Actuaries are sponges and so they are endangered

[Dark Ages America]

Actuaries may also be considered to be part slimer as well.

In either case, the profession is predicted to go down the tubes.

Is Your Job an Endangered Species?

So where the heck are all the jobs? Eight-hundred billion in stimulus and $2 trillion in dollar-printing and all we got were a lousy 36,000 jobs last month. That's not even enough to absorb population growth.

You can't blame the fact that 26 million Americans are unemployed or underemployed on lost housing jobs or globalization—those excuses are played out. To understand what's going on, you have to look behind the headlines. That 36,000 is a net number. The Bureau of Labor Statistics shows that in December some 4,184,000 workers (seasonally adjusted) were hired, and 4,162,000 were "separated" (i.e., laid off or quit). This turnover tells the story of our economy—especially if you focus on jobs lost as a clue to future job growth.

With a heavy regulatory burden, payroll taxes and health-care costs, employing people is very expensive. In January, the Golden Gate Bridge announced that it will have zero toll takers next year: They've been replaced by wireless FastTrak payments and license-plate snapshots.

Technology is eating jobs—and not just toll takers.

Tellers, phone operators, stock brokers, stock traders: These jobs are nearly extinct. Since 2007, the New York Stock Exchange has eliminated 1,000 jobs. And when was the last time you spoke to a travel agent? Nearly all of them have been displaced by technology and the Web. Librarians can't find 36,000 results in 0.14 seconds, as Google can. And a snappily dressed postal worker can't instantly deliver a 140-character tweet from a plane at 36,000 feet.

So which jobs will be destroyed next? Figure that out and you'll solve the puzzle of where new jobs will appear.

Forget blue-collar and white- collar. There are two types of workers in our economy: creators and servers. Creators are the ones driving productivity—writing code, designing chips, creating drugs, running search engines. Servers, on the other hand, service these creators (and other servers) by building homes, providing food, offering legal advice, and working at the Department of Motor Vehicles. Many servers will be replaced by machines, by computers and by changes in how business operates. It's no coincidence that Google announced it plans to hire 6,000 workers in 2011.

But even the label "servers" is too vague. So I've broken down the service economy further, as a guide to figure out the next set of unproductive jobs that will disappear. (Don't blame me if your job is listed here; technology spares no one, not even writers.)

• Sloppers are those that move things—from one side of a store or factory to another. Amazon is displacing thousands of retail workers. DMV employees and so many other government workers move information from one side of a counter to another without adding any value. Such sloppers are easy to purge with clever code.

• Sponges are those who earned their jobs by passing a test meant to limit supply. According to this newspaper, 23% of U.S. workers now need a state license. The Series 7 exam is required for stock brokers. Cosmetologists, real estate brokers, doctors and lawyers all need government certification. All this does is legally bar others from doing the same job, so existing workers can charge more and sponge off the rest of us.

But eDiscovery is the hottest thing right now in corporate legal departments. The software scans documents and looks for important keywords and phrases, displacing lawyers and paralegals who charge hundreds of dollars per hour to read the often millions of litigation documents. Lawyers, understandably, hate eDiscovery.

Doctors are under fire as well, from computer imaging that looks inside of us and from Computer Aided Diagnosis, which looks for patterns in X-rays to identify breast cancer and other diseases more cheaply and effectively than radiologists do. Other than barbers, no sponges are safe.

• Supersloppers mark up prices based on some marketing or branding gimmick, not true economic value. That Rolex Oyster Perpetual Submariner Two-Tone Date for $9,200 doesn't tell time as well as the free clock on my iPhone, but supersloppers will convince you to buy it. Markups don't generate wealth, except for those marking up. These products and services provide a huge price umbrella for something better to sell under.

• Slimers are those that work in finance and on Wall Street. They provide the grease that lubricates the gears of the economy. Financial firms provide access to capital, shielding companies from the volatility of the stock and bond and derivative markets. For that, they charge hefty fees. But electronic trading has cut into their profits, and corporations are negotiating lower fees for mergers and financings. Wall Street will always exist, but with many fewer workers.

• Thieves have a government mandate to make good money and a franchise that could disappear with the stroke of a pen. You know many of them: phone companies, cable operators and cellular companies are the obvious ones. But there are more annoying ones—asbestos testing and removal, plus all the regulatory inspectors who don't add value beyond making sure everyone pays them. Technologies like Skype have picked off phone companies by lowering international rates. And consumers are cutting expensive cable TV services in favor of Web-streamed video.


Like it or not, we are at the beginning of a decades-long trend. Beyond the demise of toll takers and stock traders, watch enrollment dwindle in law schools and medical schools. Watch the divergence in stock performance between companies that actually create and those that are in transition—just look at Apple, Netflix and Google over the last five years as compared to retailers and media.

But be warned that this economy is incredibly dynamic, and there is no quick fix for job creation when so much technology-driven job destruction is taking place. Fortunately, history shows that labor-saving machines haven't decreased overall employment even when they have made certain jobs obsolete. Ultimately the economic growth created by new jobs always overwhelms the drag from jobs destroyed—if policy makers let it happen.

http://online.wsj.com/article/SB1000...p_mostpop_read

[limabeanactuary]

We already had a thread yesterday

http://www.actuarialoutpost.com/actu...d.php?t=211617

[Gyudon]

I love this sponge argument against actuaries. Unfortunately, it ignores some basic facts:

1) Actuarial departments are often much larger than "legally" required. In other words, more money is being thrown at them than just to have someone, for example, certify reserves, or sign off on a rate filing.
2) Companies not only pay the market rate for actuaries, sometimes they pay significant premiums above the market rate. They feel that the extra $$ is worth it. In a competitive economy, companies with significantly slimmer actuarial departments would perform better if actuaries are not providing value.
3) Exams limit supply but you can always hire non-fellows or someone with less exams. No law forces companies to have everyone in an actuarial department be a fellow. And yet, many departments are very top heavy with sometimes many more fellows than students. All are obviously paid more.

Sorry, I don't know what you do at your job but actuaries don't just sit there collecting fees because they passed exams. Also, have you not heard about the crisis of unemployment among lawyers? By some accounts it's the worst legal economy in a quarter century due to the excess supply of lawyers, especially for newly minted ones. They obviously didn't succeed in "sponging" by legally limiting supply.

[ElDucky]

So a computer wins Jeopardy and suddenly every thread is about doom.

[Starscream]

Originally Posted by Gyudon

I love this sponge argument against actuaries. Unfortunately, it ignores some basic facts:

1) Actuarial departments are often much larger than "legally" required. In other words, more money is being thrown at them than just to have someone, for example, certify reserves, or sign off on a rate filing.
2) Companies not only pay the market rate for actuaries, sometimes they pay significant premiums above the market rate. They feel that the extra $$ is worth it. In a competitive economy, companies with significantly slimmer actuarial departments would perform better if actuaries are not providing value.
3) Exams limit supply but you can always hire non-fellows or someone with less exams. No law forces companies to have everyone in an actuarial department be a fellow. And yet, many departments are very top heavy with sometimes many more fellows than students. All are obviously paid more.

Sorry, I don't know what you do at your job but actuaries don't just sit there collecting fees because they passed exams. Also, have you not heard about the crisis of unemployment among lawyers? By some accounts it's the worst legal economy in a quarter century due to the excess supply of lawyers, especially for newly minted ones. They obviously didn't succeed in "sponging" by legally limiting supply.

One could also argue that lawyers sponged too well for too long. The actuarial guild is rent seeking just like any other guild (profession, union etc), we just need to know how much to sponge before someone finds a better - cheaper alternative.

From conversations I've had this seems to be taking place. Statisticians are doing the cutting edge modelling. FCAS Exam 5's treatment of GLM's is useless. You can't demonstrate mastery of modelling on a written test, you need a computer and a dataset and lots of time.
I spend a large amount of my time programming, and displaying results in excel. This could obviously be done by someone who doesn't take exams.

I'm studying for the new exam 6, so this may explain my disaffection for the profession at the moment.

[mathmajor]

Originally Posted by ElDucky

So a computer wins Jeopardy and suddenly every thread is about doom.

That computer isn't a millionaire. The other two gents were.

[Sindel]

Originally Posted by mathmajor

That computer isn't a millionaire. The other two gents were.

But the organization behind that computer is at the forefront of future change, which is more meaningful, important, and impressive than "being a millionaire".

[Peterson28]

Originally Posted by Starscream

I'm studying for the new exam 6, so this may explain my disaffection for the profession at the moment.

[TZK]

Originally Posted by Sindel

But the organization behind that computer is at the forefront of future change, which is more meaningful, important, and impressive than "being a millionaire".

lol... Watson is not at the forefront of future change. Watson is an instance of the 70s approach to AI, which they finally got to work (for a very specific task) with today's technology and tons and tons of effort.

The real change that is coming soon can just replace all workers, causing us to fundamentally reevaluate how our society works.

[limabeanactuary]

Originally Posted by TZK

lol... Watson is not at the forefront of future change. Watson is an instance of the 70s approach to AI, which they finally got to work (for a very specific task) with today's technology and tons and tons of effort.

The real change that is coming soon can just replace all workers, causing us to fundamentally reevaluate how our society works.

Het, garbage doesn't just pick itself up, you know....

.....wait...... robotic garbage cans....maybe it will be able to!

Okay, now I'm scared.

In other news, here's a robot making a cake:
http://tasteologie.notcot.org/post/11489/