GORDON REPORT
March 2015
This issue of the Gordon Report has a two-part format that I
intend to use periodically. Part I: You Can't Click for Brains -- will
provide my viewpoints on the interplay of culture and technology in today's
world; Part II: Workforce Perspectives -- will analyze current labor market
data, issues, and solutions.
PART I. YOU CAN'T CLICK FOR BRAINS: TECHNOLOGY AND OUR
CULTURE
Inside my Flash Gordon Time Machine, I took a journey back
to the 1950s. Upon arrival I was invited to address a large group eager to
learn about life in the 21st century.
The iPhone I had brought with me captivated this audience.
Here I told them was a device that was a portal to all of the past and present
knowledge of world civilization. Though I admitted most people seemed to use it
for more mundane tasks -- buying things, playing games, reading the latest
conspiracy theories, sending each other short cryptic messages and photos of
themselves, called selfies, or engaging in endless opinionated discussions with
total strangers on just about everything.
With all this personal access to instant information, people
had become less patient. This infatuation with speed and the "power of
now" had shortened attention spans. Google's top ten instant answers had
replaced more in-depth information exploration. The focus on today dominated
life and stifled people's interest in planning their own futures.
With instantaneous communication, crisis headlines dominated
the news. But the historical background providing context for interpreting these
events was almost entirely ignored. No one had the time. Quick, silver-bullet
solutions were demanded. Few people had the time or even had the desire to
develop their mental capacities for analytical reasoning and problem solving.
The super-abundant access to on-line data through more and
more powerful devices had transformed the bulk of Americans into glib
know-it-alls. Each person's opinion was considered equally valid. Opinion was
thought to be the same as knowledge. Expertise gained from in-depth study of a
field of knowledge was not widely esteemed. Public opinion became increasingly
polarized. Pundits espousing a wide variety of ideologies who offered emotional
responses and instant solutions to complex problems gained avid followers.
Because people carried devices everywhere that enabled them
to be in constant contact with others and to obtain instant answers on the
Internet, people were perpetually being distracted and felt little incentive to
devote the time and effort to developing critical thinking and memory skills.
My story of life in the 21st century frightened this '50s
audience. While they marveled at how the the spread of computer technology had
interconnected and transformed the world, they were shocked that it had such
negative effects on important aspects of learning and knowledge. They agreed
with me, "You can't click for brains!"
PART II. WORKFORCE ANALYSIS: A NEW JOBS "DEAL"
In February 2015, the United States recorded its longest
streak of monthly job gains above the 200,000 level since 2008. Also 60
straight months of private job growth set a new record.
The unemployment rate fell to 5.5 percent with over 295,000
jobs added. However, the rate actually fell because more people left the
workforce than got jobs. The proportion of people in the U.S. labor market,
i.e., the labor participation rate, is still near a 36-year low.
The number of U.S. adults who are classified by the U.S.
Department of Labor as "Not in the Workforce" has risen to
93,680,000. Of this total, about 50 million people over age 55 have retired.
Another 6.5 million periodically look for a job. However, over 37 million
workers have given up looking. What are they doing? Some of these people are on
medical disability. Others are raising children or are in school. But a sizable
number have lost their jobs due to automation and need additional
training/education to secure a new one. They either can't find a company that
will train them, lack the funds to get additional education, or in some cases,
refuse to go back to the classroom in order to get a new job.
Over the past 25 years profound socioeconomic changes to the
U.S. labor market have dramatically altered the workforce equation producing a
new jobs "DEAL" with four moving parts:
1st: Demographics -- 79 million Baby Boomers need to be
replaced. Many held technical jobs in STEM areas that are now vacant.
2nd: Education -- jobs require more education and career
skills than ever before. This includes both students and workers. A knowledge
economy requires life-long learning.
3rd: Automation -- its spread has eliminated most low-skill
and many middle-skill jobs. The digital workplace requires people to develop
stronger thinking and problem-solving abilities.
4th: Longevity -- people are living longer. Actuarial
projections estimate that on average an American 65-year-old man will live to
86.6 years and the average woman to 88.8
years. More retirees want to keep on working beyond age 65. As they
retire, their knowledge will be difficult to replace.
We project that the U.S. unemployment picture will not
change substantially until all of these socioeconomic issues are seriously
addressed nationwide. The unemployment rate will keep falling, but for the
wrong reasons as more people continue to leave the workforce because they do
not have the skills employers are seeking.
America's biggest cultural challenge is to adapt the
job/career and educational expectations of students, parents, workers,
businesses, educators, and politicians to this new labor-market era. We all
need to embrace this new jobs DEAL. Longevity is increasing the potential
number of years of workforce participation, but also heightening the importance
of continuous training and life-long learning. Lower-skilled relatively good
paying middle-class jobs are disappearing. They are being rapidly replaced by
new higher-skilled and often higher-paying jobs and careers. This process began
in the 1970s with the introduction of the personal computer that has led to the
spread of digital technologies to every business sector and almost every
occupation.
Can the United States carry out the massive socioeconomic
changes needed to fully utilize the potential of digital technologies to raise
productivity and increase economic growth? We should not forget that about 100
years ago, between 1890 and 1920, the United States was the first nation in the
history of civilization to pioneer a universal education-to-employment system.
This revolution was triggered by the introduction of the new advanced
technologies of that day: electricity, assembly lines, automobiles,
tractors, radios, household appliances, etc.
To make these transitions to a radically different
labor-market era, American needed to better educate and train its children,
workers, and a massive tidal wave of immigrants. Cities experienced rapid
growth as farming was mechanized. For the first time, most women went to high
school. Children were taken out of factories and farms and sent to schools.
Businesses and families were taxed to support education for everyone.
It was not a perfect system, and it was strengthened over
the next decades by the GI Bill, vocational/technical education programs, and
much more. There is little doubt that it was a decisive factor in making the
20th century the "American Century." We need to do it again!
Adjustments to fiscal and monetary policies will not solve
the broader societal issues behind the current employment crisis or reverse the
increasingly felt economic stagnation of the American middle class. Media
attention has been focused on when the Federal Reserve will increase interest
rates, swings in the strength of the U.S. dollar relative to other currencies,
and proposals to lower U.S. corporate taxes. Such moves by themselves are becoming
more and more of an economic shell-game, a redistribution of diminishing
monetary resources to different segments of the U.S. population.
We instead need to reignite significant economic growth by
taking the structural and systemic actions that will bridge the job-skills gap
of this new labor-market era. Regional public-private partnership networks have
begun this process. We need to support and speed up these efforts to reinvent
local education-to-employment systems.
We are now in a new labor-market era and face a new jobs
DEAL. Four factors - demographics, education, automation, and longevity - are
significantly altering the U.S. employment equation. Every community in America
needs to take action to confront the challenges posed by these changes.
Edward E. Gordon is president of Imperial Consulting
Corporation (www.imperialcorp.com).
His latest book is Future Jobs: Solving the Unemployment and Skills Crisis (Praeger,
2013).
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