Thursday, May 1, 2014

Marc Faber worries about future of global labor market

My friend Walter Molano argues that, “A rash of new forces is causing serious dislocations to the global labor market, which have dire implications for future political and social stability.” Molano points out, there will be a growing part of the population who will become marginalized because of their lack of specialized skills. 

I am not suggesting that the lack of specialized skills is the only reason for the decline in the US Labor Share of National Income because lower wages and less regulation overseas, massive layoffs in order to boost corporate profits, easy monetary policies, etc. also played their part. 

Fortunately, as Molano opines, there will “always be the technicians and engineers needed to design the machines” as well as the professionals such as doctors, dentists, lawyers, architects, workers, etc. with distinctive abilities who will be able to capitalize on the transformation process. 

However, the question is how to acquire these “special skills” in order to compete successfully in an environment of serious global labor market dislocations. So far, the response of people has been “university education.” 

But in my opinion, not every higher education will prepare young people sufficiently in order to compete successfully in the current challenging labor market environment.

My father’s view was that I would have to work all my life and that to spend a few years at University - provided I qualified - would “inflame” my intellect and provide me with the opportunity to decide in what field I would spend the rest of my life.

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