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Structural Unemployment

Distant Unicorn
From Wikipedia:

Structural unemployment is a form of unemployment resulting from a mismatch between the sufficiently skilled workers seeking employment and demand in the labour market. Even though the number of vacancies may be equal to the number of the unemployed, the unemployed workers may lack the skills needed for the jobs — or may not live in the part of the country or world where the jobs are available.


[i]Wellbeing of professionals at entry into the labour market: a follow up survey of medicine and architecture students-- P Virtanena, A-M Koivistob

Improved SOC in physicians but not in architects supports the hypothesis that good employment prospects are important to employee wellbeing. Although less consistent, indicating fluctuations in day to day psychological distress, GHQ findings are also in line with the hypothesis. In both professions the indicators studied were independent of individuals' graduation and career. It is concluded that rather than individually, the mechanisms that connect employment prospects with wellbeing operate collectively within the whole profession. Highly educated professionals do not complete their studies until almost 30, and if for reasons of insecure employment they are unable to develop their SOC to the optimum level at that age, their resources for resisting health endangering strain may remain permanently poor.


[i]PROFESSIONAL AND ORGANISATIONAL
BOUNDARIES: FACE-TO-FACE CONTACT
AND THE LIMITS OF ICT IN WORK -- Rachel Granger


At an operational level, such changes are leading to new work environments. The emergence of a high skilled, knowledge-driven economy - one broadly based on the mobilisation of information, knowledge, and skills to drive the accumulation of wealth – connotes changes structurally and spatially in the organisation of capitalism. Structurally, the knowledge-driven economy is indicative of the wider changes occurring in business from Fordism to Post-Fordism, and while the exact nature of Post-Fordism is still unknown, it is generally held that the next economic paradigm will induce new production practices based on flexibility (cf. the rigidities of Fordism), allowing greater competitiveness through quicker innovations and higher skills. Thus where Fordism embraced high division of labour, mechanisation, economies of scale, Post-Fordism denotes a shift towards less hierarchical division of labour, flexibility of work, and competitiveness based on creative working and economies of scope. As a result, more
flexible and responsive methods of working have started to emerge built on flatter hierarchies, the erosion of Taylorist working practices, autonomy, team working, and polyvalency especially in the service sector, creating a new era of high-skilled, high-paid service-based jobs.
 
Oct 15, 10 5:27 pm
Distant Unicorn

This thread, despite a formatting error or three, is to talk about structural unemployment within the AEC industry from an indifferent, detached perspective [read: unbiased].

While I am not immediately discouraging personal stories or anecdotes, I'd like to take a wider point of view of where structural unemployment versus real [frictional] unemployment actually exists.

If, for instance, we take the introduction of post-Fordism and combine it with a theory from The Brick and the Balloon: Architecture, Idealism and Land Speculation, Fredric Jameson... by all means, it makes it next to impossible for at least the AE part of the AEC industry to be functionally defunct. That is, to say, that the entire economy as a whole and cultural progression a la post-modernism relies specifically on the invention and profession of architects, planners and engineers.

I'm inviting you all to come up with real or specific instances where structural unemployment exists and what potential remedy there is to said instance.

Oct 15, 10 5:32 pm  · 
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Distant Unicorn

The second article points to the concept that despite wages, the impact of architecture is relatively the same as the impact of the medical profession on the human body.

That being said, it presents an idea that not having immediate entry into the profession is of actual physical harm-- i.e., the line of generally where governmental intervention comes into play.

Oct 15, 10 5:34 pm  · 
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not_here

My macroeconomics professor at Johns Hopkins (a hardcore liberal, which was odd) once stated that about 1% of unemployment in the US is caused by unions forcing wages past their real value.

We were in the middle of a republican administration (heavy pro-business), so I can only imagine that that 1% is now a much larger number.

Oct 15, 10 6:15 pm  · 
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dellafella

"Even though the number of vacancies may be equal to the number of the unemployed, the unemployed workers may lack the skills needed for the jobs — or may not live in the part of the country or world where the jobs are available."

I hate to say it, but structural unemployment is probably irrelevant at this point. In fact, we'd be lucky if structural unemployment was our only problem. Unfortunately, what we're seeing actually is "cyclical unemployment" (aka Keynesian unemployment or deficient-demand unemployment), which "occurs when there is not enough aggregate demand in the economy." I'm no economist, but simple logic would dictate that structural unemployment is merely one of the unfortunate and inevitable consequences of long-term cyclical unemployment, which is what we've been seeing for a couple of years now.

The question now is not whether peoples' skills are lacking or whether they are unable to relocate to where the jobs are (in China or Singapore, maybe?), it's whether they'll even be able to find a job as a Subway Sandwich Artist. Lest you think I'm joking, you can read yesterday's post:

http://www.archinect.com/forum/threads.php?id=101866_0_42_0_C

Structural unemployment can be fixed, at least somewhat, through education and relocation. Cyclical unemployment can really only be solved by, to put it bluntly, getting rid of large sectors of the workforce. We're talking natural disasters, wars, or whatever else might lead to sudden and drastic reduction of the population. Anything to bring the jobs-to-applicants ratio closer to 1:1.

That's why people say that the only thing that saved America from the Great Depression was WWII: we were the only country whose workforce and manufacturing capacity wasn't completely decimated, and therefore the post-war world needed our goods and services to rebuild. Back then, there was high demand for work in all sectors of the economy. Now, supply has far surpassed demand, particularly in the building industry. And with every foreclosed home or condo project that goes bottom-up, market supply increases.

Of course, this is just a long, drawn out way of saying We're Fucked.



Oct 15, 10 7:38 pm  · 
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StationeryMad

According to a few pundits on the left, structural unemployment is precisely the aim (or desired, and logical conclusion) through a long period of neoliberal regime in the US. The dismantling of large tracts of social infrastructures and institutions, which in turn facilitated the shift from public and social to private and self has merely left architects and the profession of architecture with an unpalatably narrow range of projects: malls, malls, and more malls; mcmansions, mcmansions and more mcmansions. Peppered within these two narrow bookends are supporting spaces such as offices and other generic stuff. Safe to say, this spectrum of projects also persist beyond the geographical boundaries of the US.

During this inadvertent shift towards projects of such natures, architects have been narrowing their focus towards only a few typologies while stretching these few typologies to death by the unrelenting egging from star-architects like Koolhaas--who in times of crisis ought to show the way but had only succumbed to the laurels of neoliberalism for architecture. Schools, which are extremely sensitive to playing catch-up for the building industry, only took more students and graduated most of them during the unprecedented boom years 2001-2007. Amid the collective and meteoric rise of the profession--'commercially')--no one really took stock on the 'unsustainable' nature and direction of the profession--namely building the entire basis of survival on consumption, which in turn was predicated on a economy largely tipped towards unlimited consumption over strategic production.

And so when this cyclical (though I would say 'catastrophic' here) downturn came along--a great period of sobering that has yet to be played out fully--architects discovered that they are no longer relevant. While we may continue to argue for the social relevance of architecture in schools and in AIA feel-good sessions, in reality architecture has become quite the opposite of this alter-ego: a field weaned on the production of wants and desires, and quite embarrassingly, has been even further developed to make a spatial and wallpaper fetish out of this troubling foundation.

Imagine that instead of the mall-ing of America and equally, the great speculative housing spree, there was also concurrent attention towards reworking aging infrastructures, new social building types, food farms and urban food distribution centers (and all its corollary network), and so on, architects today would still be fully employed with even greater potential to grow and do better as a profession. But what we have today is a diametrically opposite scenario where the profession has become severely anaemic after a large (and on-going) blood-letting: humans and talents and training wasted in a regime that finds them redundant and unproductive because fewer are buying and consumers' confidence is low.

Don't believe all kind of talk about the spontaneity of entrepreneurship and self-help for architects and other structurally unemployed or underemployed; in a cyclical and temporal downturn this kind of self-help may be of some good; but in a structural crisis like this with great uncertainty ahead, how can one provide for oneself when the problem is in fact global and permanent?

Is there a solution? Or at least a fix? I am unsure. Pundits from both sides are predicting a big shake-up in many industries--architecture and construction included--with many jobs permanently disappearing from the labor market. Is architecture one of them? Maybe, but certainly, if one's practice is positioned to satisfy certain niches that are now better served by professionals outside of the US. What we are seeing today is the first sign of an excess labor capacity that cannot be absorbed in any tried and tested way.

Oct 15, 10 9:45 pm  · 
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jmanganelli

two thoughts --- one obvious --- growth in most of the world except the U.S. and western europe has rebounded quickly and is quite robust as per below --- which may be worse for us, b/c we are not performing poorly in a decimated global economy, but rather are stalled while the world grows at a healthy clip --- this seems to add weight to the notion that this unemployment is structural --- there is demand, there is actually lots of demand, just not here --- http://www.chinadaily.com.cn/xinhua/2010-10-06/content_966531.html ---

the indicator of where we go may very well be how those who are now in middle school react to the lack of prospects --- do they buckle down and strive harder or do they say fuck it --- all of us 20-70 caught in it will just have to scratch and claw and get by b/c we prepared for a world that sort of doesn't exist any more

the second, and with respect to SOC, is the following: http://www.siop.org/TIP/backissues/TipApr01/08Coetzee.aspx

psychofortology, or, "I-O psychology has been concerned with stress and its effects on the workforce for many years (Selye, 1956; 1974). This focus on disease and the vulnerabilities of the individual, studied from a pathogenic paradigm, was gradually replaced by a new focus on the individuals psychological wellbeing and skills to cope with the demands of stress, studied from a health and growth psychology perspective."

SOC is a construct of psychofortology. and as far as that thread of this discussion goes, it is worth a look to do with as you will

the concept has been around but the research in this area does not seem as extensive as I expected when I looked into this area a few years ago --- a mentor said that the reason is b/c it is tougher to develop strong metrics for these sorts of studies, at least in comparison to measuring performance, which is a lucrative area of study

Oct 15, 10 9:59 pm  · 
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Distant Unicorn

I was looking more of specific examples of structural unemployment tied to some variety of actuality versus these long "diatribes" about "cycles."

Often, the concept of "cyclical unemployment" is grossly misused. It tends to be more related, in planning and economic development circles, to generational cycles.

In local economies, "cyclical unemployment" often coincides with school enrollments. This variety of generation cycling is structural as birth rates are relatively uncontrollable and often generational growth is dependent on a variety of factors mostly related to "real" or "physical" problems.

In the economics sense, "cyclical unemployment" generally refers to either seasonal employment or general business cycles. Both of which are considered frictional employment.



I was more or less looking for structural unemployment concepts more specific to the AEC industry:

-- Instances where a general software standard gets adopted and users are unable to learn or adapt to the software quickly.

-- Firms that work with materials or systems that end up necessitating using a contractor or engineering company such as Arup or Skanska. Arrangements such as this may cause redundancy or limit the amount of necessary skills.

-- Firms that work with specific contractors who are unable or unwilling to use specific materials, systems or structures.

-- A firm's general reluctance to evaluate, re-engineer or restructure day-to-day operations out of comfort or familiarity rather than profitability or *gasp* solvency

Oct 15, 10 10:37 pm  · 
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Distant Unicorn

And, technically, architecture as an industry is not going through a cyclical unemployment period. Despite current high unemployment, the AEC industry as a whole has shown to be growing at a pretty constant rate with an expected total growth rate of 27% til 2020.

So, over the next... the department of labor expects to the industry to add something like 320,000 jobs.

Of course, this isn't just architects but designers, planners, specialized office workers, surveyors, interior designers and so on.

Oct 15, 10 10:41 pm  · 
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jmanganelli

UG, do you believe the last bit of what you just posted

Oct 15, 10 11:10 pm  · 
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Distant Unicorn

The Department of Labor is hard to contend with... but yes.

Population growth is still happening, buildings age and fall down, new buildings have to be built and cultural institutions from freeways to opera houses still have practicality.

Will these things be built by 'traditional architecture practices?' Probably not.

But these figures are a lump sum of the AEC industry as a whole. For every registered Architect (capital 'A'), I would estimate there's between 10-14 practitioners of architecture (little 'a'). That's everything from the construction manager to the interior designer to the furniture designer to leasing agent to office administrators.

But, I firmly believe that there will continue to be a demand for architecture (little 'a') no matter who produces it. And I believe that's where things get murky in these reports is that they don't necessarily differentiate between different 'modes of practice.'

I generally divide these three modes down to these:

Traditional-- 'nuff said.
Modern-- Development firms, et cetera.
Neotraditional-- Traditional-styled modern firms (like SHoP, Fosters + Partners, OMA, that Pre-Fab Lady).

So, yes. I forsee jobs being added but not necessarily jobs being added by Last Name, Last Name, Last Names And People Not Important Enough To Be Called By Their Last Names.

People are going to get their architectural and infrastructural fixes anyway they can.

Oct 15, 10 11:57 pm  · 
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jmanganelli

That is an argument that a demand for buildings will exist but not that the AEC industry will have to grow in order to accommodate it. As you note, the AEC industry may not have to grow b/c technology makes people obsolete or because others professions take market share from design firms. In addition, national firms may face more competition from foreign firms who feel they can compete effectively here and who, in coming years, may begin hitting the ceiling of high growth in emerging markets and look to expand to older markets in order to sustain their growth. Also, given that the AEC industry shrunk substantially in the last 2 years, even fairly robust growth at this point, if it were to happen, would not so much be growing the industry as rebuilding it for at least several years. Lastly, population growth or no, Americans and our companies, other than the multinationals, are dealing with loss of resources and opportunities leading to overall diminished expectations and ability to procure resources and services. It is not clear to me that any modeling yet takes into account a structurally different set of goals and capacity to provide for achieving those goals. So I am very skeptical about those projections. I may place more value in them five to ten years from now but I surmise that at this moment, they are not sure what/how to model.

the other thing about structural changes to note is that this downturn is so severe that robust, healthy growth has been significantly disrupted by it as well, which seems to become part of the structural change with which we are confronted. for instance, prior to the downturn, higher ed and healthcare work were two very strong market sectors, not being over-built, but with a very healthy, sustainable growth in demand and supply. This is no longer the case. While these sectors may still be healthier than others, higher ed (at least state supported higher ed) is starting to experience structural change as states drastically cut back support and as private giving is down significantly and as endowments are still not rebuilt after the hit they took in 2008. That is, this downturn has shaken the very bedrock of the industry, the most healthy, most sustainable sectors. And while they are not collapsed, they are greatly weakened and fragile.

Oct 16, 10 9:04 am  · 
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jmanganelli

And healthcare, as far as my understanding of regional dynamics where i am, is much weakened by the fact that so many middle-class and formerly middle-class people who've lost their health insurance are opting to wait when something is wrong instead of seeking treatment they can't afford and then they end up in the ER for treatment and this is disrupting the bottom lines of even very well-run hospitals.

Oct 16, 10 9:10 am  · 
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Distant Unicorn

Well, one thing to add.

http://www.buildingsmartalliance.org/index.php/bsa/newsevents/news/Entry/mcgrawhillconstructionsmartmarketreport2009

The 'learning curve' so to speak on BIM seems to be the most troubling part.

ROI analysis is broken down into 4 categories (beginner, moderate, advanced, expert).

Given that Revit and ArchiCAD are the two predominate software packages, we have a maximum experience level of 23 years for Archicad and 10 years for Revit. However, despite having the Virtual Building concept since 1987... Virtual Building Explorer wasn't 'realized' until 2009.

The practical timeline for BIM software knowledge is roughly 10 years-- 0-2 years beginner, 2-4 years moderate, 4-6 years advanced, 6+ years expert.

About 40% of projects from firms with a beginner level to 20% of projects from expert level firms in BIM say that they get no ROI for using BIM. So, BIM is neutral and or profitable most of the time.

However, only about 30% of the beginner users of BIM technologies actually cost their employer anything-- firms reporting loses from beginners using BIM.

That's pretty convincing. About 50% of beginner-level BIM users break even or get a 25% return on investment. However, given two to three years of experience... those figures for moderate-level users are 8% loss and 3% loss from advanced users.

I'm assuming that ROI is calculated by 1**% of cost (software, training new hires).

In either event, firms have a 1-in-3 chance of actually losing any more by investing in BIM even with entry-level, beginner employees.

Oct 18, 10 1:57 am  · 
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jmanganelli

i think i see where you're going with this, perhaps better than i did before.

an aspect of the AEC profession which seems to be poised for high growth is commissioning/validation of envelope and MEP systems

there are two key components to validation: 1)building better (predictions more accurate) models and simulations, 2) being able to test real hardware in conjunction with the simulations (HIL (Hardware-in-the-Loop) testing)

key to such a notion are: 1) that software-hardware-interaction & planning/space usage design must co-evolve iteratively throughout the design and implementation process; 2) that embedded systems become integral to efficient, successful, controllable architectural environments (to a much greater degree than they now are); 3) that responsible, successful architectural design must formalize process for incorporating these elements into architectural design so that we know buildings perform as specified and interact with people as intended

what designers are poised to collaborate on a design team that now includes software developers, mechanical engineers, computer scientists and interaction designers?

a related change has to do with the shift to IPD project delivery method and the reorganization of the design process that it necessitates.

Oct 18, 10 2:25 am  · 
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Distant Unicorn

Well, in regards to IDP... one aspect I definitely see as a potential roadblock is in media incompatibility.

That, itself, may lead to some varies of structural problems in employment. And what I mean by this... is issues in creating base data on media that may not work with IDP or any other variety of project delivery.

If, say, a designer, architect or landscape architect primarily produces work through physical media (drawing, modelmaking), then the initial design data in 'technically' unavailable to a design process. However, there are many current and in-development technologies that bridge this gap.

In many settings, this sort of thing tends to produce more of a technological divide between work input-output. Despite this, there's nothing to say this will or will not work in a given environment as for the most part... this is entirely preferential.

However, personal preferences can be damaging if a 'digital' flexibility is required by regulation, contract, permitting or customer demand. I'm assuming with many of the new EU regulations on buildings and many states enacting or considering various building performance benchmarks... 'flexible data' will become practice de jure.

The argument, however, exists that some aspects of design and documentation (especially more noticeable in landscape architecture) are and probably forever will be easier to do in a physical medium.

With those points in mind, the biggest push or interest in BIM seems less about producing actual 'work' and more about having 'communication and collaboration' in addition to "accurate inventories."

I can understand the accurate inventories part-- How many door knobs are actually in a building like the empire state building?

But, communication? Really? The practice of architecture is essentially about creating relatively accurate descriptions of what they are building. Is it so hard to talk to coworkers? [This is a hyperbolic rhetoric.]

Oct 18, 10 2:50 am  · 
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