Today is Labour Day (or Labor Day for my American friends).

Many of us simply think of it as the official end of summer, but it’s also the day we’re supposed to celebrate the labour union movement and the achievements of workers. Given this, and the fact that yesterday’s post was about Detroit, it seems like an appropriate time to talk about jobs.

In many ways, the woes of Detroit are simply an extreme example of what’s happening in many advanced economies. The loss of manufacturing based jobs is creating a void that is not being filled - or is being filled differently - by new industries.

The first piece to this is what I mentioned yesterday: education.

Manufacturing jobs allowed unskilled workers to make good middle class salaries. But other than a few remaining instances - such as in Fort McMurray, where high school graduates can make six figures working in the Canadian oil sands and the average price of a home is pushing $800,000 - I think it’s pretty clear that the opportunities for unskilled workers is on the decline.

Therefore (and this is old news), we clearly need to figure out ways to retrain existing workers and ensure that the next generation is equipped with the skills and knowledge to compete in this new world. The problem though - and this is the second piece - is that I’m not sure the new economy will require the same raw number of people.

What I mean by this is that scaling up production of an automative plant is quite different than scaling up an internet platform like Twitter or Tumblr. You just don’t need as many people, which is why the returns to being smart have grown massively for those few. And this is part of the reason we’re seeing rising income inequality across the board.

Now, I don’t know what the answer is, but I think we’ve already shown that the transition to a new economy isn’t going to be a smooth one. To that end, I’ll leave you with one last thought which came from a former professor of mine at Rotman, Walid Hejazi.

His argument is that it’s actually unethical for governments to subsidize unproductive sectors of the economy, such as a manufacturing, in order to sustain jobs. The reason being that you then have high school students telling themselves that they don’t need to go to University because they can simply go work at the local plant and make decent money. But what they don’t realize is that there’s a very real expiry date to those opportunities and, when it comes, it’ll be much harder for them to be retrained.

What are your thoughts?

Here’s what venture capitalist Fred Wilson had to say today.

I’m planning a trip to Detroit this month.

Some of you might be wondering why on earth I would do that, but I’m actually super excited. Why? Because I’m fascinated by the city. Detroit is such a dramatic example of how the fortunes of a city can change. I think some people forget what places like New York City and South Beach were like in the 1980s.

But more importantly, I’m interested in the future of Detroit and the opportunities that might lie ahead. In many ways, the city feels like a clean slate. It’s a city that’s trying to completely rebuild and reinvent itself. And there’s a lot of smart (and rich) people, like billionaire Dan Gilbert, putting their weight behind its renewal. Through his company Bedrock, he has quickly become one the largest private landlords in the city. I also have a good friend who’s working in Detroit on

One of the North American truisms that I often like to challenge is the belief that kids should be raised in a house.

I’m interested in this topic, not because I’m planning for a kid, but because Toronto has gone through such a dramatic transformation over the past 15+ years to become a city where more and more people are living in multi-family dwellings (condos, apartments, and so on).

However, there’s still the belief amongst many circles that condo living is merely a stepping stone on the way to a house. Since Millenials have effectively added a new life phase between University and marriage, condos have become the home of choice for many twenty and thirty somethings. But how long will they stick around? I see a lot of people in my network getting married and subsequently moving from a condo to a house.

Why is this?

Is it because of schools? Is it a cultural belief that families require a house and a backyard? As someone who grew up in the suburbs, I can tell you that I never played in the backyard. I played on the street with other kids. I used a shared public space rather than a private one.

On a practical level, I think the condo-to-house tradition has a lot to do with the fact that condos are just more expensive on a per square foot basis than wood-framed houses. For the same price that you might pay for a small 2 bedroom condo in Toronto, you could still conceivably buy a 3 bedroom house in some inner city neighbourhood.

Today is Labour Day (or Labor Day for my American friends).

Many of us simply think of it as the official end of summer, but it’s also the day we’re supposed to celebrate the labour union movement and the achievements of workers. Given this, and the fact that yesterday’s post was about Detroit, it seems like an appropriate time to talk about jobs.

In many ways, the woes of Detroit are simply an extreme example of what’s happening in many advanced economies. The loss of manufacturing based jobs is creating a void that is not being filled - or is being filled differently - by new industries.

The first piece to this is what I mentioned yesterday: education.

Manufacturing jobs allowed unskilled workers to make good middle class salaries. But other than a few remaining instances - such as in Fort McMurray, where high school graduates can make six figures working in the Canadian oil sands and the average price of a home is pushing $800,000 - I think it’s pretty clear that the opportunities for unskilled workers is on the decline.

Therefore (and this is old news), we clearly need to figure out ways to retrain existing workers and ensure that the next generation is equipped with the skills and knowledge to compete in this new world. The problem though - and this is the second piece - is that I’m not sure the new economy will require the same raw number of people.

What I mean by this is that scaling up production of an automative plant is quite different than scaling up an internet platform like Twitter or Tumblr. You just don’t need as many people, which is why the returns to being smart have grown massively for those few. And this is part of the reason we’re seeing rising income inequality across the board.

Now, I don’t know what the answer is, but I think we’ve already shown that the transition to a new economy isn’t going to be a smooth one. To that end, I’ll leave you with one last thought which came from a former professor of mine at Rotman, Walid Hejazi.

His argument is that it’s actually unethical for governments to subsidize unproductive sectors of the economy, such as a manufacturing, in order to sustain jobs. The reason being that you then have high school students telling themselves that they don’t need to go to University because they can simply go work at the local plant and make decent money. But what they don’t realize is that there’s a very real expiry date to those opportunities and, when it comes, it’ll be much harder for them to be retrained.

What are your thoughts?

Here’s what venture capitalist Fred Wilson had to say today.

I’m planning a trip to Detroit this month.

Some of you might be wondering why on earth I would do that, but I’m actually super excited. Why? Because I’m fascinated by the city. Detroit is such a dramatic example of how the fortunes of a city can change. I think some people forget what places like New York City and South Beach were like in the 1980s.

But more importantly, I’m interested in the future of Detroit and the opportunities that might lie ahead. In many ways, the city feels like a clean slate. It’s a city that’s trying to completely rebuild and reinvent itself. And there’s a lot of smart (and rich) people, like billionaire Dan Gilbert, putting their weight behind its renewal. Through his company Bedrock, he has quickly become one the largest private landlords in the city. I also have a good friend who’s working in Detroit on

One of the North American truisms that I often like to challenge is the belief that kids should be raised in a house.

I’m interested in this topic, not because I’m planning for a kid, but because Toronto has gone through such a dramatic transformation over the past 15+ years to become a city where more and more people are living in multi-family dwellings (condos, apartments, and so on).

However, there’s still the belief amongst many circles that condo living is merely a stepping stone on the way to a house. Since Millenials have effectively added a new life phase between University and marriage, condos have become the home of choice for many twenty and thirty somethings. But how long will they stick around? I see a lot of people in my network getting married and subsequently moving from a condo to a house.

Why is this?

Is it because of schools? Is it a cultural belief that families require a house and a backyard? As someone who grew up in the suburbs, I can tell you that I never played in the backyard. I played on the street with other kids. I used a shared public space rather than a private one.

On a practical level, I think the condo-to-house tradition has a lot to do with the fact that condos are just more expensive on a per square foot basis than wood-framed houses. For the same price that you might pay for a small 2 bedroom condo in Toronto, you could still conceivably buy a 3 bedroom house in some inner city neighbourhood.