WFH will reduce middle management and "prestige" employees as more efficient workflows evolve from the old "filing cabinets and typewriters" methods that some companies are still using to this day.
Automation is coming, and it is definitely coming for the white collar workers who act as human CRUD apps.
The ability to collate, search, and analyze data used to require labor power, it does not anymore.
I watch my partner's experience in accounting and the difference are stark.
There are many many bs steps in accounting with paper that disappear when digital tools are used.
Having physical pieces of paper as a fungible business tool is still something used by a lot of firms but they are simply behind the times, there are relatively simple software solutions for most paperwork needs and this reduces labor power required.
"We've always done it this way" is an excuse for firms that will fall behind other digitally empowered firms.
What does this mean for investors? Don't invest in companies that insist on using filing cabinets.
I know some people who do this kind of work in various organizations.
As far as I (and they) can tell it all should have been automated down to 1/10 or less the staff it takes now decades ago with computers, but their orgs keep getting basically scammed by vendors promising the moon and delivering a mimeograph of a smeared Xerox of a bad photo of the moon, so it never happens—there's constant tool churn, but nothing ever gets faster or better. Anyone internal smart enough to automate any of it themselves either quietly does it some for them and their buddies so they can slack more, or does none at all and tells no-one what they're capable of because it'll just mean more work and management'll probably fuck it up anyway, if not be angry about it.
It's a leadership failure and it seems to be more common than not. Maybe we'll reach a tipping point where such orgs simply die from that kind of thing, but it really seems like we ought to have by now considering how much "low hanging fruit" that couldn't been tackled in the 80s is still around.
Unfortunately the software is so bad and so complex that upon deployment, they realised they couldn't just roll this out for direct access to staff. It is full of travel-industry terminology nobody understands combined with corporate org policy terminology few understand.
So they designated specific staff as "travel managers" who would be the ones to book travel for their group. These people then get special training etc. In practices however none of the managers have time for this so we are all delegating it to admin staff that already do other admin type work for our teams.
And so the whole exercise has brought us full circle to where dedicated staff are effectively manually booking travel for us. And of course then COVID hit so nobody traveled for 2 years after that and we all prefer remote / zoom as much as possible anyway.
The idea "this could all be easily automated so those who don't automate it will go out of business" presumes efficient market theory is true. Markets are not actually efficient. Markets are based on relationships between human beings. And a lot of human beings have a vested interest in things staying exactly the way they are.
that is why i automate some things but in general "keep my head down and my mouth shut". the people who get all angsty and revolutionary about this stuff tend to get fired / laid off / asked to leave / burned out. i know because i used to be one of them.
the people who survive are quiet and don't complain about "leadership failure" as you put it. we do not get paid to point out failures of our leadership. or to do things which would by their very existence imply a failure of leadership. we get paid to do what leadership tells us. our continued supply of health care, shelter, and food depend on it.
if i want to develop my talent / skill, well that is in my free time. i can build robots in my basement and play around with new algorithms and nobody will get mad at me or tell me to stop. now you'll have to excuse me, there is an STM32 board calling my name.
Imagine an economy where there were no ATMs. Any time you wanted cash, you would have to walk to the bank and wait in line to talk to a bank teller and cash a check. And every week you'd be paid by a check. Paper records were collected for everything and an army of employees had to reconcile the records. No spreadsheet software was available.
In fact, the number of bank tellers (not even bank employees) actually doubled since the advent of ATMS:
> The number of human bank tellers in the United States increased from approximately 300,000 in 1970 to approximately 600,000 in 2010. Counter-intuitively, a contributing factor may be the introduction of automated teller machines. ATMs let a branch operate with fewer tellers, making it cheaper for banks to open more branches. This likely resulted in more tellers being hired to handle non-automated tasks, but further automation and online banking may reverse this increase.
But somehow today more people work at banks than in the past, even accounting for population growth. Why would CRUD apps that make some stuff more efficient change this?
The larger a company gets, the more careerists it attracts. For careerists, “number of people managed” is a key performance indicator (and a boardroom/resume bragging right).
The human motivations of decision makers - to advance their own careers by being the manager that manages more people - is completely misaligned with these future efficiency hypotheses
As long as that remains true, we will continue to see bloat and companies hiring way more people than they need.
Perhaps that's not quite the right comparison - even though the population hasnt doubled since 1970, the number of people employed has (80M->160M, approx [0]). Adjusting for that, Bank Teller employment level is basically unchanged.
I think it is hubris to say that anything a human can do cannot eventually be replaced by a machine. When we will actually reach that point is the real question.
Fednow should alleviate some of this.
The number of tellers is expected to drop by 12% over the next decade while general jobs are expected to grow by 5% according to government forecasts btw.
Being a cashier used to be a tougher job because you needed to know all the inventory. Now it’s ok for a grocery store cashier to not know what parsley is.
If automation makes it practical to do an embarrassingly small task in order to provide a value to someone richer, yeah, you can be hired into it. Maybe a lot of people will. But that’s not prosperity that’s capitalism holding you by the balls.
Population growth doesn't account for regulatory changes and it takes a while to automate anything that interfaces with the law because of the inherent risk in getting it wrong. Banks are acutely exposed to this because they're often the ones who are ultimately responsible - they're the default insurance policy against counterparty risk.
All those branches closed during covid. I have 6 within walking distance and there isn’t a human anywhere.
I’m not sure I buy into the bank analogy (probably due more to technology making bank products cheaper/more accessible and thus more customers and thus more bankers) but I definitely buy this.
If you believe fundamentally in basic market dynamics and that humans are generally productive creatures, then any automation that comes about will simply shift where the human labor is most useful, and we will generally always have enough human powered work to go around. The tech and automation is just making it more efficient for everyone.
If I could get quarters form an ATM, there would be no reason ever for me to.
What are people using tellers for?
It hasn't in 250 years of automation.
Psycologically for some it is a massive change - having had numerous colleagues in the past who had core values like "if you are not physically sat at your desk you are not working".
On every metric, excluding commuter congestion and possibly office rental rates - no change.
You can see this principle with ERP implementations - they can literally bankrupt an entire company if you get too ambitious with what can be automated.
Edge cases & changing business context aren't going away.
In my experience, it's the exact opposite. WFH creates more of a fog of war, so companies end up hiring more managers to stay on top of it.
Some employees are great at self-directed WFH, but many others struggle without the physical, social context of the office to get them focused. Again, companies rely on more managers to compensate for those employees who struggle more with WFH.
I know people will say "Just hire people who are good at WFH", but if we transition large amounts of the workforce to WFH then you can no longer pick-and-choose just the good WFH people. You have to deal with the realities of managing WFH at scale.
Senior ICs are split on WFH. Managers who can code are split.
Managers who can’t code are unanimous.
The tactic never seems to be to hire more people to do the actual work though, curious!
It's the most ridiculous thing I've ever seen, so it must either be a legal requirement or maybe the organization had a really bad experience with expense fraud and is now paranoid.
This is all baloney. There is noone organising the information and documents in "modern" companies. There is just a rolling reset of knowledge with an average lifetime of about three years.
> Having physical pieces of paper as a fungible business tool is still something used by a lot of firms but they are simply behind the times,
They are not behind their times. They are using a system that actually works.
Nah, I’ve seen legacy code and how much maintenance it requires. Regular devs are safe.
This has been said over and over. In the 1980's people worried automation would leave lots of people unemployed. And long before in 1931 Keynes [1] predicted we should now be living in a world of abundance. He said our the biggest concern would be how to spend all this free time.
Yet I see people working harder than ever, and burnout is the number one reason for absence of work in many countries.
Every step you automate opens up new possibilities and more employees are needed. I work as a software engineer now for around 15 years. Never have my software reduced costs, because as soon as my software automates something people want more.
Although I'm skeptical, we could really facing a turning point, Keynes made his predictions for 2030, so we'll see :)
[1] Economic Possibilities for Our Grandchildren (1931)
I do have a pet-theory that humans aren't well equipped for long-term 9-5 computer thought work. Anecdotally, I see people burning out in < 5 years with thought work careers. People under 30 packing up their careers to go live in a van or whatever it may be.
There are very few industries that haven't already digitized, the ones you mentioned that have human CRUD apps are relatively rare. Accounting, law, healthcare...who else? Basically nobody.
How many new companies exist now because of automation?
Sure, there are some prestige managers out there, but I think their prevalence is overstated. Most managers I know in tech companies are overworked and have no time on their schedule.
Increasing automation...the increasingly widespread adoption of enterprise software, data analytics, and machine learnings are increasingly rendering office jobs moot as much of the traditional number crunching, document processing, and repetitive analysis performed by office professionals is now being performed by software.
This is not even wrong, in the W. Pauli sense. Just one of the many reasons is enterprise software works less and less for the enterprise that 'rents' it and more and more for the enterprise that controls it.
Everyone hates enterprise software who is on the receiving end of it.
As for the accounting example DM5 uses, ask his partner about when three people have to co-ordinate a fixing a single ppv in a single po. It can take days to fix a single mistake. Meahwhile dozens or hundreds more po's have piled up.
po = purchase order, ppv = purchase price variance 3 people = seperation of duties, because people try to steal.
At this stage I'd welcome any automation in the accounting space but efforts I've seen thus far have not been promising. Domain specific software is tricky - either you get SWE in then they don't know the domain, or the opposite then the code is garbage. That gap means endless meetings and committees about requirements and end user testing in practice even for the most trivial of automations.
Outsourcing is way more likely to kill accounting jobs.
It also removes geographic limiters that drive up the cost of certain pools of labour.
Until some genius writes delete from invoices ...
I don't think that we are nearly close enough to have digital recordkeeping done right.
It's generally a mistake to trust the financial advice of any hedge fund manager, and they usually provide advice that makes the S&P seem like a bad bet.
Looking at the S&P anywhere in the past 100 years makes it look like a pretty solid bet (not even a bet really).
No one ever became wealthy from buy and hold index funds. The returns are relatively low because most people are lazy and it's the easy thing to do. That's why I split my time between active investing (https://grizzlybulls.com) and working on my private business ventures.
e.g. it took 30 years to recover to 1929 levels, then also 30 years to reach the 1960’s peak, in 2010 it fell to mid 90’s levels (all inflation adjusted).
So yes, you’re right but it depends on how long you can wait. Over 50-60 years you should be fine. 20-30 who knows, if you’ve entered just before a peak it might not recover within your lifetime.
At this point, the entire globe has fallen in uncharted economic territory. Anyone projecting certainty about what the future holds is a fool, liar, or both.
The bubble caused by a decade of easy money started to burst last year.
Go look at a stock chart from the last 1Y and you’ll see that the sky has started to fall, and had been falling from just after 1Y and has a long long way to go.
Until inflation is under control and fed tightening stops, housing, equities, and bonds will continue to fall in price. This week almost saw a catastrophic run on the pound and UK gilts and US bonds are flashing warning signs.
The crash started last year and continues with mathematical certainty until the fed pivots.
The stock market's price level is well above where it was pre-pandemic, it's trading at earnings multiples in-line with 30+ year averages [1] (what was the 10Y yield in 1990, might I ask?) because earnings have gone up.
I know being doom and gloom makes you sound smart (to some), but don't fall into the trap of 'everything is shit now because inflation has been high for 20 months'
https://news.ycombinator.com/item?id=33031466
Basically, fu Main Street, got mine. I wonder if they believe the meta-awareness the internet has provided will just go away if they crash tech/social media? That’s where all the progressive undesirables work, after all.
Past pols convinced people “trickle down” was sincere economics, not a bawdy joke. That Reaganomic funneling of wealth to the top was for their own good, and the public now blames modern progressives. A pols dedication to double speak is commendable.
Maybe we just have a different definition of these terms?
I predicted it, too. I saw it coming the exact minute the government starting giving out stimulus and unemployment checks when the pandemic started. Shouldn't I be getting all the credit for realizing this was going to happen a few months into the pandemic.
It doesn't take a genius to figure this whole thing plays out. Burry is just stating the obvious, there's no great amazing calculations made to figure it out.
That one is a mixed bag. There are clearly areas where it is falling - SF, Austin, Boise, a few regions like W Florida... but there are regions where it simply is not (the northeast in particular).
I'd love for that to fall. And let's not talk about rents.
> Through his analysis of mortgage lending practices in 2003 and 2004, he correctly predicted that the real estate bubble would collapse as early as 2007. His research on the values of residential real estate convinced him that subprime mortgages, especially those with "teaser" rates, and the bonds based on these mortgages, would begin losing value when the original rates were replaced by much higher rates, often in as little as two years after initiation. This conclusion led him to short the market by persuading Goldman Sachs and other investment firms to sell him credit default swaps against subprime deals he saw as vulnerable.[14][15][16]
That's the challenge with predictions. If you're off by a day, you'd still be perceived as being right. If the predicted magnitude was 5% off you'd still be perceived as being right. There's no hard and fast rule as far as I can tell about how off you can be and still be considered "right".
The prediction is based on really simple macro too. Nothing is certain except death and timing a bubble pop/price correction is notoriously hard, especially when it’s based on discrete decisions by the Fed to raise interest rates/stop expanding the balance sheet. But it’s been clear for quite some time that the Fed would have to stop that eventually as stopping inflation became more important than stimulating the economy.
I’d much sooner call the people who thought the loose monetary and fiscal policy of the 2010s (and especially during COVID) was a permanent fixture the fools.
Printer is coming, heh.
We should come to terms with the fact that central banks simply can’t raise us out of inflation in short order. It disrupts too much and will cascade. Not to mention politicians implementing policy that directly hinders their efforts.
He was right once a long time ago. Now he's just a charlatan continually desperately trying to capitalize on that one dusty old win.
It's been a little longer than that:
2010: UH OH: Michael Burry Agrees With John Paulson Again https://www.businessinsider.com/michael-burry-john-paulson-f... "Michael Burry, one of the first to predict the subprime crisis and bet against it, is now betting on a weak recovery by investing in gold and farmland, two hedges against inflation."
Howso? We're back in a more historically normal interest rate environment. The last 12 years of zero-interest rates were the "uncharted" territory IMO.
Seems a bit credible.
Why are these people so interesting to bloggers/journalists?
i.e. For all the times they called an event 65%, it happened about 65% of the time.
So they weren't "wrong" the other 35% of the time, it's just those are the times the 35% chance bore out.
People have a habit of assuming "is likely" is the same as "guaranteed". Or that that's what the caller believe will happen. And then using the event once passed to discredit the initial analysis.
Reporter wants to say something about 'I bet WFH will have negative impacts on white collar workers."
Their options are:
1) Do data-driven research and come up with a dry, sort-of-compelling article about recent data releases that doesn't get traction
2) Use a 'famous for being right in a big way' celebrity to 'launder' their idea.
He predicted the market would crash this year, and liquidated most of his portfolio in the first half of the year to get out of harm's way. Most of the rest of us are now nursing massive losses.
https://markets.businessinsider.com/news/stocks/big-short-mi...
I also liquidated most of my stock positions based on that data and I'm not in finance.
Just a guess though of course.
https://www.livewiremarkets.com/wires/grantham-this-is-a-bub...
I don’t see talked about as much these days, curious what the sentiment is on him now?
(I really enjoyed his books)
Pop culture knows the movie 'Big Short', but they probably have never heard of a Nobel prized economist.
I think paul krugman is an pop culture figure too.
Also interesting use of the word bubble considering it involves an unprecedented change in how our economy has functioned for the past 3/4 of a century.
"The car dependent American suburb bubble is bursting"
These things happen two ways, gradually then suddenly. It is coming, but there is no need for sudden panic.
Ultimately, he may very well be right but I don't put much more weight into his opinion than any other prognosticator. I feel like the subprime bubble was uniquely suited to his expertise, but stuff like this requires both a deeper understanding of jobs and technology than he has, and is less of an inevitability.
White-collar jobs will boom, but they'll be outsourced. Work from home changes nothing about labor needs only labor location. If anything, work-from-home is a net productivity negative for large, bureaucratic organizations because slacking becomes even easier.
[0] https://www.reddit.com/r/wallstreetbets/comments/oawsxf/i_an...
As a good dev looking for a job, I can tell you with 95% certainty that the good devs are not applying to your job because your company is a boring knockoff doing boring things and your job sounds like a boring dead-end where developers will be cordoned off into a little box with nary enough room to turn around while they implement mandates handed down from above by a product owner who never uses the actual product with no opportunity for actually discussing whether this new silly feature will make the product worse or not (it will) while technical debt and cruft accumulates and any attempt to invest in the long-term health of your product will result in a reprimand.
After months of looking at job postings, hiring managers complaining about not finding good devs just sounds like incels complaining about not being able to date hot women. Look inward. Lots of good devs are out there looking. They're just not looking at you.
There is always a reason the devs are not coming and most of the time it has something to do with work / life balance, benefits or salary or any of the above.
I dont know you, you could be the coolest boss on earth but if something is wrong with the above points then you wont find what you are looking for.
I have noticed that too many times employers want literal gods to come in and fix their entire tech stack, their product, and by extension their company.
Of course, they are frequently only paying average salaries.
"there is a massive shortage of blue collar jobs like truck drivers, hospitality and restaurant employees, and other employees necessary for actually creating and delivering the goods and services that consumers want and need on a daily basis."
This recession is more about everyone else down to line cooks in restaurants being able to negotiate for higher salaries.
I wouldn't really call it a "bubble" though more sort of "overdue wage adjustment" but the Fed is moving to crush it.
I am never again giving up WFH.
What he means exactly is still not known.
Gen Z are much smaller than Boomers. This is a structural issue that can be fixed only via immigration.
What could have been automated probably was automated.
Also, due to china failures, there is going to be boom of insourcing not outsourcing.
For many too, they held on because their job was fun. My neighbor was a shipping container captain… he was eligible for retirement for many years. What finally made him retire was all the rigamarole the pandemic introduced. It stopped being fun.
The same thing happened with a local family-owned Agricultural store near me that’s been around for 70-odd years. Dealing with everything in the past 2 years sucked all the joy out of running the store, so they decided to retire.
Isn't that their entire schtick? The New Zealand of generations.
The words meaning sure hadn't changed, but I imagine the longer its mainstream the more it will morph. Soon we won't be allowed to say it at all, lest we offend somebody with the slur.
this seems likely the cause (compounded by the pandemic - people shifting industries, online ordering skyrocketing), unfortunately we still have another 10 years of baby boomers.
https://seekingalpha.com/article/4537751-the-big-short-micha...
The last sentence of the tweet is a dead giveaway of the archaic thinking. Why is WFH going to be blamed again? It feels like it's yet another manager's plea for employees to come back to the office and get micromanaged.
The article tries to answer my question:
> Work from home. The work from home trend is threatening office jobs because it reduces the need for many traditional office roles like secretaries and receptionists.
In what world are secretaries and receptionists a prevalent job title in the first place? Is the author of this article retired or something? The first wave of computing already shifted those roles. Executive assistants to the SLT are not just answering phones and twiddling thumbs. On top of that, in the modern world receptionists are one of the most minimally staffed parts of a company already. My last 1,000 employee in-person company had no more than two or three receptionists and they were contracted out to a vendor.
You know what is expanding post-pandemic? Co-working spaces. [1] Technology and the pandemic aren't eliminating offices, they're changing them. Many employees want a separate space to work, or a place to collaborate in person, but they don't want to be forced to go in daily. Companies don't want to have to make long-term lease commitments and dedicate one seat per employee.
Guess who has receptionists? Coworking spaces. But again they aren't sitting there twiddling their thumbs. WeWork and the rest of the modern coworking spaces are highly automated. You can't just ask the reception desk to fix something or make a change to your office, you have to put in a ticket. These receptionists wear many hats: they're salespeople, they set up events, they communicate with tenants, they do light cleaning. Their tasks are too varied to be replaced by an automation, and their salaries aren't that expensive.
> In contrast, the increasingly widespread adoption of enterprise software, data analytics, and machine learnings are increasingly rendering office jobs moot as much of the traditional number crunching, document processing, and repetitive analysis performed by office professionals is now being performed by software.
Automation is driving new business ventures for precisely the reasons the article brings up. Thousands of businesses exist today that couldn't possibly exist because computing wasn't powerful enough. As soon as you automate an enterprise task it opens up more opportunity to provide more complex business products and invite new ventures into the mix making products that didn't exist in the past.
Being able to do more things with less money is basically always a net positive.
> Furthermore, while restaurant, retail, and even factory workers are all expected to be ultimately replaced by robots that tech companies like Tesla (TSLA) are producing, this technology is even further away from being widely deployed, with some predicting these machines to not be meaningfully impactful until the end of this decade.
Not 100% related to my argument, but this quote above is one of the dumbest things this article claims. Anyone who thinks that retail and hospitality workers are going to straight up be replaced by robots is delusional, especially with the timeframe of "the end of this decade."
It costs something like $20/hour to hire a line cook, less in low cost of living areas. Certainly, the future of hospitality has fewer workers per customer, but that's just normal labor optimization. There won't be a fully automated McDonald's, but McDonald's employees work with a lot of automated devices. The dexterity and intelligence of a human is very difficult to replace entirely. Robots aren't going to be talking to customers at the Apple Store, the whole reason people are there is to talk to a person, and retail salaries are already quite low.
And why is Tesla in this discussion? Tesla doesn't produce factory automation robots. They purchase plain jane factory robotics that have been part of the auto industry for decades. It's like the article just wanted to bring up Tesla for no reason.
> As a third strike against the safety of white collar jobs at the moment, most companies have already more than fully recovered their number of white collar jobs from before the COVID-19 outbreak.
The article from this point on is basically talking about the normal boom/bust cycle of business, even though the beginning of the article and Burry's tweet are talking about permanent decline.
I'd say that this part of the article unintentionally makes the opposite argument it's trying to make. It is directly stating that blue collar job demand is worse, and white collar jobs recovered almost immediately.
What is the actual structural reason why companies won't hire more white collar workers? You can't just spew out "automation" because the past 20 years or so has shown us the opposite trend in relation to automation. White collar workers are the foundation of automation companies.
[1]https://www.nytimes.com/2022/05/17/technology/coworking-spac...
https://www.theverge.com/2022/9/30/23374729/tesla-bot-ai-day...
But it seems to be very far behind its competition.
Also, for evidence on what I was talking about with McDonald’s, just jump on YouTube and search “McDonald’s POV,” good luck automating all that and beating the human and simple specialized tools on performance.
