The Great Restructuring and Jobs Between Education
While it may not be Thomas Paine’s Common Sense, here is some common sense on what it will take to resolve the jobs and economic recovery issues of the 21st century.
Jobs, jobs, jobs are all we are talking about these days. They are the signs of the times and our social, economic, and political dysfunction. We have seen this coming for a long time. More and more of us are out of work and the number is increasing. According to an article titled The Slow Disappearance of the American Working Man in Bloomberg (August 29, 2011) the number of jobs for men between the ages of 25 and 54 has fallen from 95% in 1969 to 81% in 2011, the lowest since WWII. Our “only” solution seems to be creating more jobs in the public sector where, according to Stephen Moore from the Wall Street Journal, there are many more “takers” than “makers.” Most recently, there is The Robot Economy, David Von Drehle’s reality check in Time (September 9, 2013) about robots, automation, and the loss of jobs.
Economist Paul Krugman makes a similar observation that in the age of globalization it used to be only manufacturing fell in this category, but now, with better computers and telecommunications, there as an across the board disappearance of medium wage jobs ranging from legal research to chip design, leaving only very highly skilled or hands-on menial work – jobs that can’t be accomplished by following explicit rules. While Krugman correctly points out that our current approach of putting more kids through college is “wishful thinking”, his solution of restoring union bargaining power misses the very point he just made — jobs as we know them are just not there in the first place.
The Problem is Productivity
Several years ago a U.S. Congressman inserted the Law-of-Stuff into one of his speeches. It went something like this… With increased productivity through automation a single person can now “make” all of the toasters, or DVD players, or other stuff. The other workers are no longer needed, so there are fewer jobs, and, consequently, less money for buying that stuff. We eventually self-destruct. Goeff Colvin in his opinion page (Fortune, Sept 26, 2001) explains this by pointing out that while the value of what we build increases every year our problem is that “what we did is built with fewer workers…” Even today, as our manufacturing productivity continues to grow and we bring more of it back to our shores, the number of those employed in that sector is still declining. So, the solution is not more jobs, at least not jobs for job’s sake. Milton Friedman, the economist, put it this way when visiting a huge project somewhere in Asia that involved thousands of workers using shovels to build a canal. He asked why there weren’t any mechanized excavators. A governmental official explained that using shovels created more jobs. Friedman’s response; “Then why not use spoons instead of shovels?”
Doing more with less is what economic growth is all about, not the other way around. Dark factories where one worker oversees 100 machines, farms where a few workers oversee the laying of 240 million eggs a year is the real world that is here to stay. Author and former hedge fund manager Andy Kessler in an op-ed in the WSJ (February 17, 2011) asks the question “is your job an endangered species?” His answer is that “like it or not we are at the beginning of a decades-long trend” because “technology is eating jobs – and not just obvious ones like toll takers and phone operators. Lawyers and doctors are at risk as well.” Thomas Friedman’s commentary on the Arab Spring and how young people are looking for a future state in his syndicated August 23, 2011 editorial states that “…technology and globalization are eliminating more and more “routine” work – the sort of work that once sustained a lot of the middle class.”
The Social Impact
Full employment, as we know it, is becoming a thing of the past. There are no longer jobs for teens. Family farming no longer exists. The decline in job opportunities for college graduates can no longer justify the student loans that have now become our greatest personal debt. Unemployment, at a minimum, is stagnating only because more of us are leaving the work force. And this is just the economic side of the dilemma. How much longer can our self-esteem, which is measured by our having a job, remain intact? The social aspects such as the decline of the middle class, the slipping of the underclass toward a caste system of the unemployed and unemployable, and the increase in intercity crime are just a few of the signs that if we don’t do something, the eventual result will be chaos and anarchy. This is not hyperbole.
A recent article about the contrast between struggling Bridgeport and affluent Greenwich Connecticut (Bloomberg BusinessWeek July 15, 2012) unearths a number of social issues that are so alarming that we are “beginning to resemble a banana republic.” We are well on our way to creating both a service economy and a servant economy, the difference being that it is much more difficult to escape the latter. A recent editorial in the St. Louis Post Dispatch (June 10, 2012) points out that since we have historically distributed wealth through jobs, the specter of a process that produces prosperity without jobs creates an even greater problem — the frustration that comes from not knowing if one will be able to enter the middle class.
The Law of Supply and Demand
If we have too much supply (unemployment) and not enough demand (jobs), the preferred solution is (to state the obvious) to create more jobs. However, there are certain “realities” that work against this solution. For example, we could create more jobs by lowering the retirement age, but this would be offset by the increase in retirement funding. Then there is the decline in the birth rate needed to support our aging population. Yet, if there are not enough jobs in the first place and the majority of newborns are in the undereducated, underperforming segments of our society, wouldn’t this just add to the problem?
Although there is no easy answer, there are several ways to balance the supply and demand equation, singly or in combination, that need more thought.
Governmental: Stimulus programs and increased federal, state and local government employment would increase the demand side of the equation, but while putting more money into the economy, the taxes need to support the increase would more than offset any gains. We have only to look at California, Greece and Europe’s 21% sales tax and high income tax to see how well that would work.
Welfare: Reduce the supply (and balance the equation) by transferring funds from those who have jobs to those who do not in an era of already declining jobs will only escalate the problem.
Workfare: Require recipients to earn a portion of their welfare check through community service or make work jobs make more sense. Workfare has been successfully implemented in several states (Wisconsin comes to mind).
Educationfare: Make education a required part of any and every program. To collect welfare, you have to attend GED and life-skills education. To collect Educationfare, you have to participate in job training programs (Georgia has such a program).
Entrepreneurship: Support the creation of small business through grants, bureaucratic simplification, and tax incentives. As the pundits proclaim, if every small business hired just one person, we would not have a jobs problem.
The Solution: Jobs Between Education
The World has changed. Instead of the 30 year career with the same employer, workers today will have 5-8 different jobs with different employers during their working years. Skill categories and levels are constantly changing and at an accelerating rate forcing us to get more training and continuing education between each opportunity. A 2011 study in St. Louis on the inability of local companies to find workers with the skills they need for the 74,000+ openings posted in a four month period concluded that “talent must be continuously developed and refined and refreshed throughout a person’s career.”
Automation, computers, etc., are replacing a lot of unskilled jobs, but at the same time creating more jobs for the well trained. We can’t turn back the clock. We must compete in a global economy where job skill requirements are changing at an ever increasing rate.Education, therefore, has to be part of the solution. But, this time we have to reverse the paradigm. Instead of education between jobs, we will have to accept jobs between education as the new way of life.
We can no longer be measured by what we do, but what we know. Our “job” will be to learn, learn, learn. We will have to get smarter, a whole lot smarter, if we are going to survive. It will take millions of educated minds working together on how to deal with our “shrinking” and environmentally fragile planet, as well solve the coming increase in socioeconomic problems.
We are not just talking education in an academic sense. True, we do need to create new jobs, innovative jobs that we have yet to imagine. But it will take more than just jobs to solve this dilemma. It will take a renaissance in the way we think about life. We have to develop a greater appreciation of the importance of learning not just the what but also the why, so we can acquire the wisdom needed to carry us into the future.
We have lost our common sense and the ability to think critically. Our self esteem and self respect is also in danger as they are what motivate us as humans. While jobs fill that role today, it is education that will have to do the heavy lifting in the future. While science and technology are allowing us to live longer, the unintended consequence is that those longer lives are becoming less satisfying socially, emotionally, and economically in the process.
The Great Restructuring
It is said that we lose half of our eyesight before we know we need glasses. This is because we make adjustments and accommodations until we have to face the truth and see an eye doctor. Such is the case also with jobs and the economy. It took decades to get where we are and it may take at least that long to claw back. But we have to acknowledge the problem, first, if we are going to change direction.
A vibrant society can only be sustained by an educated populous where we all work on fixing problems. History tells us that governments, dictator or democratic, academic, scientific or financial oligarchies, whatever…are usually part of the problem and not the solution. Governments are not wiser and government projects are rarely the answer. The Great Depression of the 1930’s proved that once the projects were completed, the economy returned to its former state.
We know we are in trouble, yet we continue to only treat the symptoms and not the cause. While there are no easy answers, we could at least be dealing with the problem. In the words of Jeff Jarvis (Buzz Machine, March 7, 2009) “…we’re living through is instead a great restructuring of the economy and society, starting with a fundamental change in our relationships – how we are linked and intertwined and how we act, nothing less than that.”
The global dynamic is changing and is continuing to do so at an ever increasing pace. We have to rethink a new way to work in order to live. We have to restructure in order to survive.