Saturday, May 29, 2010

Post-industrial employment: adjusting to a new world

Six years ago I wrote a review of Robert Reich's book Reason. Reason was a reaction to the GOP's loony rule, but Reich was also very concerned about the fate of the middle class. He was worried that only knowledge workers were going to have work. His answer was better education.

I disagreed. I thought knowledge workers were very much at risk in a "winner take all" world, and I was skeptical that education was really a universal solution (emphases added now)...
... Reich is persisting in the 19th century belief that humans are fundamentally malleable -- at least when young.
Most of the research of the past 10-20 years points to a more complex picture...
... the evidence is strong that humans are not endlessly malleable. This is an increasing problem, because 21st century America rewards a fairly narrow range of workers. In the new-world, many of the old-middle class may not have a happy home -- no matter how hard they retrain. In a fundamental way, many Americans may be "disabled" for the modern workplace.
Reich should not be so quick to write-off redistributive solutions. We will need some creative thinking to produce a healthy American when the true "disability" rate starts to top 30%.
I think the world is coming around to my perspective. For example (undated articles are recent):
I hope you've taken the time to scan at least a few of the above (esp. Rampell, Steinberg and the discussion of Baumol's Disease). Taken together they reflect a consensus that's emerged over the past six years. I'd summarize it this way:
  1. College has become insanely expensive. (The College Industry will be the next bubble to burst.)
  2. There's a growing disconnect between the costs of college and the value delivered.
  3. Many students would be better served by skills ("vocational") training rather than traditional scholarship.
  4. Technology and globalization have eliminated large numbers of office jobs and made some old skills obsolete. Many of the middle-aged middle-class people who lost their jobs in the Great Recession won't work again.
  5. In an age of outsourcing, knowledge work may be no more secure than factory work.
Ok, so the last isn't part of the consensus ... yet. It's still mostly a suspicion of mine.

So if we really are entering a world where many formerly middle-class adults won't be able to find stable employment, simply because they lack the skills for the jobs that do exist, what should we do?

College is probably not the answer. In 2007 and 2004 I suggested:
  • universal health care (astoundingly, this might happen!)
  • separate benefits from employment
  • intelligent retraining programs - based on individual skills assessments and locally available employment
  • As part of social security reform, eliminate the idea of age-specific retirement. Income has mandatory contributions to tax-deferred funds and non-work (study, vacation, job seeking, whatever) draws from those funds*.
  • rethink the meaning of disability in a post-industrial society
The last will be the hardest, but I think we'll get to all of these in time. Civilization is stronger than we think. One way or another, we'll figure this one out - including finding a future for those who don't seem to have a place in the modern economy.

* I first proposed something like this in a 1977 Women's Studies course essay. I just remembered that ...

Update 6/2/10: Robert Reich on "Entrepreneur or Employed". Excellent summary. The modern 50+ knowledge worker is not "unemployed" s/he is "self-employed". S/he is a masterless, "Ronin" contract worker. Reich's recommendations are very close to what I wrote above. There's one in particular I like: "... Since they can no longer depend on tax-free corporate matches to their 401(k)’s or I.R.A.’s, they should be entitled to tax credits that match them". This is one measure Obama might be able to squeak by the GOP loons in Congress.

1 comment:

Curmudgeon said...

The underlying problem for wage labor is that the people with money (and thus power) have decided that wages are an expense to be minimized at all costs and that the social consequences of destroying the middle class are irrelevant.

Nothing forced western elites to subject their populations to wage competition with Chinese peasant workers. Nothing forced American elites to subject American workers in non-tradable sectors to compete with H1B and illegal labor.

Proposing technical fixes to work around the end of paid employment for most of the population is pointless unless the elite can be convinced that [b]restoring[/b] the middle class is important.

Solutions are easy if the elite is dominated by people like Henry Ford. There are no solutions if the elite is dominated by people like Lloyd "God's Work" Blankfein or Tony "it's only a small blowout" Hayward. Quite frankly, this is a battle we've already lost.