s a fat chance that’ll happen with the “right wing” having captured the market on fear and mistrust to keep a stranglehold on the USA.    Part of me hopes that our government can develop a bipartisan regulation of our financial system.  I want my country back.

If you read this, please share your thoughts.  Thanks.

(New title in response to Lin Dolin!)

The Next Nobel Prize in Economics

I give the New York Times and its contributors credit for getting my blood flowing in the morning.  http://tinyurl.com/munmbt is a blog entry by Casey B.  Mulligan, an economics professor at U of Chicago, entitled:  Forget a ‘Second’ Stimulus.  Stop the First One!  Having been concerned myself that the stimulus money may or may not be being spent in an optimal fashion, I have no doubt that government stimulus is required.  When nobody is spending or investing, the federal government is the wallet of last resort.  The wheels of the economy must be lubricated somehow. (Yes, I mix my metaphors while I’m having only my second cup of coffee.)

For an “economics professor”, the author does not appear to have been a student of history. Economic disasters like the current situation have always resulted in fear, caution, and reduced proactive economic activity. Does the author think FDR was misguided also?

The role of the federal government is to provide a structure in which individuals and the states can operate safely. The unholy alliance between capitalism and democracy during the Bush administration undid some of the legislation developed after earlier economic explosions. The Glass-Steagall Act doesn’t look so bad in hindsight, does it? The lack of prudent oversight of the country’s financial institutions, the same ones that contributed to that administration’s election, has resulted in worldwide disaster.

The economic system is a complex engine and the current problems must be addressed on several levels. The recovery will not be quick. Recovery depends upon creating jobs and moving income to middle and lower level Americans who have lost jobs to offshore locations or because of the fiscal crisis; encouraging education and research that will build the next big set of economic opportunities over time; and removing Bush’s war from eating away at the nation’s wealth.

The next Nobel prize in economics is likely to be awarded for thinking which is the opposite of Milton Freidman’s trickle-down economics. It will focus not on a waterfall from the wealthy enriching the earth below (which never did work), but on a fiscal osmosis providing a more even distribution of wealth throughout the nation and the world. Greed and leverage have always been the problems. We can’t eliminate the one, but we can legislate against the other.

Barney Frank and Paul Krugman are the guiding economic lights for this country at the moment.  Speaking of which, if you want to read a real economics professor, take a look at Krugman’s blog  http://tinyurl.com/23qv5r