The Jobs LandscapeWe published this on June 27, 2016,
My last post was about the transition experiences of veterans. I hope some of you found it helpful and also completed the survey. Even though it might not be evident how it will happen, and it is not evident to me, I believe the insights gleaned from the survey will be used to construct programs that will assist the transitions of future veterans.
While that post was about individual experiences, this post will be about the macro economy. Veterans with 20 or more years of service may not fully appreciate the changes that have occurred in the economy during their time in uniform. It does not take 20 years to have this feeling either. During my brief 6 years of service, there were times when I felt that economic changes did not affect me. Of course, with recent force reductions, current service members may not have this same feeling.
Those ending service soon, whether through force reductions or not, should realize that they will be competing in a jobs landscape that has changed since joining the military. This post will provide some numbers about that changing landscape. The source of the data is a recent “Chicago Fed Letter” by a business economist at The Federal Reserve Bank of Chicago – Isaac Sorkin. (The letter can be found here.) The article is short – only 4 pages – and not very wonky; it is an easy read. Before presenting the numbers, I feel that I must disclose my distrust in economic forecasts.
I do not put much credence in economic projections, especially those by the Federal Reserve. The definition of “Central Bank” in a book that came out last November – The Devil’s Financial Dictionary by Jason Zweig – summarizes my feelings:
A group of economists who believe that their current forecasts will turn out to be accurate even though their past forecasts have been unreliable, that their present policies will succeed even though their past policies have failed,…..
An interesting podcast about the book is here. That said, some projections may be useful, and some people think that they are useful; I am not one of them. Before this gets too political, which it almost always does with the Fed, I will end this digression.
Despite a healthy amount of skepticism toward economic predictions, I keep up to date with other economic news. Not surprisingly, the Sorkin letter is not about predictions; it is about what has occurred in the economy.
According to the article, over the last 25 years, pay decreased by 2.9 percent, while nonpay compensation increased by 1.5 percent, resulting in a net decrease of 1.4 percent in job value. (The author used his own measuring techniques to arrive at these numbers, which are open to debate.) Nonpay factors include “benefits, working conditions, the structure of schedules, (and) the “feel” of the firm.” As the article points out, the decrease in pay may be attributable to shifts away from higher paying sectors to lower paying sectors.
The sectors with the largest changes are manufacturing and health care. Manufacturing, as a share of total employment, has decreased by 9 percent, while health care has risen by 5 percent.
What is the takeaway from these numbers? Some service members will look for jobs in manufacturing. These numbers suggest that extra effort may be needed to join that sector. Conversely, people joining the health care sector may have increased negotiating power for salary and benefits. If you are not sure what sector you are interested in, the article contains a graph of the desirability of sectors, based on the author’s calculations.
Maybe an individual will read the Chicago Fed Letter and decide to be an economist. This route will most likely require a PhD. All that work should pay off in the end, however. While many jobs require accuracy most of the time, an economist’s projections can be incorrect 100 percent of the time and he or she will remain gainfully employed.
Ok, enough hyperbole.
Aaron Hartfield served in the Army from August 2005 to August 2011. He deployed with the 19th Engineer Battalion out of Fort Knox to Iraq from 2006 to 2007, and then to Afghanistan from 2009 to 2010. He graduated in May 2015 from Baruch College, which is located in New York City. He currently lives and works in Houston, Texas.