Mobile Home Park Mastery: Episode 320

The Impact of The End Of The “Knowledge Worker” Era

Subscribe To Mobile Home Park Mastery On iTunes
Subscribe To Mobile Home Park Mastery On Google Play
Subscribe To Mobile Home Park Mastery On Stitcher

There is a seismic shift in America right now that will have wide-ranging ramifications for all industries including the mobile home park sector, and that’s the elimination of the “knowledge worker”. In this Mobile Home Park Mastery podcast we’re going to drill down on what “knowledge workers” are, why they are doomed, and how this change will have a megatrend impact on all industries and investments including mobile home parks.

Episode 320: The Impact of The End Of The “Knowledge Worker” Era Transcript

Last year was the 40th anniversary of the book, Megatrends, written by the late John Naisbitt. And that book, when it came out, identified a concept that seemed at that moment revolutionary, that there were some forces that go on economically in America that are so strong that you've gotta be on the right side of those trends, there's no way you could battle. It's like trying to row upstream against a very fast current. You wanna go with the flow and being oriented with those mega trends is extremely important. This is Frank Rolfe with the Mobile Home Park Mastery Podcast. There's one mega trend out there though, which doesn't get a lot of commentary, but to me is the biggest of all. I'm sure we have a lot of mega trends in America. We have the baby boomers retiring at 10,000 people per day. We all know those items, but there's one that is so scary that most people just don't wanna talk about it, and that revolves around something called the knowledge worker.

Now, if you look up at the definition of a knowledge worker, it's defined as a worker whose main capital is knowledge, basically professionals, physicians, pharmacists, architects, engineers, scientists, designers, accountants, lawyers, journalists. Basically anyone who thinks for a living. And the problem we have right now is the knowledge worker is under attack and will probably over time kind of just be phased out as a career path. Now, it will take a while, but the issue is two items. Number one, the whole idea of virtual assistants or hiring people from afar at much reduced wages, this has been going on in a lot of industries for a while. In the accounting industry, many firms have people over in other countries like India, where you can get a certified accountant in India at a fraction of the price you can in the United States. And big firms basically have these people do much of the accounting and they offload it to them, then try and charge American pricing for work that is done out of our country. But that's not really the biggest threat.

That's been around now for quite a while, and yes, there has been some jobs lost from that, but the big one, of course, is the advent of AI, also known as artificial intelligence. And the problem is it has gotten from just a conceptual idea to a reality, you can go on chatGPT right now and play around with AI and you'll see it's very effective. Very scary, you can go to AI and say, "Hey, AI, can you write me an essay on the beginnings of the Civil War?" And it will pop out a really nice five-page essay for you in a matter of minutes. And clearly, when I can have a computer do much of the work of the knowledge worker, I don't really need the knowledge worker. So what is it going to mean when we start losing, as an industry, knowledge workers, and how will that impact the Mobile Home Park business? Well, the first thing you're gonna see if the knowledge workers start to go away, as far as importance, is gonna be a rebalancing of the status between blue collar and white collar. Now, we've always in this country had kind of these two classes.

And I don't know who actually started it or where the movement came from, or who coined the phrase blue collar or white collar. I'm not even sure why it's blue collar. I don't see many folks wearing blue shirts out there, but nevertheless, what's an issue is you had people who with college educations looking down on people who didn't and felt superior to them because they had gotten to college and others had not, and therefore, the folks who hadn't gotten to college were relegated to roles which are more things you do with your hands, while those who went to college, they attained the status of being the knowledge worker. And before we had Google and before we had computers, being a knowledge worker was a valuable skill because we needed that kind of stuff in society. We need people who could think and write well and all that type of thing, but it has always seemed that the white collar felt superior to blue collar. But if you start killing off the money, the occupations of those white color knowledge workers, suddenly things change.

Now suddenly the blue collar is elevated in status and the white color is reduced, if not ultimately eliminated. Next, you're gonna have a gradual reduction of pursuits by people who were in the knowledge worker class as opposed to the what it is more working with your hands class, and that may mean certain things that people like. I don't know how esoteric it might be, Opera, the Symphony, who knows, but we're gonna see a change basically in recreational activities because the true money will now be behind people who are more of the blue collar than the white collar. And you're certainly gonna see a complete destruction of the office space industry. You clearly don't need office space at all if your knowledge workers are computers, you only need places to put the computers, but those places you can do much more inexpensively, you don't need to have really nice views or a little cafe to eat at or be in any kind of area that has a cultural charm to it.

So you're gonna see a big collapse of office buildings, and then you're also going to see just a completely rebut of luxury items. You'll probably see more things that folks think of more as a blue collar or working with your hands interests, maybe boating, for example. And then you'll see people who then move away from what were traditionally more knowledge worker interests. But what's the impact on Mobile Home Parks going to be from this concept that basically knowledge workers, their status will be reduced and those who work with their hands will be elevated. Well, the first one obviously is that if you're going to have a complete change in the way we think of the blue collar worker, the person who works with their hands. So, you're going to have a complete change in status and let's be honest, mobile home parks pretty much revolve around people who work with their hands.

So whether it's working in a restaurant or working in transportation, most mobile home park residents, and I'm not talking the group that's retired, but the group that still is employed, they are for the most part found concentrated in industries that will actually flourish in the decline of the knowledge worker, because they're not in the knowledge business. Their main capital is not thinking, it's doing, and that's going to do a huge improvement for the mobile home park industry, just in terms of respectability. So people no longer look down their nose at plumbers or people who change tires, but actually they want to do that kind of a role because that will still be strong demand and well paying. Then it will elevate this whole concept of blue collar businesses, which mobile home parks have always fallen into that niche. And mobile home parks which have suffered for decades under all kinds of labels like trailer trash, all kinds of important names like that, those should help go away.

That may very well help our industry stigma against trailer parks by having people who live in mobile home park suddenly be more respectable. Also, you're gonna have some fall out on certain types of things that Mobile Home Parks are related to. One is, I think you'll probably see a reduction in the attraction to college towns, because if people don't make any money, if knowledge workers can't find work and if they can it doesn't pay anything, then people won't wanna go to your standard college. They will wanna go to trade schools or ways to have a career path, which is not based on simply trying to sell off their thinking. You'll also see a reduction of value of urban areas because most people collect together the knowledge workers today to be close to each other, to go to office, to bounce around ideas, which you won't need anymore because those jobs won't exist. So that's not going to have probably too big an impact on mobile home park, 'cause there are not that many in urban areas.

But we're kinda already seeing that transition away from urban areas into suburbs and exurbs, I really just see that more kind of accelerating. Also, you'll see mobile home parks gain in stature with lenders because we're already a lender favorite. We have probably the most stable revenues of any industry, and we have probably the lowest loan default ratio as well. So I think you'll see that even accelerate. I think lenders will be even more excited making loans outside of the knowledge sector, which will be in deep trouble and will instead really appreciate our blue collar roots in the mobile home park industry. And then finally, you're gonna see an even greater demand, of course, for affordable housing, because all of those knowledge workers who would never see themselves as a potential mobile home park resident may soon find in the reduction of jobs and the reduction of pay, and as they enter maybe more into industries where you use your hands, they will be out here looking for less expensive places to live.

The average house in the US right now is over $400,000. And if you look at who's buying those, those are probably almost all knowledge workers. And in the absence of those knowledge worker positions, you're going to see a fundamental shift as far as the demand for affordable houses housing, which will only grow the occupancy and the rents even higher in mobile home parks. The bottom line is that if we lose the knowledge workers, we're probably going to lose the entire American middle class. So when you look at all the industries out there, all the different investment options, then you may well say, "Gosh, I don't think I should be involved in that." And if you are a knowledge worker, it's probably a good time to diversify out and start looking at owning things like mobile home parks, which are then attached to the growth, the mega trend that everyone will wanna be connected with. This is Frank Rolfe, Mobile Home Park Mastery Podcast. I hope you enjoyed this. Talk to you again soon.