Sunday, December 03, 2023

Regular Employment is Dangerous


I've got some genuinely crazy fans on the dividends groups. One guy was so crazy and affected by my statement that "regular employment is dangerous" that he sent my LinkedIn profile to a headhunter who promptly concluded that I would never be able to get a job. I might be the only guy who can get a rejection from a headhunter for a job I never even applied for. 

( If you guys are wondering, the job is a robotic automation apprenticeship. I researched because I wanted to hunt down the headhunter and give him a piece of my mind. ) 

Today, I won't be covering the primary details of why regular employment is dangerous. We know that folks here have to deal with outsourcing and retrenchment as part and parcel of corporate life.  

Before I unpack the statement, regular employment is still the best way to attain FIRE, and I've actually turned away some unemployed potential clients because I'm not a miracle maker. So don't go resigning from your company reading this post.

a) Most economic rewards in Singapore go to capital rather than labour anyway

First of all, according to some economic data, in Singapore, labour's share of GDP is around 40+ per cent, which is about 10% lower than in many OECD countries. This means that in this country, we tend to get less of our productivity from earned income. Most rewards do, in fact, accrue to capital owners. Our attitude towards our work should be a means to generate capital because that's how you earn a larger share of our economy today.

b) All employment is time theft

The second reason is that if you look at your life from a different angle, all employment is time theft. At least in Singapore, we have yet to start to reward employees for results, so some folks are still bound by a 9-5 job. Why can't we leave the office when our job is done? There are also very few laws granting staff overtime after they hit a certain income. I think in this new era, we should beware of jobs that take up more of our time than necessary because you can monetise your after-office hours. This covers conference calls with the US and Europe.

But so far, you are not being compensated for it, and we've normalised the theft of time by organizations and companies for quite a while.

c) Reskilling and Skillfutures will benefit employers and may become bad investments of your time

I'm speaking with a lot of authority here because I was the IT certification king in my 20s and 30s. With Skillfutures, everybody is potentially the certification king of tomorrow, and the supply of skills will begin to exceed demand. Thanks to Coursera, the IT certifications kings of the 00s will have gone into extinction. In my case, the IT Certification King has transformed into the Dividends Pig. 

Here's a way to think about certifications vs qualifications. In economics, the Coarse theorem says that companies are better off outsourcing tasks which are well-defined and can be turned into a contract. Companies prefer to hire permanent staff when their tasks cannot be so easily documented and where work requires some flexibility and ability to handle ambiguity. 

Here's the rub: In order to be able to conduct a skills future course, the government must define a syllabus and come up with ways to test students on what they have learned. This is not too different from clearly defining a task. This will ultimately make it easier to outsource to another party. The process is very different from a university degree program that invests time into developing a skill but an attitude to deal with and handle novel problems. 

In my work in adult education, which has nothing to do with investing, I teach and describe things like HR performance appraisal forms. Students can describe them quite well and identify a system. Students are so-so at figuring out the strengths and weaknesses of these systems, but we do spoon-feed it to them. However, students are bad at predicting what happens to a company culture when a performance appraisal methodology is internalised. You can argue that predicting how employees will game the system is well beyond what adult education entails, but I'm quite passionate about ensuring that my students have some idea of how to do this. 

So what does this mean? MNCs and bigger companies will still pay a huge premium for university graduates and folks with qualifications. They can train employees to get skills for their work, but the value in having permanent staff is the general intelligence to gain market share and reduce costs. These guys can use a latticework of models they pick up and apply it to new situations at work ( hat tip to Charlie Munger). 

Basically, what I'm saying is that skills can help you get your current job, but to move up would require more than skills and if Skillsfutures makes skills available to everyone, you won't really benefit from spending too much time developing them. The mid-career degree will become inevitable. 

If regular employment is dangerous, what is the point of following Millennial career influencers who focus on office politics, leadership and networking? When the ones who see themselves as major players in the office are losing their jobs when interest rates go up? 

Fortunately for us, Gen Z is already responding to this devaluation of regular employment. 

My favourite Gen Z invention is overemployment, where highly productive software engineers work on two more jobs at the same time. This will allow them to FIRE even faster and cost them just a small part of their youth. Gen Z in Singapore should exploit the low unemployment rate to do this. You can figure out what to do with your life later. The only caveat is that over-employment must be used in tandem with investing to build capital to eventually replace your earned income. 

Imagine a new-age worker creating a combo chain of over-employment, dividends, asymmetric investing, and geo-arbitrage. Such an influencer does not exist in SG right now, but someone needs to invent one ASAP.

As much as I am now a sceptic about regular employment, downshifting and lying flat is probably a dumb idea. We should see ourselves as time merchants, selling out time for as much money as we can, then using our capital to buy other people's time to balance things out later in life. 

1 comment:

  1. Actually if you were to maybe say Regular Income ONLY, is dangerous, the person might not be as triggered. I agree wholeheartedly with you. Even if its not a total removal of income (i.e. retrenchment) but say a paycut, the psychological stress on readjusting your saving rates and recalibrating the "defense mode" against future finance damage (you have lesser skill points and probably need to put that limited skill points on evasion and critical strike somemore, which slows down your overall progress) can also be tremendous.