Tuesday, March 28, 2017

How Moving Has Changed

How we move today is one reason why the labor market has changed.  The do-it-yourself movement put a lot of people out of work!

When I was a kid, moving was an everyday occurrence. In the new suburbs Across America, moving vans shuttled people's possessions back and forth. Shiny new moving trucks with names like Atlas, Mayflower, and North American Van Lines showed up at your door packed all your belongings and moved them to another city or state.  Every week, a new family moved in or moved out, in postwar mobile America.

Of course, back then when America was great, (sarcasm light is LIT) companies would pay for workers to move to new locations. Or at least they would pay for salaried employees to move, or at least valued salary employees.  As my father once put it, "we even pack the garbage," as the moving company paid for everything including people hired to pack all our junk.

It wasn't always nirvana, though.  On one occasion, North American Van Lines lost half our possessions in the move, apparently due to a dispute with the driver.  Also common the past, all your possessions will be unloaded from the van and put in the warehouse, and then later reloaded into another van for later shipment.  Often, things got lost in the warehouse or stolen, or your couch would become the new break room couch for a month for the warehouse employees.

Today, commercial moving vans are a rarity.  And the major brand name moving companies have shabby rusted broken-down vans (moving company trailers are known as "vans") which appeared to be so old that they might be the same ones my parents used back in the 1960's and early 70's.

Today we have more choices in moving, and people seem more inclined to move themselves, as corporations no longer will pay the staggering fees to move your possessions.  The cost of hiring a moving company to move your things can run into the thousands or even tens of thousands of dollars. For most people this is simply not affordable and their possessions don't warrant spending that kind of money to move them.

As I noted in an earlier posting, people are using new means of moving their possessions including the use of storage pods or buying portions of a tractor-trailer load from a freight company.  We have used the pods with some success.  The cost was reasonable and since we packed them ourselves we could ensure that things were not broken.  Also, since they were not unloaded at any time during the process, wouldn't have to worry about our items being stolen or handled.

Our neighbor use the same company, ABS Freight, in a different way.  They purchased a portion of a tractor-trailer load and the company baced a tractor trailer into their yard.  They filled up a portion of the truck and a movable wall was installed to seal off their possessions from other freight.  At the other end, the trailer was then parked at their new house where they unloaded their household possessions.  This also worked well, although there were fairly limited time windows for loading and unloading, unlike the storage pods.

Today, self moving services like U-Haul, Penske, Ryder, Budget, and the like are more popular than ever.  When we moved to New York, we use two of the largest U-Haul trucks plus a trailer to move our positions.  It was inexpensive but it was exhausting work to load and unload all of this stuff.  UHaul does offer to hire people to help you load and unload, and at the unloading and we did have some local day laborers help us unload, although they did drop my photocopier out of one of the trucks.

It is interesting to me that we have become more of a "do-it-yourself" generation than in the past.  In the olden days, if you wanted to buy something that was bigger than your car trunk you went to the store and the nice man would have the delivery boys bring it to your home where they would carry it up the stairs and install it.  Today, we back our pickup truck up to the loading dock and pretend that we are part-time truckers.

I trace this entire mental attitude back to the stagflation era of the 1970s.  If you didn't live through that era, it was a time when prices were constantly going up and wages were depressed.  Inflation was in the double digits.  People started trying to do things themselves rather than hire people, often with predictable results.

Of course, this meant that more and more people lost their jobs, as more people started to do home repairs and car repairs on their own.  The local department store laid off their delivery people, as more and more people started picking up things in their pickup trucks and vans which became quite popular at that time, despite really high gas prices.

And it was about that time that moving companies started to face difficulties.  The post-war baby boom era fueled the moving van business.  However as our country settled down people moved less and less, and demand dropped off.  And given the high cost of living and the fact that few companies were willing to reimburse this expense, more people started moving their household possessions by themselves.

If you want to know where the jobs went, this is one place they disappeared to. Today, we want the lowest possible price on consumer goods and are willing to put up with inconveniences rather than have full service.

I was at the Wholesale Club the other day and watched a young family try to load an enormous flat-screen TV into their small hatchback car.  It would have been possible to fit the television in the car if they were willing to tie the hatchback closed with a piece of rope.  However, there would be no place left for the children to sit.

Back in the day, you would go to the local television store which would be on Main Street in your small town and purchase a television.  You wouldn't dream of picking it up and putting it in your car to take it home, even if it would fit in the trunk.  And of course you didn't own a van or pickup truck, as those only belonged to people who delivered things for a living.

The man who owned the TV store would have old Gus, who hung out back, bring your television to your home in a van brightly painted with the name of the television store.  He and his assistant would carry it into your house, set it up, plug it in for you, and show you how to operate it.

Today, old Gus is long dead and nobody replaced him.  Delivery services are largely obsolete other than FedEx, United Parcel, and the Postal Service, which bring us cardboard boxes of consumer goods which mostly originated from China.   And since everyone is working these days, Mom isn't home to be there when Gus shows up with the new TeeVee.   We want cash-and-carry these days, including all the junk we bring home every weekend from the "big box" lumberteria.

I am not decrying this new trend, as I appreciate low prices on consumer goods as much as the next person.  Today, we buy almost directly from the manufacturer with very few intermediaries between us and the source.  However, this does mean when something goes wrong, there was no customer service to help us out - something that most people are keenly aware of these days.

Companies discovered that it's a lot easier to have a generous return policy then to have customer service or a repairman.  Maybe in the old days with tube televisions, you would send old Gus or Jim the repair guy out there to replace a tube and get your TV back in working order.  Today, solid state electronics rarely lend themselves to repair, or at least the local repair guy is not equipped to deal with it, not having the correct tools and testing equipment.  Better to just replace the broken flat screen TV and ship the old TV back to the factory for repair or to an authorized service center where they can diagnose the problem.  Or, it is just thrown away is part of the cost of doing business, as it costs a lot less than old Gus and Jim the repair guy, who with their hefty pensions and benefits today cost too much to employ.

There has been a lot written lately about where all the middle-class jobs have gone.  People say that the jobs are going to China and that factory production has gone overseas as well.  However, the United States remains one of the largest manufacturing countries in the world and is slated to outpace China in the next two years despite Donald Trump's best efforts.

Similarly, a lot of people point to automation as being the cause of our nation's woes.  Robotic factories employing foreign-made robots assemble electronics and automobiles with fewer than half the number of people required as in the past, sometimes far, far less.

But I think there's another factor at work here.  We used to have an awful lot of people in the service industry in every small town who did things for us, whether it was operate an elevator, deliver a package, style our hair, pump our gas, or wash our car.  Every business had someone who answered the phones and opened the mail.

Today, and the name of cost-cutting, we've eliminated number of these jobs and replaced them with automated systems, or just merely eliminated the service entirely.  Very few people today remember the era of gas jockeys pumping your gas, unless you live in one of the few States which still require them.  "Self-serve" gas stations were another product of the stagflation era of the 1970's when cutting costs meant laying off pump jockeys for good.

Some folks are talking about instituting a guaranteed minimum income as a means of offsetting the loss of jobs.  The idea is as simple as it is ludicrous.  Everyone would be paid a fixed amount of money which would be just barely enough to live on.  People could then choose whether they wanted to work and make more money, or just stay home and live on this minimal stipend.

If you think this proposal is "logical" then think for a moment what 315 million (the population of the United States) multiplied by ten thousand dollars (the number bandied about by the guaranteed income people) would total.   And then think of what the cost per citizen would be (the same as the money given away) and it starts to become clear.   Those who would work would be taxed in an amount equal to not only their own "free money" but that of others.   Taxes would have to go up substantially to cover this cost.   The incentive to work would be depressed, the incentive to not work or work under the table would be great.   But we already have that today - the subject for another posting.

While it is true that we may need to find jobs for all these people whose livelihood will be replaced by automation, perhaps other things can be done.  After World War II, Japan took a course of creating make-work jobs such as "elevator lady" who would stand in the elevator and bow politely as you entered, ask you what your floor was, and then push the button for the floor.  It was an entirely make-work job, but the government encouraged companies to create these positions so that the country would have full employment.

I'm not saying that that would work in the United States or that that's what we should do.  Creating make-work jobs would just increase the cost of services and raise prices for everyone.  Also, I think it is a little too early to sound the alarm on unemployment, with unemployment rates in this country at dramatically low levels at the present time.  In fact there are labor shortages in many parts of the country today.

The real problem will be to find jobs for people like old Gus and Jim who have no marketable skills are obsolete technical skills.   Back in the days of Mayberry, RFD, guys like Gus and Jim could hang out at the local gas station, get odd jobs and get by.  We never asked what would happen to them when they retired, as they likely drank themselves to an early grave or died of smoking-related diseases.

The Gus's of the world still exist today, and in an economy that does not value unskilled labor, they will have a tough time of it.   Compounding this is that Gus no longer wants to take a job he deems beneath his dignity.   Cleaning houses, working construction, picking crops, and mowing lawns are deemed to be work than only immigrants would do, when back when "America was Great" Gus would willingly take such jobs, if there was a pint of cheap whiskey offered as a bonus.  My ancestors worked as servants and gardeners.   Today, I doubt anyone in my family (or extended family) would take such jobs.

Raising the minimum wage is also offered as a panacea for our labor problems.   The problem is, the idiots proposing this (and sometimes pushing it through) don't want a 10% raise or even a 20% raise but a 100% raise, nearly doubling the minimum labor rate to over $15 an hour.   As you might expect, this tends to make more automation look like a good idea, and has not caused, but accelerated the trend of installing automated kiosks in fast-food restaurants (Something our European neighbors have been doing for years now).   Fully-automated fast-food machines are then next logical step and are technically feasible today, just not economically feasible unless this $15 minimum wage thing becomes a national reality (not likely today as it was before November 7th).

(Oddly enough, cooking our own meals is the one thing the do-it-yourself movement seems to have failed at.   We all want to do our own "home improvement" projects such as putting up new tile in the bathroom - something that few of us are skilled at - but no one wants to fry an egg.   Guess which saves you more money in the long run?   Subject for another posting!)

Self-driving taxis and trucks are the next issue.   Millions of low-skilled people will be put out of a job.   And since even truckers today text while driving (I kid you not) few will mourn the passing of the human-driven car.

But in the past, many jobs have been eliminated and new jobs created to fill the void.   We lost all these manufacturing and service jobs over the years.  Factories have closed for good.   Jobs went to automation or overseas.   Yet the unemployment rate in this country is at all-time lows.   New jobs are created where old jobs are lost.   The Internet, for example, has created millions of new jobs, however most of them are technical skill jobs dealing with computers or software.

A lot of people, however, make a few bucks creating YouTube videos or even blogging.  There are jobs in "content creation" that don't require coding skills.

So it is hard to say.    Some argue that while the unemployment rate is low, the employment rate is also very low - that is to say, there are a lot of people who are simply not looking for work and have given up.   How do you think guaranteed minimum income would affect that?  Others would point out that wages have also stagnated, and for unskilled labor, gone down, as a result of too much unskilled labor and not enough jobs (supply exceeds demand) and thus while there is "low unemployment" underemployment remains high.

On the other hand, as an optimist, I would point out that the real cost of goods has gone way down in the last 40 years, and thus even the poor have nicer stuff today than we did in the past, and in fact are better fed as well - even obese.  The poor today are living the middle-class lifestyle of the 1950's.

Times have changed before - and jobs eliminated and new ones created.   The uniformed movers of the 1960's may not be very common today, but other jobs have taken their places.   I think it is a little premature to worry about automation decimating the workforce (and decimating means 10%, look it up).   It may very well be that people find new things to do with their time.  That seems to be the way it works out, historically.