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Personal Finance: Managing your Career
New York: December 04, 2003
By John R. Stephenson

The economy has been on fire recently with third quarter numbers being revised upward to reflect annualized growth of 8.2%. Unemployment remains relatively modest as judged by the standard of typical recessions and the productivity of US companies rose at the fastest pace in 20 years (a 9.4% annualized rate). Given all of the good economic news lately, individuals and businesses should be in a positively buoyant mood. But they're not.

Figure 1: US Productivity

Source: Department of Labor

The reason? The numbers don't tell the whole truth. The unemployment numbers are somewhat misleading since a reclassification in the official numbers has been happening for some time now. Many unemployed people are being reclassified as disabled (due to previously unqualified reasons such as back pain and mental disorders) which has reduced the numbers of people showing up on the official unemployment roles. This, of course, has a desired political consequence. The economy appears better than it really is. If all of the newly-classified disabled workers were counted in the official unemployment statistics, the actual unemployment numbers would be close to 8 percent, ranking this recession as a very deep recession rather than a mild one.

Not only is the unemployment situation in this country worse than we are led to believe, but this increase in productivity is happening without a corresponding increase (in most cases a decrease) in the number of workers required to maintain or even grow economic output. Intel's plant in New Mexico has doubled production over the last five years without adding a single worker. The technological revolution that the Internet promised is not dead, it is, in fact, alive and much more pervasive than most people realize. With a satellite overhead, it is just as convenient for companies to talk and work with knowledge workers in other parts of the world as it is with employees down the street. The result? India has been a beneficiary of US service jobs and China the beneficiary of manufacturing jobs. Everything from call centers (where they train Indian nationals to say that they are calling from Houston, Texas) to investment research reports, medical diagnosis and tax return preparation is being done offshore. Maybe not today, but soon, your job will be in jeopardy. It is not a matter of if, but rather, when. There is no way you can compete with people who are able and willing to work for a tenth or less of what a domestic worker can work for.

Think that, I am exaggerating? Think again. Consider the ongoing debate about tariffs, whether they are about steel or garments made in China. This debate is about one thing - jobs. This is big stuff and there is precious little that governments can do about it except try and erect tariff barriers and hope that the problem goes away. It won't. President Bush isn't acquiescing on the steel tariffs because the domestic producers have become more competitive; he is trying to avoid retaliatory tariffs as an election year nears.

So, what to do? First and foremost, you must start thinking about what you can do to build your own franchise. Sure you may have a great job today but it could be gone tomorrow. Consider yourself on loan to your current employer. Think about building a portfolio of accomplishments rather than a traditional career. When journalists lose their jobs they have a portfolio of clippings that they can share about their work with prospective employers. What do accountants do when they lose their jobs?

The keys to career success in the future will be to develop a portfolio of accomplishments that you can share with prospective employers as well as a creative and flexible approach to work. You should have a pitch that can get prospective employers salivating within five minutes about what you can do for them. Creativity will be the new dynamic that North American business models will be based around, not productivity. There's just no way to compete with well-educated overseas service professionals who can work for a tenth of your salary. Creating rich customer experiences is much harder to duplicate.


StephensonFiles is a division of Stephenson & Company Inc. an investment research and asset management firm which publishes research reports and commentary from time to time on securities and trends in the marketplace. The opinions and information contained herein are based upon sources which we believe to be reliable, but Stephenson & Company makes no representation as to their timeliness, accuracy or completeness. Mr. Stephenson writes a regular commentary on the markets and individual securities and the opinions expressed in this commentary are his own. This report is not an offer to sell or a solicitation of an offer to buy any security. Nothing in this article constitutes individual investment, legal or tax advice. Investments involve risk and an investor may incur profits and losses. We, our affiliates, and any officer, director or stockholder or any member of their families may have a position in and may from time to time purchase or sell any securities discussed in our articles. At the time of writing this article, Mr. Stephenson may or may not have had an investment position in the securities mentioned in this article
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