03 Feb Are We Ready for the Future?
There was a very intriguing cover article on the future of jobs in the January 18th edition of The Economist. Here’s the breakdown, in case you haven’t seen it: Rapid technological advancements will radically transform the future of jobs in a way not seen since the Industrial Revolution, or possibly at a pace never actually seen before. Automation holds the potential to make many of today’s middle-skill jobs obsolete, and may negatively impact some higher skilled jobs as well. This reality is all but inevitable; what we don’t know is exactly how long it will take for society to act on these technological advances to transform the jobs landscape.
While we are certain to see major shift in middle- and high-wage jobs due to technological change, the real impact of this transformation on actual employment, wages, and inequality is much murkier. The article posits that advanced countries like the U.S. will go in one of two directions. The more doomsday scenario is that advancing technologies will result in a long-term high unemployment trend and dramatic rise in inequality as more middle-skills jobs become automated. They cite an interesting recent study that finds that jobs are at a significant risk of being automated in a whopping 47% of traditional occupational categories over the next 20 years, including a number of white-collar jobs. The result is a defined bifurcation in the workforce and a significant shrinkage of the middle class.
The other scenario (which the article feels is more likely) is rosier, but not without a bunch of speed bumps in the road. In short, the exponential growth in technology will force individuals into more specialized types of work where those whose skills complement machines or focus on emotive occupations will be more successful. Productivity rises and, like in Britain halfway through the Industrial Revolution, average real wages dramatically increase. This change “squeezes some incomes in the short term before making everyone richer in the long term,” as long as individuals and public policy adjust as rapidly as the technological advancements.
So how do we ensure that the second scenario becomes the reality, ideally with less pain in the short term, before the metaphorical rising tide lifts all boats? This is the question that Hope Street Group is seeking to answer. Hope Street Group has worked over the past year with more than 50 leaders from diverse sectors—including large and small employers, training and post-secondary education institutions, civic and youth organizations, labor unions, philanthropic foundations, technology entrepreneurs, and experienced policymakers—to define a strategy for overcoming current labor force challenges and build a solid bridge into the future. Our goal is to foster a high-growth economy by moving the U.S. to an environment that supports all Americans in building skills of economic value throughout their lifetimes.
And how do we intend to do this? Our Bipartisan Working Group has helped us define five core elements of a national skills strategy, the key actions required to make progress on each dimension, and a map of the leading reform organizations and practitioners within each area (fig.1). Our next phase is to convene a Steering Committee of influential experts that will use this framework as a jumping off point for our goal of developing a national strategy for building this competitive, skilled workforce.
What is especially encouraging is that the push to improve the skills of the broader workforce has bubbled up as a prime goal of policy agendas of both the White House and the House GOP. Yet we know how well the political parties play together these days, so bridging the political divide is essential. Hope Street Group’s unique bipartisan approach combined with our ability to bring the best ideas to the table by tapping into our diverse network can be that bridge. And now is the time to seek and get behind a holistic solution to drive systemic reform if we are to prevent the decay of the middle-class and a calcification of inequality in the U.S.
Of course the two scenarios presented in the article are predictions of what the future of jobs may be, and as we know, many predictions fail. But we ignore the fact that technological change will alter the jobs landscape at our peril—this is not in doubt. And the longer we don’t act on making major structural reforms, the smaller the opportunity to adjust to these changes before we find ourselves having to dig out of a potential economic mess that we should’ve seen coming.