BLS

Cutting Some Slack: The “College Bubble” Explained

Phillip Nones Demographics, Economics, Education, Employment, Human Resources, Social Commentary , , , , , , , , , , , ,

huThere are several “inconvenient truths” contained among the details of a recently released synopsis of college education and work trends, courtesy of the Heritage Foundation. Let’s check them off one-by-one.

The Cost of College

This truth is likely known to nearly everyone  who has children: education at four-year educational institutions isn’t cheap.  Here are the average annual prices for higher education in the United States for the current school year (includes tuition, fees, housing and meals):

  • 4-year public universities (in-state students): ~$19,550
  • 4-year public universities (out-of-state students): ~$34,000
  • 4-year private colleges and universities: ~$43,900

These costs have been rising fairly steadily for years now, seemingly without regard to the overall economic climate. But the negative impact on students has been muted somewhat by the copious availability of student loans — at least in the short term until the schedule kicks in.

The other important mitigating factor is the increased availability of community college education covering the first two years of higher education at a fraction of the cost of four-year institutions.  Less attractive are “for-profit” institutions, some of which have come under intense scrutiny and negative publicity concerning the effectiveness of their programs and how well students do with the degrees they earn from them.

Time Devoted to Education Activities

What may be less understood is the degree to which “full-time college” is actually a part-time endeavor for many students.

According to data compiled by the Bureau of Labor Statistics over the past decade, the average full-time college student spends fewer than three hours per day on all education-related activities (just over one hour in class and a little over 1.5 hours devoted to homework and research).

It adds up to around 19 hours per week in total.

In essence, full-time college students are devoting 10 fewer hours per week on educational-related activities compared to what full-time high school students are doing.

Lest this discrepancy seem too shocking, this is this mitigating aspect:  When comparing high-schoolers and full-time college students, the difference between educationally oriented time spent is counterbalanced by the time spent working.

More to the point, for full-time college students, employment takes up ~16 hours per week whereas with full-time high school students, the average time working is only about 4 hours.

Full-Time Students vs. Full-Time Workers

Here’s where things get quite interesting and where the whole idea of the “college bubble” comes into broad relief. It turns out that full-time college students spend far less combined time on education and work compared to their counterparts who are full-time workers.

Here are the BLS stats:  Full-time employees work an average of 42 hours per week, whereas for full-time college students, the combined time spent on education and working adds up to fewer than 35 hours per week.

This graph from the Heritage Foundation report illustrates what’s happening:

CT

Interestingly, the graph insinuates that full-time college students have it easier than many others in society:

  • On average, 19-year-olds are spending significantly fewer hours in the week on education and work compared to 17-year-olds.
  • It isn’t until age 59+ that people are spending less time on education and work than the typical 19-year-old.

No doubt, some social scientists will take these data as the jumping off spot for a debate about whether a generation of “softies” is being created – people who will struggle in the rigors of the real world once they’re out of the college bubble.

Exacerbating the problem in the eyes of some, student loan default rates aren’t exactly low, and talk by some politicians about forgiving student loan debt is a bit of a lightning rod as well.  The Heritage Foundation goes so far as to claim that loan forgiveness programs are leaving taxpayers on the hook for “generous leisure hours,” since ~93% of all student loans are originated and managed by the federal government.

What do you think? The BLS stats don’t lie … but are the Heritage Foundation’s conclusions off-target?  Please share your thoughts with other readers here.

Are U.S. warehouse jobs destined to go the way of manufacturing employment?

Phillip Nones Economics, Employment, Human Resources, Manufacturing, Social Commentary , , , , , , , ,

Even as manufacturing jobs have plateaued or fallen in certain communities, one of the employment bright spots has been the rise of distribution centers and super warehouses constructed by Amazon and other mega retailers to accommodate the steady rise of online shopping.

In my own region, the opening of Amazon distribution centers in Maryland and Delaware were met with accolades by local business development officials, who figured that new employment opportunities for entry level workers would soon follow.

And they have … to a degree. But what many people might not have expected was the rapid rise of robotics usage in warehouse operations.

In just the past few years, Amazon has quietly gone about purchasing and introducing more than 30,000 Kiva robots for many of its warehouses, where the equipment has reduced operating expenses by approximately 20%, according to Dave Clark, Amazon’s senior vice president of worldwide operations and customer service.

An analysis by Deutsche Bank estimates that adding robots to a new Amazon warehouse saves approximately $22 million in fulfillment expenses, which is why Amazon is moving ahead with plans to introduce robots in the remaining 100 or so of its distribution centers that are still without them.

Once in place, it’s estimated that Amazon will save an additional $2.5 billion in operating expenses at these 100 facilities.

Of course, robots aren’t exactly inexpensive pieces of equipment. But with the operational savings involved, it’s clear that adding this kind of automation to warehousing is kind of a slam-dunk decision.

Which helps explain another move that Amazon made in 2012. It decided to purchase the company that makes Kiva robots — for a cool $775 million.  And then it did something else equally noteworthy:  it ceased the sale of Kiva robots to anyone outside the Amazon family.

Because Kiva was pretty much the only game in town when it came to robotics designed for warehouse pick-and-ship functions, Amazon’s move put all other warehouse operations at a serious disadvantage.

That in turn created a stampede to develop alternative sources of supply for robots. It’s taken about four years, but today there are credible alternatives to Kiva brand robots now entering the market.  Amazon’s uneven playing field is getting ready to become a lot more level now.

But the other result of this “robotics arms race” is the sudden plenteous availability of new robot equipment, which companies like Macy’s, Target and Wal-Mart are set to exploit.

The people who are slated to be the odd people out are … warehouse workers.

The impact could well be dramatic. According to the Bureau of Labor Statistics, there are nearly 860,000 warehouse workers in the United States today, and they earn an average wage of approximately $12 per hour.

Not only is the rise of robot usage threatening these jobs, thanks to the sharp increase of minimum wage rates in areas near to some major urban centers is putting the squeeze on hiring from a wholly different direction. It’s a perfect storm the seems destined to blow a hole in warehouse employment levels in the coming years.

Thinking back to what happened to manufacturing jobs in this country, it’s seems we’ve seen this movie before …

Journalism’s Slow Fade

Phillip Nones Business, Demographics, Economics, Employment, Media, Media Consumption, Social Commentary, Social Media , , , , , , , , , ,

jjLate last month, the 2016 Lecture Series at the Panetta Institute for Public Policy in Carmel, CA hosted a panel discussion focusing on the topic “Changing Society, Technology and Media.”

The panelists included Ted Koppel, former anchor of ABC News’ Nightline, Howard Kurtz, host of FAX News’ Media Buzz, and Judy Woodruff, co-anchor and managing editor of the PBS NewsHour show.

During the discussion, Ted Koppel expressed his dismay over the decline of journalism as a professional discipline, noting that the rise of social media and blogging have created an environment where news and information are no longer “vetted” by professional news-gatherers.

One can agree or disagree with Koppel about whether the “democratization” of media represents regression rather than progress, but one thing that cannot be denied is that the rise of “mobile media” has sparked a decline in the overall number of professional media jobs.

Data from the Bureau of Labor Statistics can quantify the trend pretty convincingly. As summarized in a report published in the American Consumers Newsletter, until the introduction of smartphones in 2007, the effect of the Internet on jobs in traditional media, newspapers, magazines and book had been, on balance, rather slight.

To wit, between 1993 and 2007, U.S. employment changes in the following segments looked like this:

  • Book Industry: Net increase of ~700 jobs
  • Magazines: Net decline of ~300 jobs
  • Newspapers: Net decline of ~79,000 jobs

True, the newspaper industry had been hard hit, but other segments not nearly so much, and indeed there had been net increases charted also in radio, film and TV.

But with the advent of the smartphone, Internet and media access underwent a transformation into something personal and portable. Look how that has impacted on jobs in the same media categories when comparing 2007 to 2016 employment:

  • Book Industry: Net loss of ~20,700 jobs
  • Magazines: Net loss of ~48,400 jobs
  • Newspapers: Net loss of ~168,200 jobs

Of course, new types of media jobs have sprung up during this period, particularly in Internet publishing and broadcasting. But those haven’t begun to make up for the losses noted in the segments above.

According to BLS statistics, Internet media employment grew by ~125,300 between 2007 and 2016 — but that’s less than half the losses charted elsewhere.

All told, factoring in the impact of TV, radio and film, there has been a net loss of nearly 160,000 U.S. media jobs since 2007.

employment-trends-in-newspaper-publishing-and-other-media-1990-2016

You’d be hard-pressed to find any other industry in the United States that has sustained such steep net losses over the past decade or so.

Much to the chagrin of old-school journalists, newspaper readership has plummeted in recent years — and with it newspaper advertising revenues (both classified and display).

The change in behavior is across the board, but it’s particularly age-based. These usage figures tell it all:

  • In 2007, ~33% of Americans age 18 to 34 read a daily newspaper … today it’s just 16%.
  • Even among Americans age 45 to 64, more than 50% read a daily newspaper in 2007 … today’s it’s around one third.
  • And among seniors age 65 and up, whereas two-thirds read a daily paper in 2007, today it’s just 50%.

With trends like that, the bigger question is how traditional media have been able to hang in there as long as they have. Because if it were simply dollars and cents being considered, the job losses would have been even steeper.

Perhaps we should take people like Jeff Bezos — who purchased the Washington Post newspaper not so long ago — at their word:  Maybe they do wish to see traditional journalism maintain its relevance even as the world around it is changing rapidly.

Plain as Day: The Labor Market Recovery is Non-Existent

Phillip Nones Uncategorized , , , , , , , , , , ,

The single most accurate indicator of labor-market health is the employment-to-population ratio.

Unfortunately for the United States, it’s not looking any good … and it hasn’t for over two years.

People say a picture is worth a thousand words.  In this case, a chart is worth many more.

[Actually, it would be nice if this chart got all of the politicians to stop blubbering away with their thousands of words, and instead take some time to truly ponder what the data is telling us!]

Employment-to-Population Ratio
Can politicians cut the B.S. and focus instead on what this chart is telling them? Don’t hold your breath.

The 24/7 Work Week

Phillip Nones Uncategorized , , , , , , , , ,

The 24/7 work weekIf you’re thinking that work demands are increasingly encroaching on your life at home … you’re not alone.

According to the U.S. Department of Labor’s Bureau of Labor Statistics in survey results released earlier this summer, more Americans are using their weekends to get more done on the job. The results came from a survey that involved interviews with ~13,200 people over the age of 15.

Non-self-employed persons in office or administrative positions are less likely to be working on weekends. Only 20% of those folks report doing weekend work, compared to ~82% of them working on weekdays either full- or part-time.

But on a typical working day, nearly one in four employed Americans reported that they do at least some of their work at home. Not surprisingly, self-employed people are likely to do so, but those working in business management are more likely to do so as well.

The BLS reports that employed men spend, on average, 8 hours and 9 minutes per day on work or work-related activities. That’s a bit more time than employed women spend on work-related activities (their daily average was 7 hours and 26 minutes).

However, the trajectory appears to be upward for women and downward for men … so it may not be long before any difference between the genders completely disappears.

And for those people who work more than one job … that’s where weekends have lost most of their meaning as a time for R&R, because fully half of the people with multiple jobs find themselves working weekends.

As things evolve, it’s becoming pretty clear that the “Protestant Work Ethic” for which our society is so well known remains pretty robust, 200+ years on.

It reminds me of how a teacher of Russian History explained things to us students in class at Vanderbilt University back in my college years. Speaking of Southern Europe, this professor claimed, “People work to live” … whereas in Northern Europe, “They live to work.”

For some folks, as their working years grind on, they might be thinking that the whole enterprise has become a little sucky. But hopefully, most of us are performing tasks we like or love, so that it doesn’t seem quite so much like “work” … or apply whatever other coping mechanism does the trick!