Tech and Trump: Making America Work Again

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How to add 10 Million Jobs by the year 2025 and avoid the automation crisis

Whether one believes robots will take our jobs and then murder us or free human beings from ever having to work again, the implications on the job market are clear: expansion of automation threatens jobs in transportation, manufacturing, and retail (among others) that could shock the job market. Researchers’ estimates on the scale of threatened jobs over the next two decades range from 9 to 47 percent. Despite negative views of current labor market trends and grim forecasts for the future with automation, there is hope for a reversal of fortunes in this collapsing market, and technology companies have a role to play.

Despite low U6 [Unemployed/Labor Force], U4 [(Unemployed+Discourage)/ (Labor Force+DIscouraged)] and participation rate paint a grim picture of labor market conditions. If our nation’s participation rate today were back up to its start-of-the-century highs, well over 10 million more Americans would be working. For every one American man aged 25 to 55 looking for work, there are three who have dropped out of the labor force. The implications of automation advances across many industries will surely worsen this already grim scenario, unless someone steps up. But who?

First, consider the employment situation in many of the largest industries in America and the threat automation poses to each.

Manufacturing: A huge focus during the presidential campaign and a central promise of the Trump Administration, restoring manufacturing jobs, which have decreased by a third since 1980, seems impossible given current trends, increasing automation, and an inability to realistically reverse trade policy in a way that could bring jobs back. Productivity in the sector has skyrocketed, though labor has not adjusted accordingly, indicating a talent gap. According to a 2015 survey by Deloitte, 82% of manufacturing executives expect that they will be unable to hire enough people to fill jobs in manufacturing. It is possible however, that a complete rethinking of how we train workers to fill these new, higher productivity jobs can save us (more on this later).

Retail: The growth of the retail sector following the Great Recession indicates a glimmer of hope in the overall labor market. Low rates, high consumer confidence, and discounting have all contributed to job growth in the sector.

But a bad tide is on the horizon. A ‘Border Adjustment Tax’ promises to challenge many retailers who will pass the costs of the tariff onto customers. Improving on the still shaky experience of using a self check out machine, Amazon has launched their completely automated grocery store that threatens to eliminate most retail jobs forever if taken to its natural conclusion of universal availability. If robots can stock the shelves and computes check you out, little remains for human laborers besides mopping up spills.

Transportation: Consider the following two maps, which show the most common job in every state of America in 2014 and the 2016 Electoral Map.

Most Common Job in America, 2014 vs Electoral College Map (Source)

Now think about the economic and political implications of every single one of those Truck Driver jobs becoming automated over the coming years as self driving cars and trucks become commonplace. Trump has to answer to these states as they form his electoral majority. But, how can we possibly address the large numbers of unemployed drivers in the same states that elected a populist fanatic to the White House and recalibrate them for the workforce?

Overall: If these trends continue without the combination of government and private sector intervention, the outcomes could be disastrous. Consider that in the last three decades, labor's share of output has shrunk globally from 64% to 59%. In America Labor’s share of GDP has also plummeted. Similar patterns in the Industrial Revolution gave way to populism, communism, fascism, and led to multiple wars in Europe. This problem can not be ignored.

Labor share in the US (1948–2016) (BLS and BEA)

A Labor Market Cure

As grim as current circumstance may be, a solution does exist within our reach. Jobs that require simply programming, electrical engineering, and robotics skills are well paying, middle skill jobs that will account for half of all new jobs created in the United States between 2012 and 2014 according to Katherine S. Newman and Hella Winston In Reskilling America:Learning to Labor in the Twenty-first Century (Metropolitain Books, 2016). Yet many of these jobs will go unfilled due to lack of qualified candidates. Up to 25% of these jobs in New York state will remain empty.

So we know where the jobs will be (and where they won’t be). But, how can we take potentially millions of displaced workers along with the more than 10% of youths 16 to 24 who remain unemployed and train them for these meaningful jobs?

The proposal I will present will require cooperation from federal and local governments as well as from tech giants and private sector companies who can take on this challenge.

The answer comes to us from Germany, Switzerland, and the other countries who did not give up on vocational education as the US did following the limited results of the 1994 School-to-Work Opportunities Act designed by Bob Reich and the Clinton Administration. The Clinton Vocational Ed push failed as the internships were never treated as serious jobs, say Newman and Winston, and thus the program failed to improve the labor outcomes of participants. Bush would go on to cut funding for vocational ed citing a lack of evidence in improved labor market outcomes, thus ending Republican support for the programs.

Creating a successful vocational education program will require the full cooperation of federal and state governments to provide tax credits and incentives for businesses to participate, but it will also require buy in from the private sector and, in particular, large technology companies who can take the same thinking that allows them to produce the best tech workers on earth, and develop a tech workforce of displaced laborers and unemployed youth that can fill technical roles in the very industries they were displaced from.

What would such a program look like?

The infrastructure required to educate the next generation of american laborers primarily consists of a curriculum and a structure. could come from pre-existing curriculum that tech companies already have, tailored to the skills of the that could be developed in partnership with potential local employers. Te result would be a large tech-manufacturing-public sector partnership that utilizes existing American educational resources.

Community colleges, long ignored as a central piece of the American education infrastructure, could provide a perfect location for technical training, if accompanied by cooperation from the private sector, who has the specialized skills and the experience. While this would require increased investment in our community college infrastructure, a prospect conservatives have historically balked at, with private sector encouragement and investment, these partnerships can be mutually beneficial.

At Springfield Technical Community College in Massachussets, the college hired staffers from manufacturing firms to teach students to use the computer based manufacturing tools they had at their disposals. Forming these partnerships in Trump states, such as West Virginia where youth employment sits at 17.4%, could be politically desirable to both parties and could spur bipartisan cooperation in investing in vocational ed.

The higher paying jobs students get after graduating lead to a larger tax base, lower rates of SSI reliance, and improved economic outcomes across the country that would justify the investment.

Presenting the Solution

Selling such a solution to an administration dead-set on a return to the labor market of the 50s is a challenge when many Americans have not yet accepted that the jobs and skills of the 1950s are gone and will never return. As automation moves in, Americans will gradually accept their fate and seek out technical education or turn on Capitalism and the very foundations of American democracy.

Such a dire outcome is preventable however with the immediate start of training programs to create the next generation of great american workers. Technology and manufacturing giants have the ear of Mr. Trump. Hungry for tax credits, they can promise job training in return for tax cuts and prevent more regrettable policy measures to bring jobs back such as tariffs and fines.

Companies pushing for the border adjustment like GE and pharma can find common ground with those advocating against the adjustment, like Walmart, if a policy of workforce investment comes along with corporate tax credits. If the border adjustment tax does pass, advocates of vocational ed should persevere as the ability to continue to manufacturing goods in the US will mean larger tax credits if exports can be written off.

Only with the encouragement and investment of Technology companies, can Trump’s administration be shown the light of investing in our nation’s community colleges through Public-Private Partnerships. Tech companies understand the challenge of a border adjustment tax on their bottom lines but can also lead innovation into improving job training that could sap political energy from the tariff or provide additional tax savings.

Technology companies should stand up to Trump when necessary, but pushing for a successful jobs century in tech can help to prevent being the subject of a twitter attack and work to build bridges with the administration.

Imagine if instead of just talking about bringing a factory back to this country and adding 1,000 jobs, manufacturers could brag about a program to educate youths and discouraged workers and bring back 100,000 jobs. The implications within communities of seeing the private sector invest in jobs can help turn around this grim labor century and save the americans who have been left behind.

Tapping into the knowledge of the private sector, utilizing the incentivizing power of the Federal Government, and investing in American Community Colleges is how together we can add10 Million Jobs by the year 2020 and truly make america great again.

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