My 2004 Predictions
By Marty Nemko
I didn’t do badly in my predictions for 2003. I even predicted the stock market turnaround: I wrote, "Stocks will rise." And in fact, the Dow Jones is up 25 percent since then and my two stock picks, Citigroup is up 43 percent and Biotech Index shares have gained 50 percent.
Of course, my predictions weren’t all correct. Among my losers: "There will be a terrorist attack on U.S. soil in 2003."
Undaunted, I will start my predictions for 2004 by asserting that this year, alas, there will be a terrorist attack on US soil. There simply are too many difficult-to-prevent threats, for example: a person releasing a vial of anthrax in a stadium, a dirty radiologic device hidden in a truck parked in a busy downtown, an attack on a major bank’s computer network. Terrorism is ever more likely because terrorist organizations are regrouping and getting more sophisticated.
Pocket of opportunity: Work for US Homeland Security, state and local public health departments, and private firms developing preventives and cures for biological, chemical, nuclear, and computer attacks.
California has become a tough place to be an employer. California’s taxes are among the nation’s highest and its business regulations among the most stringent. In addition, California employees, especially in the Bay Area, are more likely than average to sue employers for wrongful termination or sexual harassment. Employee litigiousness also largely explains why California businesses pay high rates for workers compensation insurance. In addition, California has a high crime rate, bad traffic, the nation’s most expensive housing, rampant illegal immigration, and as of January 1, 2004, nearly all California employers will be required to provide all employees (even new ones in small companies) up to six weeks of paid family leave in any 12 month period. As a result of all this, the 8.2 percent growth in the economy has created few new jobs, especially in California, and I predict the outmigration of California businesses to other states will accelerate, which will deepen California’s fiscal crisis, Governor Schwarzennegger's pollyannaish pontifications not withstanding.
Pockets of opportunity: Consider moving to states that are the beneficiaries of the outmigration. The fastest growing states are Nebraska, Kansas, South Dakota, North Dakota, and the Gulf Coast of Florida. Cities growing particularly rapidly are: Ft. Myers Florida, Bentonville Arkansas, Reno and Las Vegas Nevada, and Boise Idaho. Also, work should be plentiful for interstate relocation companies and moving companies.
Those businesses remaining in California will make ever-greater efforts to minimize hiring. Rather than hiring new employees, employers will increasingly search for a technology solution. For example, insurance companies are starting to use computers instead of humans to evaluate applications for insurance.
Pocket of opportunity: Sales of sophisticated technology solutions that enable businesses to avoid hiring. I do not predict an increase in jobs developing technology. Many such jobs, as described a few paragraphs later, are increasingly being offshored.
When employers do need to hire, they will increasingly use temps to ensure workers are on the payroll only when they’re needed and to reduce the risk of employee lawsuits for wrongful termination.
Pocket of opportunity: Work as a recruiter for a temp agency. Or accept temp work in your field, but recognize that to stay employable, your skill set needs to stay up-to-date and that you must build and nurture a network of contacts.
Many more US jobs will be offshored. When employers do need full-time employees, they increasingly will first turn to the millions of highly qualified workers in such countries as India, China, and the Philippines, who are thrilled to be earning 20 percent of what US workers earn.
Some companies are going even further afield. For example, TaylorMade, a producer of high-end golf clubs, years ago moved its manufacturing to Mexico. A few years later, it moved it to China to save labor costs, and recently has moved to Viet Nam where costs are lower still.
According to a UC Berkeley study, as many as 14 million US jobs are at risk of being offshored. Of course, manufacturing has long been offshored and tech jobs are increasingly sent abroad, for example, IBM just offshored 4,730 programmer jobs to India. But offshoring is extending far beyond. For example:
§ The accountants who complete Procter and Gamble’s US tax returns are in the Philippines.
§ X-rays of patients, notably at Harvard-affiliated Massachusetts General Hospital, are read by radiologists in India.
§ Even the government isn’t immune. Contractors for the US Dept. of Housing and Urban Development and the New Jersey Department of Welfare have offshored jobs.
Pocket of Opportunity: Work for a company that helps US companies recruit and train offshore workers: for example, Cognizant, Infosys, Wipro, and Cymbal.
But what if you don’t want to contribute to the offshoring of American jobs and do want to stay in the Bay Area? Here are some predictions for 2004 that can benefit you:
The American consumer ever more makes decisions based on familiarity with a brand name. Because of that and because of large companies’ greater resources, growth in the economy will NOT be in small companies as in the past, but in brand-name companies, but only those in fields poised for growth such as in biotech and high-tech. Those sorts of companies will offer the best prospects not just for jobs and for investment.
Pockets of Opportunity: Fortunately, many such companies are based or have a significant presence in the Bay Area: Ebay, Yahoo!, Genentech, Chiron, Microsoft, HP, and Google, although Google just announced it is building its new R&D facility in India. I’m also bullish on two smaller biotech companies: Geron and Scios. Fueling the job growth, I predict that thanks to rapidly growing understanding of the human genome and proteomics, a major biotech or nanotech discovery will occur in 2004.
Rapidly increasing Latinization of California. California’s population is 36 million of which five million are legal immigrants and an estimated six million more are illegal. The percentage of Latinos will continue to increase because the Latino birthrate is much higher than average and because governor Schwarzennegger has indicated he will support, with some conditions, drivers licenses for illegals. This will give a clear signal to residents of other countries, especially to Mexico’s 101 million citizens, that even when the US is aware that a person is an illegal, he or she will not be deported. This will cause increased illegal immigration.
Pockets of Opportunity: All jobs serving Latinos. The greatest demand will be in basic services: health care, education, food, housing, entertainment (TV, music, magazines, concerts, clubs) and legal services.
Government jobs will be job seekers’ treasure trove. Government has a luxury companies don’t have: If government needs money, it usually finds a way to raise taxes. So, government has continued to hire even during the recession’s darkest days. A year ago, for example, www.usajobs.opm.gov, a website that lists just 60% of federal job openings listed 16,000 positions! As I write this today, there are even more: 17, 877 to be exact. I haven’t counted, but a quick review of corporate websites suggests that even the nation’s 50 largest corporations combined didn’t post as many US openings. For example, Hewlett Packard (#16) posted just 283. And most government jobs are full-time with benefits and unsurpassed security of employment.
Pockets of opportunity: Government jobs. In addition to the federal jobs posted on www.usajobs.opm.gov, thousands of federal jobs are posted on individual agencies’ websites. For a portal to those, go to www.federaljobs.net. Jobs with the state of California are at www.spb.ca.gov. A portal to the websites of local governments and universities is at www.abag.ca.gov.
Online education and training will grow. Over the past decade, the University of Phoenix has made a major investment in developing state-of-the-art online degree programs. That's a major reason the University of Phoenix is now the nation’s largest private university. Other universities are increasingly recognizing that many students prefer to trade the in-person classroom experience for the convenience of taking classes at home, where you can start and stop class sessions at your pleasure.
Pocket of opportunity: Work for a university offering significant online education or for a company that develops online corporate training programs, for example, San Francisco’s Digital Think, which, according to Deloitte Consulting, is the 22nd fastest growing technology company in North America. In a good economy or bad, health care will continue to boom. We Boomers’ bodies are aging and we will soon need more health care to keep us from falling apart.
Pockets of opportunity: Shortages will continue not just in nursing, but most health care occupations: from diagnostic imaging to dental hygiene to medical records coding. Because of Kaiser Permanente’s relatively affordable individual health plans and the growing number of Bay Area residents who will not be covered by group insurance, Kaiser will likely have a particularly large number of job openings.
Financial services will grow. Everyone’s nervous: Those starting out fear they’ll never afford a house. Boomers worry they’ll outlive their retirement savings.
Pocket of opportunity: For the six months ending September 30, employment ads on Monster.com for financial services jobs rose 49%, many of which are for salespeople.
HIV/AIDS will have greater worldwide economic impact because the pandemic is poised to enter its mass mortality phase. Rich countries will feel obliged to assist developing nations in coping with its cataclysmic impacts of AIDS’ deaths on their economy and on families’ lives.
Pocket of Opportunity: Work for government agencies and non-profit organizations serving developing nations.
Internet advertising will increase. Thanks to faster user bandwidth and new compression algorithms, advertisers will be able to replace those annoying pop-up ads with annoying full-motion video commercials. Such advertising will primarily be on major sites such as Google, AOL, MSN, Amazon and Yahoo!.)
Pocket of opportunity: Selling Internet ads for major players such as those listed above.
Social networking will start to take off. Sites like match.com have quickly dominated the romantic hookup market. Now, sites such as ryze.com, tribe.com, spoke.com, linksv.com, and linkedin.com allow people of similar career interests to introduce themselves to each other. These sites will also be a boon to job seekers.
Pocket of opportunity: Use those sites to enhance your career and avocational interests.
Dean fades, Hillary wins. Polls indicate that the Democrat who would run closest to President Bush in November is Hillary Clinton. She says she’s not running (belied by her recent trip for a photo op with the US soldiers and her website which highlights her international experience) but I predict that as we get closer to the election, rather than face defeat against Bush, a draft-Hillary movement will swell and she will accept her party’s nomination. With the media’s help and an unprecedented voter turnout, especially among women, Hillary, with Bill Clinton as vice president, will beat George Bush in November and become America’s first female president.
Pockets of opportunity: Hillary is a winner. If she’s not president in 2004, she’ll certainly be the frontrunner in 2008. Try to jump on Hillary’s bandwagon early by landing a job working or volunteering for her. How? Not by answering an ad, I promise. Ask everyone you know if they know someone who knows her, someone on her large staff or even someone who knows someone on her staff. Alas, networking works.
© Marty Nemko 2004-2018. Usage Rights