Back in the 1960s when I was a kid. My father told me that the key to success was getting as much education as I could in a technical field and working for private industry. In my own lazy and wayward manner, I took his advice and on the whole the advice was actually very sound. I ended up in engineering, supported my family through their college years and lived a reasonably comfortable existence at a step beyond what my parents had.
Fast forward to 2019. I have grandsons who will be coming of age in the next five to ten years. Would my father’s advice be as good for them as it was for me? Maybe, maybe not. Let’s look at some of the factors that have changed.
Back when I was young, the American economy was the engine of world economic growth. Technical innovation in almost every field occurred primarily here. Computer science was the greatest innovation but advances in materials science, chemistry, medicine and electronics were remarkable. Jobs in all fields went through booms and busts in synchrony with the business cycles but people raised families, bought houses and sent their kids to college on the strength of American industry employing them consistently. And this was at all levels. They needed production personnel, tradesmen, maintenance workers, support staff, along with scientists, engineers, accountants, lawyers and business managers. America worked.
But starting in the early 1990s American business got the bright idea that American business didn’t need American workers. First slowly then rapidly, jobs were shifted from where labor was expensive to where it was dirt cheap. NAFTA was the beginning of this. A factory across the border in Juarez could build automotive parts for a fraction of what it would cost in El Paso right across the border in Texas. But things really got out of hand when the globalists shifted whole industries to China. I personally saw the beginning of the export of polystyrene manufacturing to China in the 1990s and assume that the wholesale loss of intellectual property happened in just the same way with all the other industries that were sent there to avoid the environmental regulations and the normal labor costs in the United States. And with those industries went all the manufacturing jobs that had existed with them here. In my later career I was in an industry that was relatively immune to this devastation but lately between off-shoring and the importation of Indian and Chinese scientists and engineers the same kind of fate awaits these higher-level jobs and the kids coming out of school hoping for them.
For now, the crème de la crème of the best professional schools can hope to find good jobs in the legacy industries remaining in the United States. But for everyone else it is an uncertain and changeable environment.
Recently what I’ve been thinking about is small business ownership. If you can select an industry that is relatively hard to replace by cheap overseas labor, owning your own business can both help someone raising a family and also provide jobs for family that will be needing them as they reach maturity.
What kinds of businesses could these be? Obvious ones are the building and business trades. Electricians, carpenters, plumbers, HVAC installers, roofers, mechanics, IT technicians and repairmen. Of course, there are all kinds of businesses that haven’t been completely devastated by cheap Chinese crap from Amazon.com. Custom manufacturers and specialty equipment manufacturers, specialty metal workers and welders all provide products and services for businesses that still exist in the US. Someone who is good at orbital sanitary welding and is conscientious about the paperwork that goes along with it can make a good living servicing the needs of microelectronics and pharmaceutical customers.
The way I think about it, if you’ve spent your life building up an expertise maybe you can use some of these skills to start or buy a business that you can work your children into. Giving your children a leg up in the kind of world we live in today sounds like something that make sense. Schooling will still have its value but instead of spending hundreds of thousands of dollars to got to Stanford you could go to State Tech and then go to work for the family business.
I’m still working on my own version of this plan but I throw it out there as an idea.
Of course, it’s not a panacea. There’s no guarantee that your kids will be interested in the field you start a business in. After all, if your kid wants to be an astrophysicist chances are, he won’t want to be a plumber. And it’s not uncommon that family members cannot work together because of differences in temperament.
But there are advantages to working for family that are unique. Transitioning a business from a father to his sons provides a flexible environment for on the job training, reasonable terms for both sides of the ownership transition and the possibility for someone even beyond normal retirement age to provide real value to the business on a part time basis. It might even make long term health care more affordable for the older generation.
Obviously, many people aren’t in a position to start a small business, especially while raising a family. It might even be more applicable to grandfathers but I think it’s another way to try to protect your family from the negative changes that the American business world has seen in the last generation. Something to consider.