Great Depression

Bear Market, Financial Crisis, Fundamental Analysis, Recession Tough economic and market conditions provide operational and financial adversity for most companies. Reductions in cash flow pose significant risks to companies’ financial success. And, because the duration of a recession or adverse market conditions are difficult to predict, there is a risk that prolonged stagnation will cause an entity to go right out of business. However, some businesses don’t feel the same pinch.

This makes them good defensive stocks during bad market conditions. Tutorial: Stock-Picking Strategies How Recessions Hurt Tough economic times turn risk into operational and financial duress. A company may be forced to reduce expenses, lay off nonessential employees and minimize purchases, acquisitions and capital expenditures. A business typically has obligations it can’t eliminate, such as payroll, rent, leases, taxes and capital expenditures; these must be met with limited cash availability. (If you’re interested, take a look at our article A Review of Past Recessions for a historical refresher. A recession hits the pocketbooks of a business’s customers too, whose reduced spending impacts the company in turn. As customers reduce their spending, the number of product orders decreases; customers may not pay their bills, thus reducing the working capital of the companies they owe and leaving the business with write-downs. Contractors are often hit hardest. Their services focus on new projects – perhaps installing building equipment, working on new construction sites, or roofing and tiling work.

In tough market conditions, their customers will also cut down on expenses and reduce service orders as part of a broader effort to conserve cash. Favored Investment Industries Risk is a critical variable for investors when deciding where to park their money. Companies that have a business model insulated from economic downturns are viewed as attractive and safe investment opportunities. A cash cow can continue to produce cash flow streams despite lagging economic activity. (Read Spotting Cash Cows to learn how to identify these companies. )

There can be several reasons why a company fares well during a recessionary period: 1. The company provides critical repair and maintenance services, or sells essentials. Companies that provide nonessential services are typically the first to receive tough operational and financial blows from a recession. Consumers can choose to cut their own grass or paint their own houses, putting the residential contractor in tough financial times. Certain service companies, however, provide essential and critical services to their customers that cannot be so easily reduced or eliminated.

For instance, refineries and chemical plants hire engineering firms and consultants to conduct periodic assessments of their equipment, wirings and processes. These are ongoing reviews that cannot be eliminated simply to save a few dollars in expenditures. Another example is waste management. Neighborhoods and businesses certainly will not allow trash to pile up around their establishments, no matter how bad the economy gets. Similarly, companies that manufacture an important product that breaks down with a certain level of frequency and needs to be replaced tend to hold up well during tough times.

For instance, a maker of engine seals and gaskets will tend to have more stable revenue streams. Good seals and gaskets ensure that a car engine performs smoothly. These types of products also eventually break down. Thus, the product must be replaced to ensure an engine continues to work. How about a printer cartridge? When it runs out of ink, you are forced to order another one and replace the cartridge. That’s a classic case of a relatively insulated model. (For a related article on defensive stocks, check out Guard Your Portfolio With Defensive Stocks) 2. The company serves a customer base that is insulated from economic meltdown.

Nuclear and power generating facilities, for the most part, have stable revenue. So do companies that transport oil and energy commodities. There are limited or no substitute products or services in these business models; it will take more than a recession to force people to give up electricity! Some rail cars that carry and ship certain cargo can also be relatively insulated. For example, a rail company may have a long-term contract with the military to ship fuel, munitions and material to various destination points around the country. These types of companies are considered more stable in tough economies.

Companies that serve government contracts tend to continue to perform well, as these contracts are likely to continue through a recession, providing these companies with steady cash flows. 3. The company provides products or services that are mandated by government regulation or compliance rules. Security agencies and their personnel inspect the millions of tons of imported goods cargo entering the United States at various shipping ports and channels. These inspections are necessary in preventing drugs, smuggled weapons and other non-permitted goods from entering the country.

Such security precautions are mandated by government and local authorities and unless there is an unusual oversupply of qualified personnel who can perform these services, such businesses will continue to see business demand, despite a lagging economy. Another example is pipeline inspection. The United States has millions of miles of underground pipelines that carry oil and gas across the country. Ruptures and pipe damage can cause explosions that kill citizens. Thus, pipeline inspection is a required activity to help ensure such assets are in good condition.

Another required activity for public companies and most government agencies is the performance of an audit by an external agency. Auditing firms have a stable supply of work from these types of clients. 4. The company provides proprietary, niche or highly defensible products or services within the marketplace. A company may have an offering that is considered best-in-class in the industry. For example, a drilling equipment manufacturer may have patented pipes and related equipment that make it important for its drilling customers to use. It is possible that in hard economic times, its customers will elect to use these more reliable products nd reduce or eliminate orders from competitors. Pharmaceuticals and healthcare companies with drug patents are also classic examples of companies with relatively inelastic demand for their products. (For more insight, read Economics Basics: Elasticity. ) The Bottom Line Economic downturns pose financial problems for many companies, but there are companies that continue to generate revenue despite adverse market conditions. If a company serves an insulated market, provides critical repair and maintenance services or sells a consumable product, its business is unlikely to plummet, even in the worst market conditions.

Additionally, products or services mandated by the government offer good opportunities for stable business, as do companies that provide a proprietary or patented product or service. Even during recession, money continues to flow in an economy. There are profitable companies out there, but it is up to smart investors to find them. (For further reading, take a look at Industries That Thrive On Recession) NEW YORK (AP) — Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.

And the situation is even worse than it appears. Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries, and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers. They’re being obliterated by technology. Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done.

For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived. ___ EDITOR’S NOTE: First in a three-part series on the loss of middle-class jobs in the wake of the Great Recession, and the role of technology. ___ “The jobs that are going away aren’t coming back,” says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of “Race Against the Machine. ”I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years. ” The global economy is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they’re on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it.

Whole employment categories, from secretaries to travel agents, are starting to disappear. “There’s no sector of the economy that’s going to get a pass,” says Martin Ford, who runs a software company and wrote “The Lights in the Tunnel,” a book predicting widespread job losses. “It’s everywhere. ” The numbers startle even labor economists. In the United States, half the 7. 5 million jobs lost during the Great Recession were in industries that pay middle-class wages, ranging from $38,000 to $68,000. But only 2 percent of the 3. million jobs gained since the recession ended in June 2009 are in midpay industries. Nearly 70 percent are in low-pay industries, 29 percent in industries that pay well. In the 17 European countries that use the euro as their currency, the numbers are even worse. Almost 4. 3 million low-pay jobs have been gained since mid-2009, but the loss of midpay jobs has never stopped. A total of 7. 6 million disappeared from January 2008 through last June. Experts warn that this “hollowing out” of the middle-class workforce is far from over.

They predict the loss of millions more jobs as technology becomes even more sophisticated and reaches deeper into our lives. Maarten Goos, an economist at the University of Leuven in Belgium, says Europe could double its middle-class job losses. Some occupations are beneficiaries of the march of technology, such as software engineers and app designers for smartphones and tablet computers. Overall, though, technology is eliminating far more jobs than it is creating.

To understand the impact technology is having on middle-class jobs in developed countries, the AP analyzed employment data from 20 countries; tracked changes in hiring by industry, pay and task; compared job losses and gains during recessions and expansions over the past four decades; and interviewed economists, technology experts, robot manufacturers, software developers, entrepreneurs and people in the labor force who ranged from CEOs to the unemployed. The AP’s key findings: —For more than three decades, technology has reduced the number of jobs in manufacturing.

Robots and other machines controlled by computer programs work faster and make fewer mistakes than humans. Now, that same efficiency is being unleashed in the service economy, which employs more than two-thirds of the workforce in developed countries. Technology is eliminating jobs in office buildings, retail establishments and other businesses consumers deal with every day. —Technology is being adopted by every kind of organization that employs people. It’s replacing workers in large corporations and small businesses, established companies and start-ups.

It’s being used by schools, colleges and universities; hospitals and other medical facilities; nonprofit organizations and the military. —The most vulnerable workers are doing repetitive tasks that programmers can write software for — an accountant checking a list of numbers, an office manager filing forms, a paralegal reviewing documents for key words to help in a case. As software becomes even more sophisticated, victims are expected to include those who juggle tasks, such as supervisors and managers — workers who thought they were protected by a college degree. Thanks to technology, companies in the Standard & Poor’s 500 stock index reported one-third more profit the past year than they earned the year before the Great Recession. They’ve also expanded their businesses, but total employment, at 21. 1 million, has declined by a half-million. —Start-ups account for much of the job growth in developed economies, but software is allowing entrepreneurs to launch businesses with a third fewer employees than in the 1990s. There is less need for administrative support and back-office jobs that handle accounting, payroll and benefits. It’s becoming a self-serve world. Instead of relying on someone else in the workplace or our personal lives, we use technology to do tasks ourselves. Some find this frustrating; others like the feeling of control. Either way, this trend will only grow as software permeates our lives. —Technology is replacing workers in developed countries regardless of their politics, policies and laws. Union rules and labor laws may slow the dismissal of employees, but no country is attempting to prohibit organizations from using technology that allows them to operate more efficiently — and with fewer employees.

Some analysts reject the idea that technology has been a big job killer. They note that the collapse of the housing market in the U. S. , Ireland, Spain and other countries and the ensuing global recession wiped out millions of middle-class construction and factory jobs. In their view, governments could bring many of the jobs back if they would put aside worries about their heavy debts and spend more. Others note that jobs continue to be lost to China, India and other countries in the developing world. But to the extent technology has played a role, it raises the specter of high unemployment even after economic growth accelerates.

Some economists say millions of middle-class workers must be retrained to do other jobs if they hope to get work again. Others are more hopeful. They note that technological change over the centuries eventually has created more jobs than it destroyed, though the wait can be long and painful. A common refrain: The developed world may face years of high middle-class unemployment, social discord, divisive politics, falling living standards and dashed hopes. ___ In the U. S. , the economic recovery that started in June 2009 has been called the third straight “jobless recovery. But that’s a misnomer. The jobs came back after the first two. Most recessions since World War II were followed by a surge in new jobs as consumers started spending again and companies hired to meet the new demand. In the months after recessions ended in 1991 and 2001, there was no familiar snap-back, but all the jobs had returned in less than three years. But 42 months after the Great Recession ended, the U. S. has gained only 3. 5 million, or 47 percent, of the 7. 5 million jobs that were lost. The 17 countries that use the euro had 3. million fewer jobs last June than in December 2007. This has truly been a jobless recovery, and the lack of midpay jobs is almost entirely to blame. Fifty percent of the U. S. jobs lost were in midpay industries, but Moody’s Analytics, a research firm, says just 2 percent of the 3. 5 million jobs gained are in that category. After the four previous recessions, at least 30 percent of jobs created — and as many as 46 percent — were in midpay industries. Other studies that group jobs differently show a similar drop in middle-class work.

Some of the most startling studies have focused on midskill, midpay jobs that require tasks that follow well-defined procedures and are repeated throughout the day. Think travel agents, salespeople in stores, office assistants and back-office workers like benefits managers and payroll clerks, as well as machine operators and other factory jobs. An August 2012 paper by economists Henry Siu of the University of British Columbia and Nir Jaimovich of Duke University found these kinds of jobs comprise fewer than half of all jobs, yet accounted for nine of 10 of all losses in the Great Recession.

And they have kept disappearing in the economic recovery. Webb Wheel Products makes parts for truck brakes, which involves plenty of repetitive work. Its newest employee is the Doosan V550M, and it’s a marvel. It can spin a 130-pound brake drum like a child’s top, smooth its metal surface, then drill holes — all without missing a beat. And it doesn’t take vacations or “complain about anything,” says Dwayne Ricketts, president of the Cullman, Ala. , company. Thanks to computerized machines, Webb Wheel hasn’t added a factory worker in three years, though it’s making 300,000 more drums annually, a 25 percent increase. Everyone is waiting for the unemployment rate to drop, but I don’t know if it will much,” Ricketts says. “Companies in the recession learned to be more efficient, and they’re not going to go back. ” In Europe, companies couldn’t go back even if they wanted to. The 17 countries that use the euro slipped into another recession 14 months ago, in November 2011. The current unemployment rate is a record 11. 8 percent. European companies had been using technology to replace midpay workers for years, and now that has accelerated. The recessions have amplified the trend,” says Goos, the Belgian economist. “New jobs are being created, but not the middle-pay ones. ” In Canada, a 2011 study by economists at the University of British Columbia and York University in Toronto found a similar pattern of middle-class losses, though they were working with older data. In the 15 years through 2006, the share of total jobs held by many midpay, midskill occupations shrank. The share held by foremen fell 37 percent, workers in administrative and senior clerical roles fell 18 percent and those in sales and service fell 12 percent.

In Japan, a 2009 report from Hitotsubashi University in Tokyo documented a “substantial” drop in midpay, midskill jobs in the five years through 2005, and linked it to technology. Developing economies have been spared the technological onslaught — for now. Countries like Brazil and China are still growing middle-class jobs because they’re shifting from export-driven to consumer-based economies. But even they are beginning to use more machines in manufacturing. The cheap labor they relied on to make goods from apparel to electronics is no longer so cheap as their living standards rise.

One example is Sunbird Engineering, a Hong Kong firm that makes mirror frames for heavy trucks at a factory in southern China. Salaries at its plant in Dongguan have nearly tripled from $80 a month in 2005 to $225 today. “Automation is the obvious next step,” CEO Bill Pike says. Sunbird is installing robotic arms that drill screws into a mirror assembly, work now done by hand. The machinery will allow the company to eliminate two positions on a 13-person assembly line. Pike hopes that additional automation will allow the company to reduce another five or six jobs from the line. By automating, we can outlive the labor cost increases inevitable in China,” Pike says. “Those who automate in China will win the battle of increased costs. ” Foxconn Technology Group, which assembles iPhones at factories in China, unveiled plans in 2011 to install one million robots over three years. A recent headline in the China Daily newspaper: “Chinese robot wars set to erupt. ” ___ Candidates for U. S. president last year never tired of telling Americans how jobs were being shipped overseas. China, with its vast army of cheaper labor and low-value currency, was easy to blame.

But most jobs cut in the U. S. and Europe weren’t moved. No one got them. They vanished. And the villain in this story — a clever software engineer working in Silicon Valley or the high-tech hub around Heidelberg, Germany — isn’t so easy to hate. “It doesn’t have political appeal to say the reason we have a problem is we’re so successful in technology,” says Joseph Stiglitz, a Nobel Prize-winning economist at Columbia University. “There’s no enemy there. ” Unless you count family and friends and the person staring at you in the mirror.

The uncomfortable truth is technology is killing jobs with the help of ordinary consumers by enabling them to quickly do tasks that workers used to do full time, for salaries. Use a self-checkout lane at the supermarket or drugstore? A worker behind a cash register used to do that. Buy clothes without visiting a store? You’ve taken work from a salesman. Click “accept” in an email invitation to attend a meeting? You’ve pushed an office assistant closer to unemployment. Book your vacation using an online program? You’ve helped lay off a travel agent. Perhaps at American Express Co. which announced this month that it plans to cut 5,400 jobs, mainly in its travel business, as more of its customers shift to online portals to plan trips. Software is picking out worrisome blots in medical scans, running trains without conductors, driving cars without drivers, spotting profits in stocks trades in milliseconds, analyzing Twitter traffic to tell where to sell certain snacks, sifting through documents for evidence in court cases, recording power usage beamed from digital utility meters at millions of homes, and sorting returned library books.

Technology gives rise to “cheaper products and cool services,” says David Autor, an economist at MIT, one of the first to document tech’s role in cutting jobs. “But if you lose your job, that is slim compensation. ” Even the most commonplace technologies — take, say, email — are making it tough for workers to get jobs, including ones with MBAs, like Roshanne Redmond, a former project manager at a commercial real estate developer. “I used to get on the phone, talk to a secretary and coordinate calendars,” Redmond says. “Now, things are done by computer. ”

Technology is used by companies to run leaner and smarter in good times and bad, but never more than in bad. In a recession, sales fall and companies cut jobs to save money. Then they turn to technology to do tasks people used to do. And that’s when it hits them: They realize they don’t have to re-hire the humans when business improves, or at least not as many. The Hackett Group, a consultant on back-office jobs, estimates 2 million of them in finance, human resources, information technology and procurement have disappeared in the U. S. and Europe since the Great Recession.

It pins the blame for more than half of the losses on technology. These are jobs that used to fill cubicles at almost every company — clerks paying bills and ordering supplies, benefits managers filing health-care forms and IT experts helping with computer crashes. “The effect of (technology) on white-collar jobs is huge, but it’s not obvious,” says MIT’s McAfee. Companies “don’t put out a press release saying we’re not hiring again because of machines. ” ___ What hope is there for the future? Historically, new companies and new industries have been the incubator of new jobs.

Start-up companies no more than five years old are big sources of new jobs in developed economies. In the U. S. , they accounted for 99 percent of new private sector jobs in 2005, according to a study by the University of Maryland’s John Haltiwanger and two other economists. But even these companies are hiring fewer people. The average new business employed 4. 7 workers when it opened its doors in 2011, down from 7. 6 in the 1990s, according to a Labor Department study released last March. Technology is probably to blame, wrote the report’s authors, Eleanor Choi and

James Spletzer. Entrepreneurs no longer need people to do clerical and administrative tasks to help them get their businesses off the ground. In the old days — say, 10 years ago — “you’d need an assistant pretty early to coordinate everything — or you’d pay a huge opportunity cost for the entrepreneur or the president to set up a meeting,” says Jeff Connally, CEO of CMIT Solutions, a technology consultancy to small businesses. Now technology means “you can look at your calendar and everybody else’s calendar and — bing! — you’ve set up a meeting. So no assistant gets hired. Entrepreneur Andrew Schrage started the financial advice website Money Crashers in 2009 with a partner and one freelance writer. The bare-bones start-up was only possible, Schrage says, because of technology that allowed the company to get online help with accounting and payroll and other support functions without hiring staff. “Had I not had access to cloud computing and outsourcing, I estimate that I would have needed 5-10 employees to begin this venture,” Schrage says. “I doubt I would have been able to launch my business. ”

Technological innovations have been throwing people out of jobs for centuries. But they eventually created more work, and greater wealth, than they destroyed. Ford, the author and software engineer, thinks there is reason to believe that this time will be different. He sees virtually no end to the inroads of computers into the workplace. Eventually, he says, software will threaten the livelihoods of doctors, lawyers and other highly skilled professionals. Many economists are encouraged by history and think the gains eventually will outweigh the losses. But even they have doubts. What’s different this time is that digital technologies show up in every corner of the economy,” says McAfee, a self-described “digital optimist. ” ”Your tablet (computer) is just two or three years old, and it’s already taken over our lives. ” Peter Lindert, an economist at the University of California, Davis, says the computer is more destructive than innovations in the Industrial Revolution because the pace at which it is upending industries makes it hard for people to adapt. Occupations that provided middle-class lifestyles for generations can disappear in a few years.

Utility meter readers are just one example. As power companies began installing so-called smart readers outside homes, the number of meter readers in the U. S. plunged from 56,000 in 2001 to 36,000 in 2010, according to the Labor Department. In 10 years? That number is expected to be zero. ___ NEXT: Practically human: Can smart machines do your job? ___ AP researcher Judith Ausuebel contributed to this story from New York. Paul Wiseman reported from Washington. You can reach the writers on Twitter at www. twitter. com/BernardFCondon andwww. twitter. com/PaulWisemanAP.

Join in a Twitter chat about this story on Thursday, Jan. 24, at noon E. S. T. using the hashtag (hash)TheGreatReset. ___ Online: http://www. youtube. com/watch? v=s0WdCa-o3cI EDITOR’S NOTE: First in a three-part series on the loss of middle-class jobs in the wake of the Great Recession, and the role of technology. Information Technology Information technology is recession proof simply because demand for it is so high. Even if a few companies are looking to shrink their IT forces, others will be looking to hire IT professionals to fill gaps in their staff deployment.

Database administration, network administration and engineering and software engineering are all particularly good careers within the broader IT field. Middle-Class Jobs Cut in Recession Feared Gone for Good, Lost to Technology By Associated Press NEW YORK, Jan 25 2013 — Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over. And the situation is even worse than it appears.

Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries, and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers. They’re being obliterated by technology. Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done.

For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived. “The jobs that are going away aren’t coming back,” says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of “Race Against the Machine. ” ‘’I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years. ” The global economy is being reshaped by machines that generate and nalyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they’re on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories, from secretaries to travel agents, are starting to disappear. “There’s no sector of the economy that’s going to get a pass,” says Martin Ford, who runs a software company and wrote “The Lights in the Tunnel,” a book predicting widespread job losses. “It’s everywhere. The numbers startle even labor economists. In the United States, half the 7. 5 million jobs lost during the Great Recession were in industries that pay middle-class wages, ranging from $38,000 to $68,000. But only 2 percent of the 3. 5 million jobs gained since the recession ended in June 2009 are in midpay industries. Nearly 70 percent are in low-pay industries, 29 percent in industries that pay well. In the 17 European countries that use the euro as their currency, the numbers are even worse. Almost 4. 3 million low-pay jobs have been gained since mid-2009, but the loss of midpay jobs has never stopped. A total of 7. million disappeared from January 2008 through last June. Experts warn that this “hollowing out” of the middle-class workforce is far from over. They predict the loss of millions more jobs as technology becomes even more sophisticated and reaches deeper into our lives. Maarten Goos, an economist at the University of Leuven in Belgium, says Europe could double its middle-class job losses. Some occupations are beneficiaries of the march of technology, such as software engineers and app designers for smartphones and tablet computers. Overall, though, technology is eliminating far more jobs than it is creating.

To understand the impact technology is having on middle-class jobs in developed countries, the AP analyzed employment data from 20 countries; tracked changes in hiring by industry, pay and task; compared job losses and gains during recessions and expansions over the past four decades; and interviewed economists, technology experts, robot manufacturers, software developers, entrepreneurs and people in the labor force who ranged from CEOs to the unemployed. The AP’s key findings: —For more than three decades, technology has reduced the number of jobs in manufacturing. Robots and other machines controlled by computer programs ork faster and make fewer mistakes than humans. Now, that same efficiency is being unleashed in the service economy, which employs more than two-thirds of the workforce in developed countries. Technology is eliminating jobs in office buildings, retail establishments and other businesses consumers deal with every day. —Technology is being adopted by every kind of organization that employs people. It’s replacing workers in large corporations and small businesses, established companies and start-ups. It’s being used by schools, colleges and universities; hospitals and other medical facilities; nonprofit organizations and the military. The most vulnerable workers are doing repetitive tasks that programmers can write software for — an accountant checking a list of numbers, an office manager filing forms, a paralegal reviewing documents for key words to help in a case. As software becomes even more sophisticated, victims are expected to include those who juggle tasks, such as supervisors and managers — workers who thought they were protected by a college degree. —Thanks to technology, companies in the Standard & Poor’s 500 stock index reported one-third more profit the past year than they earned the year before the Great Recession.

They’ve also expanded their businesses, but total employment, at 21. 1 million, has declined by a half-million. —Start-ups account for much of the job growth in developed economies, but software is allowing entrepreneurs to launch businesses with a third fewer employees than in the 1990s. There is less need for administrative support and back-office jobs that handle accounting, payroll and benefits. —It’s becoming a self-serve world. Instead of relying on someone else in the workplace or our personal lives, we use technology to do tasks ourselves.

Some find this frustrating; others like the feeling of control. Either way, this trend will only grow as software permeates our lives. —Technology is replacing workers in developed countries regardless of their politics, policies and laws. Union rules and labor laws may slow the dismissal of employees, but no country is attempting to prohibit organizations from using technology that allows them to operate more efficiently — and with fewer employees. Some analysts reject the idea that technology has been a big job killer. They note that the collapse of the housing market in the U. S. Ireland, Spain and other countries and the ensuing global recession wiped out millions of middle-class construction and factory jobs. In their view, governments could bring many of the jobs back if they would put aside worries about their heavy debts and spend more. Others note that jobs continue to be lost to China, India and other countries in the developing world. But to the extent technology has played a role, it raises the specter of high unemployment even after economic growth accelerates. Some economists say millions of middle-class workers must be retrained to do other jobs if they hope to get work again. Others are more hopeful.

They note that technological change over the centuries eventually has created more jobs than it destroyed, though the wait can be long and painful. A common refrain: The developed world may face years of high middle-class unemployment, social discord, divisive politics, falling living standards and dashed hopes. In the U. S. , the economic recovery that started in June 2009 has been called the third straight “jobless recovery. ” But that’s a misnomer. The jobs came back after the first two. Most recessions since World War II were followed by a surge in new jobs as consumers started spending again and companies hired to meet the new demand.

In the months after recessions ended in 1991 and 2001, there was no familiar snap-back, but all the jobs had returned in less than three years. But 42 months after the Great Recession ended, the U. S. has gained only 3. 5 million, or 47 percent, of the 7. 5 million jobs that were lost. The 17 countries that use the euro had 3. 5 million fewer jobs last June than in December 2007. This has truly been a jobless recovery, and the lack of midpay jobs is almost entirely to blame. Fifty percent of the U. S. jobs lost were in midpay industries, but Moody’s Analytics, a research firm, says just 2 percent of the 3. million jobs gained are in that category. After the four previous recessions, at least 30 percent of jobs created — and as many as 46 percent — were in midpay industries. Other studies that group jobs differently show a similar drop in middle-class work. Some of the most startling studies have focused on midskill, midpay jobs that require tasks that follow well-defined procedures and are repeated throughout the day. Think travel agents, salespeople in stores, office assistants and back-office workers like benefits managers and payroll clerks, as well as machine operators and other factory jobs.

An August 2012 paper by economists Henry Siu of the University of British Columbia and Nir Jaimovich of Duke University found these kinds of jobs comprise fewer than half of all jobs, yet accounted for nine of 10 of all losses in the Great Recession. And they have kept disappearing in the economic recovery. Webb Wheel Products makes parts for truck brakes, which involves plenty of repetitive work. Its newest employee is the Doosan V550M, and it’s a marvel. It can spin a 130-pound brake drum like a child’s top, smooth its metal surface, then drill holes — all without missing a beat.

And it doesn’t take vacations or “complain about anything,” says Dwayne Ricketts, president of the Cullman, Ala. , company. Thanks to computerized machines, Webb Wheel hasn’t added a factory worker in three years, though it’s making 300,000 more drums annually, a 25 percent increase. “Everyone is waiting for the unemployment rate to drop, but I don’t know if it will much,” Ricketts says. “Companies in the recession learned to be more efficient, and they’re not going to go back. ” In Europe, companies couldn’t go back even if they wanted to. The 17 countries that use the euro slipped into another recession 14 months ago, in November 2011.

The current unemployment rate is a record 11. 8 percent. European companies had been using technology to replace midpay workers for years, and now that has accelerated. “The recessions have amplified the trend,” says Goos, the Belgian economist. “New jobs are being created, but not the middle-pay ones. ” In Canada, a 2011 study by economists at the University of British Columbia and York University in Toronto found a similar pattern of middle-class losses, though they were working with older data. In the 15 years through 2006, the share of total jobs held by many midpay, midskill occupations shrank.

The share held by foremen fell 37 percent, workers in administrative and senior clerical roles fell 18 percent and those in sales and service fell 12 percent. In Japan, a 2009 report from Hitotsubashi University in Tokyo documented a “substantial” drop in midpay, midskill jobs in the five years through 2005, and linked it to technology. Developing economies have been spared the technological onslaught — for now. Countries like Brazil and China are still growing middle-class jobs because they’re shifting from export-driven to consumer-based economies. But even they are beginning to use more machines in manufacturing.

The cheap labor they relied on to make goods from apparel to electronics is no longer so cheap as their living standards rise. One example is Sunbird Engineering, a Hong Kong firm that makes mirror frames for heavy trucks at a factory in southern China. Salaries at its plant in Dongguan have nearly tripled from $80 a month in 2005 to $225 today. “Automation is the obvious next step,” CEO Bill Pike says. Sunbird is installing robotic arms that drill screws into a mirror assembly, work now done by hand. The machinery will allow the company to eliminate two positions on a 13-person assembly line.

Pike hopes that additional automation will allow the company to reduce another five or six jobs from the line. “By automating, we can outlive the labor cost increases inevitable in China,” Pike says. “Those who automate in China will win the battle of increased costs. ” Foxconn Technology Group, which assembles iPhones at factories in China, unveiled plans in 2011 to install one million robots over three years. A recent headline in the China Daily newspaper: “Chinese robot wars set to erupt. ” ___ Candidates for U. S. president last year never tired of telling Americans how jobs were being shipped overseas.

China, with its vast army of cheaper labor and low-value currency, was easy to blame. But most jobs cut in the U. S. and Europe weren’t moved. No one got them. They vanished. And the villain in this story — a clever software engineer working in Silicon Valley or the high-tech hub around Heidelberg, Germany — isn’t so easy to hate. “It doesn’t have political appeal to say the reason we have a problem is we’re so successful in technology,” says Joseph Stiglitz, a Nobel Prize-winning economist at Columbia University. “There’s no enemy there. ” Unless you count family and friends and the person staring at you in the mirror.

The uncomfortable truth is technology is killing jobs with the help of ordinary consumers by enabling them to quickly do tasks that workers used to do full time, for salaries. Use a self-checkout lane at the supermarket or drugstore? A worker behind a cash register used to do that. Buy clothes without visiting a store? You’ve taken work from a salesman. Click “accept” in an email invitation to attend a meeting? You’ve pushed an office assistant closer to unemployment. Book your vacation using an online program? You’ve helped lay off a travel agent. Perhaps at American Express Co. which announced this month that it plans to cut 5,400 jobs, mainly in its travel business, as more of its customers shift to online portals to plan trips. Software is picking out worrisome blots in medical scans, running trains without conductors, driving cars without drivers, spotting profits in stocks trades in milliseconds, analyzing Twitter traffic to tell where to sell certain snacks, sifting through documents for evidence in court cases, recording power usage beamed from digital utility meters at millions of homes, and sorting returned library books.

Technology gives rise to “cheaper products and cool services,” says David Autor, an economist at MIT, one of the first to document tech’s role in cutting jobs. “But if you lose your job, that is slim compensation. ” Even the most commonplace technologies — take, say, email — are making it tough for workers to get jobs, including ones with MBAs, like Roshanne Redmond, a former project manager at a commercial real estate developer. “I used to get on the phone, talk to a secretary and coordinate calendars,” Redmond says. “Now, things are done by computer. Technology is used by companies to run leaner and smarter in good times and bad, but never more than in bad. In a recession, sales fall and companies cut jobs to save money. Then they turn to technology to do tasks people used to do. And that’s when it hits them: They realize they don’t have to re-hire the humans when business improves, or at least not as many. The Hackett Group, a consultant on back-office jobs, estimates 2 million of them in finance, human resources, information technology and procurement have disappeared in the U. S. and Europe since the Great Recession.

It pins the blame for more than half of the losses on technology. These are jobs that used to fill cubicles at almost every company — clerks paying bills and ordering supplies, benefits managers filing health-care forms and IT experts helping with computer crashes. “The effect of (technology) on white-collar jobs is huge, but it’s not obvious,” says MIT’s McAfee. Companies “don’t put out a press release saying we’re not hiring again because of machines. ” ___ [pic] What hope is there for the future? Historically, new companies and new industries have been the incubator of new jobs.

Start-up companies no more than five years old are big sources of new jobs in developed economies. In the U. S. , they accounted for 99 percent of new private sector jobs in 2005, according to a study by the University of Maryland’s John Haltiwanger and two other economists. But even these companies are hiring fewer people. The average new business employed 4. 7 workers when it opened its doors in 2011, down from 7. 6 in the 1990s, according to a Labor Department study released last March. Technology is probably to blame, wrote the report’s authors, Eleanor Choi and James Spletzer.

Entrepreneurs no longer need people to do clerical and administrative tasks to help them get their businesses off the ground. In the old days — say, 10 years ago — “you’d need an assistant pretty early to coordinate everything — or you’d pay a huge opportunity cost for the entrepreneur or the president to set up a meeting,” says Jeff Connally, CEO of CMIT Solutions, a technology consultancy to small businesses. Now technology means “you can look at your calendar and everybody else’s calendar and — bing! — you’ve set up a meeting. So no assistant gets hired. Entrepreneur Andrew Schrage started the financial advice website Money Crashers in 2009 with a partner and one freelance writer. The bare-bones start-up was only possible, Schrage says, because of technology that allowed the company to get online help with accounting and payroll and other support functions without hiring staff. “Had I not had access to cloud computing and outsourcing, I estimate that I would have needed 5-10 employees to begin this venture,” Schrage says. “I doubt I would have been able to launch my business. Technological innovations have been throwing people out of jobs for centuries. But they eventually created more work, and greater wealth, than they destroyed. Ford, the author and software engineer, thinks there is reason to believe that this time will be different. He sees virtually no end to the inroads of computers into the workplace. Eventually, he says, software will threaten the livelihoods of doctors, lawyers and other highly skilled professionals. Many economists are encouraged by history and think the gains eventually will outweigh the losses. But even they have doubts. What’s different this time is that digital technologies show up in every corner of the economy,” says McAfee, a self-described “digital optimist. ” ‘’Your tablet (computer) is just two or three years old, and it’s already taken over our lives. ” Peter Lindert, an economist at the University of California, Davis, says the computer is more destructive than innovations in the Industrial Revolution because the pace at which it is upending industries makes it hard for people to adapt. Occupations that provided middle-class lifestyles for generations can disappear in a few years.

Utility meter readers are just one example. As power companies began installing so-called smart readers outside homes, the number of meter readers in the U. S. plunged from 56,000 in 2001 to 36,000 in 2010, according to the Labor Department. In 10 years? That number is expected to be zero. ___ NEXT: Practically human: Can smart machines do your job? ___ AP researcher Judith Ausuebel contributed to this story from New York. Paul Wiseman reported from Washington. You can reach the writers on Twitter at www. twitter. com/BernardFCondon and www. twitter. com/PaulWisemanAP. ____________________ Part Two [pic]

Big Data and Cloud Computing Empower Smart Machines to Do Human Work, Take Human Jobs By Associated Press WASHINGTON,  — Art Liscano knows he’s an endangered species in the job market: He’s a meter reader in Fresno, Calif. For 26 years, he’s driven from house to house, checking how much electricity Pacific Gas & Electric customers have used. But PG&E doesn’t need many people like Liscano making rounds anymore. Every day, the utility replaces 1,200 old-fashioned meters with digital versions that can collect information without human help, generate more accurate power bills, even send an alert if the power goes out. I can see why technology is taking over,” says Liscano, 66, who earns $67,000 a year. “We can see the writing on the wall. ” His department employed 50 full-time meter readers just six years ago. Now, it has six. From giant corporations to university libraries to start-up businesses, employers are using rapidly improving technology to do tasks that humans used to do. That means millions of workers are caught in a competition they can’t win against machines that keep getting more powerful, cheaper and easier to use. ___

To better understand the impact of technology on jobs, The Associated Press analyzed employment data from 20 countries; and interviewed economists, technology experts, robot manufacturers, software developers, CEOs and workers who are competing with smarter machines. The AP found that almost all the jobs disappearing are in industries that pay middle-class wages, ranging from $38,000 to $68,000. Jobs that form the backbone of the middle class in developed countries in Europe, North America and Asia. In the United States, half of the 7. million jobs lost during the Great Recession paid middle-class wages, and the numbers are even more grim in the 17 European countries that use the euro as their currency. A total of 7. 6 million midpay jobs disappeared in those countries from January 2008 through last June. Those jobs are being replaced in many cases by machines and software that can do the same work better and cheaper. “Everything that humans can do a machine can do,” says Moshe Vardi, a computer scientist at Rice University in Houston. “Things are happening that look like science fiction. Google and Toyota are rolling out cars that can drive themselves. The Pentagon deploys robots to find roadside explosives in Afghanistan and wages war from the air with drone aircraft. North Carolina State University this month introduced a high-tech library where robots — “bookBots” — retrieve books when students request them, instead of humans. The library’s 1. 5 million books are no longer displayed on shelves; they’re kept in 18,000 metal bins that require one-ninth the space. The advance of technology is producing wondrous products and services that once were unthinkable.

But it’s also taking a toll on people because they so easily can be replaced. In the U. S. , more than 1. 1 million secretaries vanished from the job market between 2000 and 2010, their job security shattered by software that lets bosses field calls themselves and arrange their own meetings and trips. Over the same period, the number of telephone operators plunged by 64 percent, word processors and typists by 63 percent, travel agents by 46 percent and bookkeepers by 26 percent, according to Labor Department statistics. In Europe, technology is shaking up human resources departments across the continent. Nowadays, employees are expected to do a lot of what we used to think of as HR from behind their own computer,” says Ron van Baden, a negotiator with the Dutch labor union federation FNV. “It used to be that you could walk into the employee affairs office with a question about your pension, or the terms of your contract. That’s all gone and automated. ” Two-thirds of the 7. 6 million middle-class jobs that vanished in Europe were the victims of technology, estimates economist Maarten Goos at Belgium’s University of Leuven. Does technology also create jobs? Of course.

But at nowhere near the rate that it’s killing them off — at least for the foreseeable future. Here’s a look at three technological factors reshaping the economies and job markets in developed countries: BIG DATA At the heart of the biggest technological changes today is what computer scientists call “Big Data. ” Computers thrive on information, and they’re feasting on an unprecedented amount of it — from the Internet, from Twitter messages and other social media sources, from the barcodes and sensors being slapped on everything from boxes of Huggies diapers to stamping machines in car plants.

According to a Harvard Business Review article by Andrew McAfee and Erik Brynjolfsson of the Massachusetts Institute of Technology, more information now crosses the Internet every second than the entire Internet stored 20 years ago. Every hour, they note, Wal-Mart Stores Inc. collects 50 million filing cabinets’ worth of information from its dealings with customers. No human could make sense of so much data. But computers can.

They can sift through mountains of information and deliver valuable insights to decision-makers in businesses and government agencies. For instance, Wal-Mart’s analysis of Twitter traffic helped convince it to increase the amount of “Avengers” merchandise it offered when the superhero movie came out last year and to introduce a private-label corn chip in the American Southwest. Google’s automated car can only drive by itself by tapping into Google’s vast collection of maps and using information pouring in from special sensors to negotiate traffic. What’s different to me is the raw amount of data out there because of the Web, because of these devices, because we’re attaching sensors to things,” says McAfee, principal research scientist at MIT’s Center for Digital Business and the co-author of “Race Against the Machine. ” “The fuel of science is data,” he says. “We have so much more of that rocket fuel. ” So far, public attention has focused on the potential threats to privacy as companies use technology to gather clues about their customers’ buying habits and lifestyles. What is less visible,” says software entrepreneur Martin Ford, “is that organizations are collecting huge amounts of data about their internal operations and about what their employees are doing. ” The computers can use that information to “figure out how to do a great many jobs” that humans do now. Gary Mintchell, editor in chief of Automation World, recalls starting work in manufacturing years ago as a “grunge, white-collar worker. ” He’d walk around the factory floor with a clipboard, recording information from machines, then go back to an office and enter the data by hand onto a spreadsheet.

Now that grunge work is conducted by powerful “operations management” software systems developed by businesses such as General Electric Intelligent Platforms in Charlottesville, Va. These systems continuously collect, analyze and summarize in digestible form information about all aspects of factory operations —energy consumption, labor costs, quality problems, customer orders. And the guys wandering the factory floor with clipboards? They’re gone. THE CLOUD In the old days — say, five years ago — businesses that had to track lots of information needed to install servers in their offices and hire technical staff to run them. Cloud computing” has changed everything. Now, companies can store information on the Internet — perhaps through Amazon Web Services or Google App Engine — and grab it when they need it. And they don’t need to hire experts to do it. Cloud computing “is a catch-all term for the ability to rent as much computer power as you need without having to buy it, without having to know a lot about it,” McAfee says. “It really has opened up very high-powered computing to the masses. ” Small businesses, which have no budget for a big technology department, are especially eager to take advantage of the cheap computer power offered in the cloud.

Hilliard’s Beer in Seattle, founded in October 2011, bought software from the German company SAP that allows it to use cloud computing to track sales and inventory and to produce the reports that federal regulators require. “It automates a lot of the stuff that we do,” owner Ryan Hilliard says. “I know what it takes to run a server. I didn’t want to hire an IT guy. ” And the brewery keeps finding new ways to use the beefed-up computing power. For example, it’s now tracking what happens to the kegs it delivers to restaurants and retrieving them sooner for reuse. “Kegs are a pretty big expense for a small brewery,” Hilliard says.

Automated Insights in Durham, N. C. , draws on the computing power of the cloud to produce automated sports stories, such as customized weekly summaries for fantasy football leagues. “We’re able to create over 1,000 pieces of content per second at a very cost-effective rate,” says founder Robbie Allen. He says his startup would not have been possible without cloud computing. SMARTER MACHINES Though many are still working out the kinks, software is making machines and devices smarter every year. They can learn your habits, recognize your voice, do the things that travel agents, secretaries and interpreters have traditionally done.

Microsoft has unveiled a system that can translate what you say into Mandarin and play it back — in your voice. The Google Now personal assistant can tell you if there’s a traffic jam on your regular route home and suggest an alternative. Talk to Apple’s Siri and she can reschedule an appointment. IBM’s Watson supercomputer can field an awkwardly worded question, figure out what you’re trying to ask, retrieve the answer and spit it out fast enough to beat human champions on the TV quiz show “Jeopardy! ” Computers with that much brainpower increasingly will invade traditional office work.

Besides becoming more powerful and creative, machines and their software are becoming easier to use. That has made consumers increasingly comfortable relying on them to transact business. As well as eliminated jobs of bank tellers, ticket agents and checkout cashiers. People who used to say “Let me talk to a person. I don’t want to deal with this machine” are now using check-in kiosks at airports and self-checkout lanes at supermarkets and drugstores, says Jeff Connally, CEO of CMIT Solutions, a technology consultancy. The most important change in technology, he says, is “the profound simplification of the user interface. Four years ago, the Darien, Conn. , public library bought self-service check-out machines from 3M Co. Now, with customers scanning books themselves, the library is processing more books than ever while shaving 15 percent from staff hours by using fewer part-time workers. So machines are getting smarter and people are more comfortable using them. Those factors, combined with the financial pressures of the Great Recession, have led companies and government agencies to cut jobs the past five years, yet continue to operate just as well. How is that happening? Reduced aid from Indiana’s state government and other budget problems forced the Gary, Ind. , public school system last year to cut its annual transportation budget in half, to $5 million. The school district responded by using sophisticated software to draw up new, more efficient bus routes. And it cut 80 of 160 drivers. When the Great Recession struck, the Seattle police department didn’t have money to replace retiring officers. So it turned to technology — a new software system that lets police officers file crime-scene reports from laptops in their patrol cars.

The software was nothing fancy, just a collection of forms and pull-down menus, but the impact was huge. The shift from paper eliminated the need for two dozen transcribers and filing staff at police headquarters, and freed desk-bound officers to return to the streets. “A sergeant used to read them, sign them, an officer would photocopy them and another drive them to headquarters,” says Dick Reed, an assistant chief overseeing technology. “Think of the time, think of the salary. You’re paying an officer to make photocopies. ” Thanks to the software, the department has been able to maintain the number of cops on the street at 600.

The software, from Versaterm, a Canadian company, is being used by police in dozens of cities, including Denver, Portland, Ore. , and Austin, Texas. —In South Korea, Standard Chartered is expanding “smart banking” branches that employ a staff of three, compared with an average of about eight in traditional branches. The bank has closed a dozen full-service branches, replacing them with the smart branches, and expects to have 30 more by the end of this year. Customers do most of their banking on computer screens, and can connect with Standard Chartered specialists elsewhere by video-conference if they need help.

Comerica, a bank based in Dallas, is using new video-conferencing equipment that lets cash-management experts make pitches to potential corporate clients from their desks. Those experts, based in Livonia, Mich. , used to board planes and visit prospects in person. Now, they get Comerica colleagues in various cities to pay visits to local companies and conference them in. “The technology for delivering (high quality) video over a public Internet connection was unavailable 12 or 18 months ago,” says Paul Obermeyer, Comerica’s chief information officer. Now, we’re able to generate more revenue with the same employee base. ” The networking equipment also allows video to be delivered to smart phones, so the experts can make pitches on the run, too. —The British-Australian mining giant Rio Tinto announced plans last year to invest $518 million in the world’s first long-haul, heavy-duty driverless train system at its Pilbara iron ore mines in Western Australia. The automated trains are expected to start running next year. The trains are part of what Rio Tinto calls its “Mine of the Future” program, which includes 150 driverless trucks and automated drills.

Like many technologically savvy startups, Dirk Vander Kooij’s furniture-making company in the Netherlands needs only a skeleton crew — four people. The hard work at the Eindhoven-based company is carried out by an old industrial robot that Vander Kooij fashioned into a 3D printer. Using plastic recycled from old refrigerators, the machine “prints” furniture — ranging in price from a $300 chair to a $3,000 lamp — the way an ordinary printer uses ink to print documents. Many analysts expect 3D printing to revolutionize manufacturing, allowing small firms like Vander Kooij’s to make niche products without hiring many people. Google’s driverless car and the Pentagon’s drone aircraft are raising the specter of highways and skies filled with cars and planes that can get around by themselves. “A pilotless airliner is going to come; it’s just a question of when,” James Albaugh, retired CEO of Boeing Commercial Airlines, said in 2011, according to IEEE Spectrum magazine. “You’ll see it in freighters first, over water probably, landing very close to the shore. ” Unmanned trains already have arrived. The United Arab Emirates introduced the world’s longest automated rail system — 32 miles — in Dubai in 2009.

And the trains on several Japanese rail lines run by themselves. Tokyo’s Yurikamome Line, which skirts Tokyo Bay, is completely automated. The line — named for the black-headed sea gull that is Tokyo’s official bird — employs only about 60 employees at its 16 stations. “Certainly, using the automated systems does reduce the number of staff we need,” says Katsuya Hagane, the manager in charge of operations at New Transit Yurikamome. Driverless cars will have a revolutionary impact on traffic one day — and the job market. In the United States alone, 3. million people drive trucks for a living, 573,000 drive buses, 342,000 drive taxis or limousines. All those jobs will be threatened by automated vehicles. —Phone companies and gas and electric utilities are using technology to reduce their payrolls. Since 2007, for instance, telecommunications giant Verizon has increased its annual revenue 19 percent — while employing 17 percent fewer workers. The smaller work force partly reflects the shift toward cellphones and away from landlines, which require considerably more maintenance.

But even the landlines need less human attention because Verizon is rapidly replacing old-fashioned copper lines with lower-maintenance, fiber-optic cables. Verizon also makes it easier for customers to deal with problems themselves without calling a repairman. From their homes, consumers can open Verizon’s In-home Agent software on their computers. The system can determine why a cable TV box isn’t working or why the Internet connection is down — and fix the problem in minutes. The program has been downloaded more than 2 million times, Verizon says. And then there are the meter readers like PG&E’s Liscano.

Their future looks grim. Southern California Edison finished its digital meter installation program late last year. All but 20,000 of its 5. 3 million customers have their power usage beamed directly to the utility. Nearly all of the 972 meter readers in Southern California Edison’s territory accepted retirement packages or were transferred within the company, says Pat Lavin of the International Brotherhood of Electrical Workers. But 92 workers are being laid off this month. “Trying to keep it from happening would have been like the Teamsters in the early 1900s trying to stop the combustion engine,” Lavin says. You can’t stand in the way of technology. ” ___ NEXT: Will smart machines create a world without work? ___ An AP interactive that accompanies the Great Reset series explores job growth in recent economic recoveries and includes an in-depth video analysis: —http://bigstory. ap. org/interactive/interactive-great-reset/ ___ Bernard Condon and Jonathan Fahey reported from New York. AP Business Writers Christopher S. Rugaber in Washington, Youkyung Lee in Seoul, Toby Sterling in Amsterdam and Elaine Kurtenbach in Tokyo contributed to this report.

You can reach the writers on Twitter at www. twitter. com/BernardFCondon and www. twitter. com/PaulWisemanAP. Join in a Twitter chat about this story on Thursday, Jan. 24, at noon ET using the hashtag (hash)TheGreatReset. _______________ Part Three [pic] A World Without Work: As Robots, Computers Get Smarter, Will Humans Have Anything Left to Do? By Associated Press WASHINGTON — They seem right out of a Hollywood fantasy, and they are: Cars that drive themselves have appeared in movies like “I, Robot” and the television show “Knight Rider. Now, three years after Google invented one, automated cars could be on their way to a freeway near you. In the U. S. , California and other states are rewriting the rules of the road to make way for driverless cars. Just one problem: What happens to the millions of people who make a living driving cars and trucks — jobs that always have seemed sheltered from the onslaught of technology? “All those jobs are going to disappear in the next 25 years,” predicts Moshe Vardi, a computer scientist at Rice University in Houston. “Driving by people will look quaint; it will look like a horse and buggy. If automation can unseat bus drivers, urban deliverymen, long-haul truckers, even cabbies, is any job safe? Vardi poses an equally scary question: “Are we prepared for an economy in which 50 percent of people aren’t working? ” ___ An Associated Press analysis of employment data from 20 countries found that millions of midskill, midpay jobs already have disappeared over the past five years, and they are the jobs that form the backbone of the middle class in developed countries. That experience has left a growing number of technologists and economists wondering what lies ahead.

Will middle-class jobs return when the global economy recovers, or are they lost forever because of the advance of technology? The answer may not be known for years, perhaps decades. Experts argue among themselves whether the job market will recover, muddle along or get much worse. To understand their arguments, it helps to understand the past. Every time a transformative invention took hold over the past two centuries — whether the steamboat in the 1820s or the locomotive in the 1850s or the telegraph or the telephone — businesses would disappear and workers would lose jobs.

But new businesses would emerge that employed even more. The combustion engine decimated makers of horse-drawn carriages, saddles, buggy whips and other occupations that depended on the horse trade. But it also resulted in huge auto plants that employed hundreds of thousands of workers, who were paid enough to help create a prosperous middle class. “What has always been true is that technology has destroyed jobs but also always created jobs,” says Nobel Prize-winning economist Joseph Stiglitz of Columbia University. “You know the old story we tell about (how) the car destroyed blacksmiths and created the auto industry. The astounding capabilities of computer technology are forcing some mainstream economists to rethink the conventional wisdom about the economic benefits of technology, however. For the first time, we are seeing machines that can think — or something close to it. In the early 1980s, at the beginning of the personal computer age, economists thought computers would do what machines had done for two centuries — eliminate jobs that required brawn, not brains. Low-level workers would be forced to seek training to qualify for jobs that required more skills.

They’d become more productive and earn more money. The process would be the same as when mechanization replaced manual labor on the farm a century ago; workers moved to the city and got factory jobs that required higher skills but paid more. But it hasn’t quite worked out that way. It turns out that computers most easily target jobs that involve routines, whatever skill level they require. And the most vulnerable of these jobs, economists have found, tend to employ midskill workers, even those held by people with college degrees — the very jobs that support a middle-class, consumer economy.

So the rise of computer technology poses a threat that previous generations of machines didn’t: The old machines replaced human brawn but created jobs that required human brains. The new machines threaten both. “Technological change is more encompassing and moving faster and making it harder and harder to find things that people have a comparative advantage in” versus machines, says David Autor, an economist at the Massachusetts Institute of Technology who has studied the loss of midpay jobs to technology.

Here are the three scenarios that economists and technologists offer about jobs in the future: —THE ECONOMY RETURNS TO HEALTH AFTER A WRENCHING TRANSITION It has always happened before. Europe and the United States endured repeated economic and social upheaval during the 19th and early 20th centuries as their agricultural economies transformed into industrial ones. Columbia’s Stiglitz argues that such pressures led to the collapse of the world economy in 1929 — the cataclysm we call the Great Depression. The mechanization of farming caused agricultural production to soar worldwide in the 1920s — and prices to plunge.

In the U. S. , crop and livestock prices fell by 50 percent between 1929 and 1932. American farmers, who accounted for a fifth of the U. S. workforce, lost purchasing power and also struggled to pay their mortgages and other loans. As their debts went bad, banks began to collapse, squeezing credit and spreading panic. The economy went into free-fall. Only World War II — and the massive rearmament program it required — restored the U. S. economy to full health. The experience was traumatizing. And today only 2 percent of Americans work on farms. “Economies don’t make these transitions well,” Stiglitz says.

People in the dying parts of the economy can’t afford to invest in the education or retraining they need to find different work. “So you get workers trapped in the wrong sectors or unemployed,” he says. Peter Lindert, an economist at the University of California-Davis, says computers are more disruptive than earlier innovations because they are “general-purpose technologies” used by all kinds of companies. They upend many industries instead of just a few. The mechanized looms the Luddites hated in England in the early 1800s, for instance, rattled one industry.

Information technology touches every business. The changes are coming much faster this time, too. Lindert says that’s showing up in the steep drop in prices for some products this time. In the Industrial Revolution, “the price of textiles went down. But it was a small number compared to how the cost of information storage has gone down. It’s a fraction of what it was in the 1970s,” Lindert says. Now, computing power is doubling every 18 months to two years — and the price is plummeting. But Lindert does not believe workers are doomed to unemployment.

With the right skills and education, he says, they can learn to work with the machines and become productive enough to fend off the automation threat. “There is a period of time that is extremely disruptive,” says Thomas Schneider, CEO of the consultancy Restructuring Associates. “If you’re 55 years old now and lose your job, the odds of you ever getting hired into what you were doing before is as close to zero as you can imagine. If you are a 12-year-old, you have a very bright future. It’s just not doing what your father was doing or your mother was doing. The rise of the iPhone, for instance, has put more than 290,000 people to work on related iPhone apps since 2007, according to Apple. That suggests that new technology continues to create new types of jobs that require higher skills and creativity. “Over the long run, I have confidence we can do it,” Stiglitz says. But, he warns, “I can see us being in this kind of doldrums for half a decade, for a decade, or for longer. ” —THE ECONOMY CONTINUES TO PRODUCE JOBS, JUST NOT ENOUGH GOOD ONES Some economists worry that the sluggish, lopsided labor market of the past five years is what we’ll be stuck with in the future.

Smarter machines and niftier software will continue to replace more and more midpay jobs, making businesses more productive and swelling their profits. The most highly skilled workers — those who can use machines to be more productive but can’t be replaced by them — will continue to prosper. Many low-pay jobs are likely to remain sheltered from the technological offensive: Robots are too clumsy to tidy up hotel rooms or clear dirty dishes at busy restaurants. “Computers can do calculus better than any human being,” says Andrew McAfee, principal research scientist at MIT’s Center for Digital Business.

But “restaurant bus boy is a very safe job for a long time to come. ” Under this scenario, technology could continue to push economic growth — but only a few would enjoy the benefits. More people would be competing for midpay jobs, so pay would shrivel. Many midskill workers would be left unemployed or shunted into low-skill, low-pay jobs. The income gap between the rich and ordinary citizens, already at record levels in many developed countries, would continue to widen. Most economists say that unequal societies don’t prosper; it takes a large and confident middle class to produce the consumer spending that drives healthy economic growth. In the long run, you could actually see growth stopping,” says economist Maarten Goos at Belgium’s University of Leuven. “If everyone is employed in low-wage service jobs, then, that’s it. ” —TECHNOLOGY LEADS TO MASS UNEMPLOYMENT In a speech last year, former U. S. Treasury Secretary Lawrence Summers declared that the biggest economic issue of the future would not be the federal debt or competition from China but “the dramatic transformations that technology is bringing about. ” Summers imagined a machine called the “Doer” that could make anything or provide any service.

Productivity would soar. Wonderful goods and services would emerge. Enormous wealth would go “to those who could design better Doers, to those who could think of better things for Doers to do. ” But everyone else would be worthless in the labor market. Summers said the world is moving in that direction and has completed only 15 percent of the journey, but already we are “observing its consequences. ” Consequences, indeed. ATMs dislodged bank tellers. Microsoft Outlook manages what secretaries used to do. Expedia is replacing travel agents. E-ZPass is doing away with toll-booth operators.

And robots continue to supplant factory workers. But surely some jobs are safe. Truck drivers, perhaps? A machine can’t negotiate a left-hand turn against oncoming traffic without a human behind the wheel, can it? Or so economists Frank Levy of MIT and Richard Murnane of Harvard University reasoned in their book “The New Division of Labor,” way back in 2004. That was then. Six years later, Google developed a car that could drive itself, crossing the Golden Gate Bridge, circling Lake Tahoe and cruising down Hollywood Boulevard. The gee-whiz driverless car could soon claim victims in the job market. Twice a week, a truck comes near my house, and two guys get out and pick up the garbage,” says Vardi, the Rice computer scientist. “This will disappear. There will still be a truck coming, but it will be driven autonomously, and the garbage will be picked up autonomously, and those jobs will be gone. ” In the United States alone, 92,000 people are employed as sanitation workers, according to the Bureau of Labor Statistics. Add all other driving occupations, from long-haul truckers to taxi cab drivers, and the total exceeds 4 million. All those jobs may be in danger. And that’s the future: Other occupations already are disappearing.

Add up the jobs that technology can take across dozens of occupations and the result, Vardi and others warn, is unemployment on a scale we haven’t begun to imagine. “The vast majority of people do routine work. The human economy has always demanded routine work,” says software entrepreneur Martin Ford. He worries that machines will take all those routine jobs, leaving few opportunities for ordinary workers. In his book “The Lights in the Tunnel,” Ford foresees a computer-dominated economy with 75 percent unemployment before the end of this century; the vast majority of workers, he predicts, won’t be able to evelop the skills necessary to outrun job-killing computers and robots. “People talk about the future, creating new industries and new businesses,” Ford says. “But there’s every indication that these are not going to be in labor-intensive industries. … Right from the get-go, they’re going to be digital. ” Consider the great business successes of the Internet age: Apple employs 80,000 people worldwide; Google, 54,000; Facebook, 4,300. Combined, those three superstar companies employ less than a quarter of the 600,000 people General Motors had in the 1970s.

And today, GM employs just 202,000 people, while making more cars than ever. As far back as 1958, American union leader Walter Reuther recalled going through a Ford Motor plant that was already automated. A company manager goaded him: “Aren’t you worried about how you are going to collect union dues from all these machines? ” “The thought that occurred to me,” Reuther replied, “was how are you going to sell cars to these machines? ” Another Recession to hit India, IT world, hints Infosys Bangalore, Nov 22: Another Recession may hit India and its Information Technology (IT) sector soon.

The latest statement on the recession came when the executive co-chairman of IT-giant Infosys, S Gopalakrishnan hinted that another recession may leave a profound impact on Indian IT industry if economic crisis in US and in European countries continue. However, Gopalakrishnan claimed that the impact of the global economic crisis will not be as profound as it was in 2008. “There is some impact (of slowdown in Europe and US) but it is not as bad as it was in 2008. I hope it stays like this and does not become worse,” said the executive co-chairman of the IT giant.

Eying on higher growth of the company, Infosys, as Mr Gopalakrishnan said, is looking at investing in Intellectual Properties and product solutions to offer variety of technology solutions. Talking about the latent prosperity in the Indian IT industry, Mr Gopalakrishnan also claimed, “It is very much feasible that the size of IT industry could grow from $65 billion to $220 billion in next 8-10 years. There is still innovation in IT sector like cloud computing, mobile applications etc. ” Take steps to prevent recession: PM tells Europe, rich nations

Pretoria, Oct 18: Cautioning that the Eurozone crisis could affect the developing countries, Prime Minister Manmohan Singh today asked Europe and other advanced economies to take “effective and early steps” to prevent the global economy from slipping into a double-dip recession. He also said that India-Brazil-South Africa (IBSA), three leading emerging economies, were united in their efforts to address the deficit in global governance and pressed for enlargement of the UN Security Council to reflect the present day reality. The sovereign debt crisis in Europe and recessionary trends in the traditional engines of the global economy – the US, Europe and Japan – are sending negative signals to world financial and capital markets which are showing signs of distress,” Singh said addressing the plenary session of the IBSA Summit here. “Developing countries cannot remain untouched by the negative impacts of these developments. Their ability to address their developmental challenges has been adversely affected,” he said. We hope effective and early steps will be taken by Europe and other advanced economies to calm the capital and financial markets and prevent the global economy from slipping into a double-dip recession,” Singh added. With G-20 summit in the offing in Cannes early next month, Singh said IBSA countries should cooridnate their positions in the run-up to it to ensure that priorities of the developing economies are adequately reflected in the deliberations of the grouping. Read more at: http://news. oneindia. in/2011/10/18/take-steps-to-prevent-recession-pm-tells-europe-nations. tml Second recession could be more painful than the first New York, Aug 8: The Great Recession of 2007 that rocked the entire globe might have compelled many jobless to take up the drastic step of committing suicide. But, the recent warnings by the economists claim that if the economy falls back into recession now, exorcising of its demons could be a lot more painful than the last time. “It would be disastrous if we entered into a recession at this stage, given that we haven”t yet made up for the last recession,” said Conrad DeQuadros, senior economist at RDQ Economics.

In a quick response, US president Barack Obama said that the country”s “urgent mission” now was to expand the economy and create jobs. US Treasury Secretary Timothy F. Geithner said in an interview on CNBC on Sunday, Aug 7 that the United States had “a lot of work to do” because of its “long-term and unsustainable fiscal position”. In fact, the policy makers used most of the economic tools at their disposal to combat the last recession, and have few options available. During the last recession, the employers had shed all the extra work shifts and weak or extraneous employees that they could.

As shown by unusually strong productivity gains, companies are now squeezing as much work as they can from their newly “lean and mean” work forces. Should a recession return, it is not clear how many additional workers’ businesses could lay off and still manage to function. With fewer jobs and fewer hours logged, there is less income for households to spend, creating a huge obstacle for a consumer-driven economy. “There are only so many times the Fed can pull this same rabbit out of its hat,” said Torsten Slok, the chief international economist at Deutsche Bank. There is no approachable precedent, at least in the postwar era, for what happens when an economy with 9 percent unemployment falls back into recession,” said Nigel Gault, chief United States economist at IHS Global Insight. “The one precedent you might consider is 1937, when there was also a premature withdrawal of fiscal stimulus, and the economy fell into another recession more painful than the first. ” “In the financial crisis, when markets were freezing up, the first response was, ‘I”ve got to get some cash,” ” said Neal Soss, the chief economist at Credit Suisse. The fastest way to get cash is to not have a weekly payroll, so that”s why we saw such big layoffs. ” Read more at: http://news. oneindia. in/2011/08/08/second-recession-could-be-more-painful-than-the-first. html US may soon go into another recession: Ex-Obama advisor Washington, Aug 8: If Standard ; Poor’s downgrading of USA’s credit rating was bad news to many, then there is more in store as President Barack Obama’s former economic advisor believes that a new recession may just be lurking around the corner for American economy.

Lawrence Summers, the former economic advisor to US President Barack Obama, speaking with CNN in an interview said, “S&P’s track record has been terrible, and as we have seen this weekend, its a arithmetic is worse. So, there’s nothing good to say about what they’ve done. ” He added, “But that’s not the large issue here. The large issue here is that the House majority played chicken with America’s credit worthiness, and America’s families are going to be the losers, losers in terms of higher interest rates on their mortgages, losers in terms of what this is going to mean for employment, that we’ve got critical economic problems. Insisting that the US now needs to find a balanced approach to make its way out of the economic mess, Summers said, “The critical economic problem of slow growth and lack of jobs, the critical economic problem of a long-run budget situation that needs to be adjusted and needs to be adjusted in a rational way, and we have to find balanced approached going forward. Balanced approaches to focus on the jobs deficit. ” Despite all the gloom surrounding the debt situation in the US economy, Summers remains confident that the debts will be paid of.

He said, “Look S&P said to sell, Warren Buffett said to buy. That should tell you something about the quality of US bonds. ” And added, “At the same time, this happened because S&P was seeing what most Americans are feeling, which is unhappiness with the solutions that are coming out of congress for critical economic problems. ” It can be recalled that S ; P on Aug 5, for the first time downgraded the US credit rating from AAA to AA+. Read more at: http://news. oneindia. in/2011/08/08/usa-likely-to-face-another-recession-soon-ex-obama-aide. tml What are the Causes of recession in information technology? simply put, lack of foresight and economic maturity. technology has developed far faster than the buisness model surrounding it or the common users understanding of it, and so people lose sight of the fact that research requires a market backing it to progrss, so now new products simply arent being invested in because no one has even the faintest idea what the difference is, except the exceptional few who understand the growth curve.

When the economy starts showing an ominous downward spiral, companies begin to cut jobs, wages start to decrease, the expressions on most business analysts’ faces seem to oscillate from grave to somber, and then you know that an economic recession has finally hit home. However, when exactly the current spell or financial despair began enveloping corporations and businesses all over the world is still a debatable issue. A common definition dictates that recession begins when the gross domestic product (GDP) shows a negative growth for two successive quarters.

The National Bureau of Economic Research (NBER) estimated that the United States has been in recession since December 2007. Since 20% of the world’s economy is represented by the US, the world could be severely affected by the US economy’s downturn. Tim Bajarin, a leading analyst in the technology industry, in an article published by FOXNews. com in May 2008, observed that by the middle of 2008, when many industries had been affected by the financial crunch, the information technology (IT) industry seemed to be immune to its effects.

The technology sector was not just hopeful of survival during the economic downside, but even predicted that it would still need to use their mobile phones, Personal Digital Assistants (PDAs), laptops and other gadgets. They could cut back on other expenses, but it was assumed that the credit crunch would not affect spending habits on technology products. In the last quarter of 2008, the IT industry began to take the hit. By the end of September 2008, a 9. 1% dive by the National Association of Securities Dealers Automated Quotations (NASDAQ), resulted in big names such as Google, Apple and Amazon losing between 10% to 18% of their worth.

Immediately after that Yahoo! Shares hit a five-year low, Dell, a ten-year low, and Sun, a 13-year low. Some tech firms remained unaffected by the crunch because of the huge amount of cash they had, which prevented heavy borrowing on their part. The gaming industry showed an increase in sales in 2008, compared to the 2007 performance. Nintendo sold a record number of Wii consoles and DS handsets in December 2008. But earlier in 2009, it announced its first drop in profits in over five years. Apart from that, tech giants such as Google, Intel and Microsoft started laying off thousands of workers.

The recession was going to get a lot worse before the economic conditions stabilized – and the technology industry was not recession-proof. Conclusion In short, the global recession has had its impact but not as severely on the telecom industry as feared – certainly not as severe as to warrant massive layoffs. However, the global recession is not going to dispel anytime soon and how the IT/telecom industry performs in the long run, is something that everyone associated with the industries are cautiously watching. [pic] Quake, Tsunami hit Japan likely to face recession soon

New York, Mar 14: World’s third largest economy, Japan soon may experience a Recession as many economists feared as the country is experiencing simultaneous hazards from Friday, Mar 11. On Friday, the land of rising Sun, Japan was rocked by an earthquake of 8. 9 magnitude followed by a devastating tsunami, nuclear explosions and volcano eruptions. Nomura analysts Takahide Kiuchi and Okazaki Kohei wrote, “We now expect the Japanese economy to take longer than we expected to exit its current soft patch owing to the earthquake and tsunami. However, some analysts hoped to see regain in Japan’s economy during the end of Apr-June 2011 period. Though most of the experts claimed that the country’s development is troubling now. “It just increases uncertainty at a time when uncertainty is already high,” stated Ward McCarthy, chief economist at Jefferies in New York. The chief of economic research at Mitsubishi UFJ, Brendan Brown expressing fear of Japan’s worst economy on international market, claimed, “The primary effect on the world economy will be on big trade partners in Asia, including China and Korea. Previously, Japan had experienced recession after the country was hit by 1995 Kobe earthquake. At that time the industrial output fell but overall output remained strong, analysts said. On Monday, Mar 14, Japan reportedly experienced another earthquake of 5. 8 magnitude and fresh tsunami alerts have been issued in several parts of the country. Following the nuclear explosions in Fukushima nuclear power plant, more than 20,000 people were evacuated from the surroundings of the plant. 116 people were feared to have poisoned over radioactive rays.

The total death toll have crossed estimated 10,000. Though officially, it has been declared that more 2,000 are dead till Monday evening. China’s manufacturing to prevent next recession? Washington, Sep 2: China’s growth in manufacturing trade increased hopes that it will provide support to US exports and help sustain the US economic recovery to deal another recession. World’s second-largest economy, China has been growing at a robust pace in 2010. Two surveys of the Chinese economy released on Tuesday, Aug 31 proved that production, new orders and purchasing prices all lifted in Aug 2010.

Sizzling growth in China could help boost the struggling US economy, which expanded at a meager 1. 6 percent rate in the Apr-Jun quarter in 2010. However, according to the American manufacturers, US exports would be much higher if it were not for China’s refusal to allow its currency to rise in value against the dollar. The decision has made US exports more expensive in China, and Chinese imports cheaper in the US. An independent research firm’s official in China said, “China is really the global driver of growth right now. We need to realize that is the case. “

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