I think one big economic problem millennials face that is horribly under-discussed is that businesses just don’t really seem interesting in training people anymore, or at least not unless the person is in an unpaid/underpaid internship.
Like, in the ‘80s, my mom got a job as a programmer and was trained by the company. Prior to that, she had no experience with computers and hadn’t gone to college, and they trained her to program (granted, she wasn’t in a high level programming position, but even low-level programming jobs pay pretty well). Companies used to really invest in workers, and they don’t now. That’s unimaginable today. Companies now seem to expect you to get a four-year college degree that is directly applicable to the job, and at least a year or two of relevant internship experience, plus some self-learning on the side, to even hire for entry-level office work.
Of course, this new system makes younger workers much less competitive compared to older workers, and it means that any disadvantages you have (you have a mental illness, your parents aren’t supportive/wealthy enough to help you through an internship, you didn’t get a 4-year degree or got one at a lower-level institution,, etc.) multiply in how much they hinder one’s attempts to enter a given industry, because you have to do so much to even get your foot in the door.
Yeah, this is one of a large variety of ways in which the private sector, running out of ways to become more competitive by generating value, has increasingly depended on pushing costs onto others. Even fiscal conservatives tend to be fans of “skills training” subsidies, so it’s easy for companies to just completely give up on training and entry-level recruitment and then argue that the government needs to save them from the skills gap, and universities need to better train students in whatever they need right now. Then a huge amount of money gets wasted training people for things that are useless by the time those people enter the workforce, but were in-demand three years earlier.
In general I think it’s really important to understand this pattern of cost-smuggling, because it’s probably the single most fundamental tactic used by modern firms to stay competitive. You also see it in, for instance, the tendency to outsource resume screening to third-party service providers, who boast about their proprietary algorithm but actually just discard any resume without appropriate keyword hits and the right degrees. Or just-in-time scheduling, or the tendency to offsource all capital costs onto employees/contractors except the ones absolutely necessary to maintain leverage, or firing people when they’re costing you money and then rehiring them when you need them again. There are simply far, far more opportunities to save money by tricking or forcing other people into paying than there are by actually doing things better, and in a competitive marketplace, you can’t afford to hold out for the latter type.
What’s funny is that it’s not even clear that these strategies do improve long-term profitability. The issue is that long-term profitability doesn’t matter; companies have to optimize for short-term profitability, and things that make them money over a period of many years in ways that aren’t obvious to shareholders or investors aren’t worth that much in the rat race.
We may see an increase in relative performance by employee-owned and privately-owned companies for this reason.
This is discussed by finance people and while this factor is probably there, it’s already accounted for and some firms really do better by being publicly traded because you can get founders that are just not that great at leading even medium sized enterprises or just go bat shit crazy for what ever reason. And really, mega enterprises probably are too large to not be publicly traded.
This isn’t even accounting for the fact that just because an enterprise is not publicly traded it doesn’t mean there are not numerous owners with different incentives, and the tax incentive for debt financing and its interaction with corporate raiders.
Yeah, I feel like the optimal performance probably requires strong control by someone committed to the long-term prospects of a firm, but that model makes you extremely dependent on the quality of the people in charge, because it insulates you from pressures to fix actual problems as well as pressures to chase quarterly earnings.
While I’m not generally a fan of increasing financialization, as long as that’s the world we’re in right now I wonder if there’s a way to mitigate this framework using some kind of financial instrument better keyed to long-term sustainability. At least then you’d be getting information about what people think of a firm’s long-term prospects.
5-year stock that pays an additional 20 percantage points in value on dividends until it matures at year 5. The other dividend money 1-years don’t get goes into the pool and is re-divided to those with more mature stocks, which makes it a bit of a scheme, but unlike a pyramid it has a clear end and is a real company. When the stock is sold, the clock resets on those shares.