Saturday, April 11

The New Era: An Overnight Star Decades in the Making

Two articles from the Wall Street Journal point to two parameters of the new era.  The first, by Josh Zumbrun, published April 8, is headlined, Is Your Job ‘Routine’? If So, It’s Probably Disappearing. Right from the caption for the lead photo, Zumbrun lays out the striking news:
Mr. Siu thinks jobs have been taken away by automation, more than by outsourcing. While some manufacturing jobs have clearly gone overseas, “it’s hard to offshore a secretary.”
But as we learn from the article many of a secretary's duties are routine -- physically and cognitively repetitive -- and thus can be automated:
New research from Henry Siu at the University of British Columbia and Nir Jaimovich from Duke University shows just how much the world of routine work has collapsed. The economists released a paper today, published by the centrist Democratic think tank Third Way, showing that over the course of the last two recessions and recoveries, a period beginning in 2001, the economy’s job growth has come entirely from nonroutine work.
This puts America's current "jobless recovery" in a new light: 
While many jobs have a mix of routine and nonroutine tasks, the basic classification that Mr. Siu and Mr. Jaimovich use is clear, and the results when jobs are sorted along these lines are striking. In the most recent recession, routine jobs collapsed and simply have not recovered, with employment in both cognitive and manual jobs down by more than 5% if the tasks are mostly routine.
“Historically these occupations rebounded,” Mr. Siu said. “It suggests a startling fundamental shift in the way the labor market is behaving.”
Plenty more in the report, including eye-popping graphs.  The classification system the study authors developed might be open to challenge.  And at least one of the study's implications, which is that there's going to be a large permanently unemployed segment of society for some time into the future, will surely be politicized by Liberals.  But the study's overall conclusion suggests the long-predicted seismic shift in the labor force is actually upon us and that it's by no means limited to the assembly line.  

The second report, filed April 10 by Andria Cheng at the Journal's Market Watch, is headlined Why the California Drought Matters to the Fashion Industry.  It's mostly about how California's blue jean industry is retooling its water-intensive manufacturing processes for the era of water scarcity:
“(The) water issue in fashion in Los Angeles is a big deal,” said John Blank, economic adviser to the California Fashion Association, a trade group. Premium denim “requires water. It is all about that processing. It is the repeated washing to get the premium look. This is what people pay for.”
Southern California produces 75% of the high-end denim in the U.S. that is sold world-wide, Mr. Blank said. The Los Angeles area, home to companies like American ApparelAPP +3.11%, generates $18 billion of revenue from local fashion manufacturers, and premium denim accounts for 8% to 10% of that total. The area employs about 200,000 people, making it the largest U.S. fashion manufacturing hub, Mr. Blank said.
But who knew how much H20 it took to make jeans?  Quite a bit, it turns out, as you'll learn from the report.

The seismic shift here relates to the new awareness of virtual water -- a concept virtually unknown five years ago. Droughts have come and gone in California, but once they ended industries reverted to water use as usual.   No more.  Cheng reports that the big jean makers headquartered in California are making permanent water conservation changes that will affect their manufacturing processes not only domestically but also worldwide -- a farsighted decision, given that going forward offshore plants will be based in increasingly water-stressed regions of the world.

Yet just a year ago industries that were known as big users of water, such as beer makers and water bottlers, seemed pretty much alone in the forefront of innovative water conservation measures. From the Journal report, obviously the field is now getting crowded with industries that one wouldn't automatically assume are big water users. And if the report is any indication, these companies are very hip, very much aware of the meaning of virtual water. .

Cheng also discusses, briefly, the impact of California's drought on the state's cotton agriculture, but while interesting it's not surprising.  The surprise is that the historic drought quickly pushed water-intensive industries in the state to completely re-think water.  There is no going back to normal for the companies.  Clearly, they know that to survive they must operate on the assumption the drought in California is the new normal for humanity.


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