Unemployment and the Digital Divide

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Unemployment and the Digital Divide

In this article in TechCrunch, you will read an interesting look at how Silicon Valley and the march of technology are causing a Digital Divide.

Every online sale takes away from brick-and-mortar business just as Wal-mart has run over mom-and-pop stores, each resulting in empty storefronts and unemployment. When we start automating basic jobs - like robots to make fast food burgers - we have to realize that the unemployed and the unemployable will grow. (There 's a great article in The Atlantic about what it's like to be unemployed for an extended time.

As more jobs become 1099 (contractor jobs), more and more will make less and less. Workers shifting from W-2 (an employee) to 1099 will experience anxiety over the loss of benefits and a steady paycheck. There's more to being a contractor than just performing the tasks in the contract. You have to market yourself for the next contract.

You can't blame the Administration for not creating jobs. It's not what any Administration is good at. And they are up against a lot of factors. Shovel ready jobs take months to move a mound of dirt. Politics get in the way by adding needless hurdles.

Seth Godin made the case in his book, Linchpin, that the free education system was designed to create consumers and factory workers. When the masses are out of credit, our consumer spending index crashes. And without factories our workers have no where to work. This is the foundation of today's problem.

The massive layoffs that we have seen in telecom from the synergies of the mergers have resulted in many unemployed. But also underemployed and unemployable. By that I mean, there are many that were earning 6 figures, who simply cannot find another position that pays that. Certainly, even as a consultant (the word many unemployed use instead of job-seeker) trying to grab a 6-figure salary is a challenge. Unemployable means that the worker does not have a skill set that is valuable in today's workplace.

[Blogger's note: I could make the case that most of these mergers have not resulted in any noticeable consumer benefit.]

For example, Florida's economy tanked because it has been (and continues to try to be) based on real estate development. So construction workers, real estate agents, mortgage brokers and title workers lost jobs. The new jobs are paralegals, bankruptcy and foreclosure lawyers and credit-repair specialist.

The start-up world in Tampa Bay needs designers, programmers, business minds and venture capital. Those are skills that are scarce in the job pool.

That's the unemployable issue. We have seen the under-employed issue before. In Florida, that issue is dragging on the housing market because without cash it's difficult to buy a condo - even a foreclosure. And as the larger employers - the governments, schools, telecom, real estate industry - layoff, the result is under or un-employment.

As we make more and more tools of productivity and couple that with a flat world where we do not value the worker, the American economy is going to have a huge Digital Divide. To heck with whether or not they all have broadband, what will they do with it? Other than buying stuff on Amazon or playing on Facebook (or Google+) or comparison shopping to save every dime, broadband may not make that much difference in the economy.

Broadband can offer benefits but it would need to be coupled with a desire to connect, a desire to learn, and the capacity for self-education. Plus, we all have to become marketers and salespeople - marketing our skills online and selling ourselves into 1099 projects. Most people do not have these skills. Hence, why jobs are put on a platform like eLance.com and the bidding process begins. [Blogger's note: I won't get into the price war on creative jobs in this post.]

For all the talk about Indeed.com and Monster, the desirable jobs are not online. They are available mainly through your network. Another skill for workers to learn (and master). Another time consuming task to be done, when we are already stretched for time and stressed out.

As we battle at every local government over education (and other spending), we may find that we are sliding into a third world. The divide grows between the haves and the have-nots. It's funny that the US is exporting the American Dream abroad, when it might not even be available at home to many, including those serving in the Armed Forces delivering the Dream abroad.

Immigrants seem to take to the American Dream better than many who were born here, especially those with roots a few generations old. How do we transfer that passion for success to inner city and poverty stricken areas?

I don't have the answers, but I do know that no one in DC has the answers either. I'm not even sure that anyone in DC knows what the problem is. When Senator McConnell states that the President owns the economy (and the insuing problems), I have to ask, "Why isn't it Everyone's problem?" I know the answer is politics, but this is America. Shouldn't we all be working to make it better instead of just working to make a buck? Who knew that America would become the Land of the Selfish Bastard.

In Tampa Bay, a group of us talk about the issue of growing start-ups often. Start-ups are the engine for job growth and economic prosperity, but take a lot of elements to grow (kind of like a farm). There are very few hotbeds for this incubation - Silicon Valley, NYC, Boston, Austin, and RTP. How do we make it spread?

UPDATE: Gary Kim writes that while the Wireless Industry is booming - revenues have grown 28% since 2006 - it's employment numbers are dropping by 20% -- even amid the 4G roll-out. "The disconnect between employment and industry growth reflects the broader head winds lashing the U.S. job market, as consolidation, outsourcing and productivity gains from new technology and business methods combine to undermine job growth," the Wall Street Journal says. BTW, it's mainly non-union workers that shrunk.

In another note: Rich Tehrani writes that 71% of Austin Companies Complain of Tech Worker Shortage. So Dice.com will be hosting a Job Fair at the ITEXPO in Austin in 2 months!

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