PARDON THE DISRUPTION - CHAPTER FIFTEEN

in #technology3 years ago

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THE NEW WORK ERA

a. Jobs vs. Work

The U.S. economy has lost millions of jobs in the recent recession, more than eight million since July 2007. The social and economic repercussions of such a huge exodus from the workforce – and the associated losses of income – are enormous. A central goal of the government’s stimulus plan was to create, or at least retain, jobs. The government uses a mathematical formula for calculating the impact of stimulus money, equating a certain amount of spending with a certain number of jobs “created.” By their logic and calculations, to spend enough money means that the unemployment crisis will be averted. Depending on what figure is used for total stimulus spending, the solution to the unemployment crisis could be just around the corner.

But let’s look inside what’s happening here and see if we’re getting what we’ve bargained for. First, let’s clarify what we mean by the word “job.” Seems simple enough, doesn’t it? Work. For an employer. For pay and benefits. But let’s go a little further.

When we hear the word “job,” we tend to think of working for a company or organization that pays us a wage for something like 40 hours of work per week. Often, this arrangement includes health and other benefits, and there are some associated workplace rights and responsibilities. Many of us consider this type of work arrangement be long-term, even permanent – in short, a “career.” When we hear the President or other elected officials speak of “creating jobs,” we tend to assume that what they truly mean is that they want to create permanent, full-time, long-term jobs for their constituents. That is a very worthwhile goal.

But there are nuanced differences between the terms “job,” “work,” and career,” even though we tend to think of them as synonyms. There are tremendous differences in what they really mean.

Jesus Didn’t Have a Job
There. Got your attention? Good. No, in fact, Jesus didn’t have a job. Nor did his disciples. “Of course they did,” you might respond. “Jesus was a carpenter. Simon Peter was a fisherman. They all worked.”

AHA! That’s the difference. They all worked – fishing, building, farming, or one of any number of worthwhile pursuits – but they didn’t have “jobs.” Most were self-employed or unofficial contract-for-hire workers. It wasn’t until the onset of the Industrial Revolution that workers left the farms en masse and became “employees” with “jobs” at industrial sites such as factories. The “job” has tended to serve humanity well over the last 150-200 years. It has generally provided a steady household income to millions of workers, and has tempered wild swings in the variability of a life based on farming and pre-industrial labor, while simultaneously serving industry well by providing a reliable and committed workforce. Still, it is a recent development. It fits into an economic cycle. And like anything that is cyclical, it’s subject to change. That is the trend we have been following and those trend developments will have nearly as great an impact on members of the workforce as economic conditions themselves.

Daniel Pink, in his seminal book Free Agent Nation, asserts that there has been a massive voluntary migration from the corporate world to that of the self-employed, contract laborer. Now companies are returning the favor by replacing the productivity previously provided by employees with contract workers and technology.

Heard about the prospect of a “jobless recovery” in the economy? If the economy is truly recovering, as it very well may be, the number of jobs that have accompanied the recovery have been nowhere near commensurate with the level of increase in economic activity. It may be “jobless” for more reasons than the obvious. (And because of the rally in the stock market over the last year (which has nearly doubled since Obama’s first inauguration), there is grand talk that the U.S. economic recovery is nearly complete.) As many out-of-work Americans have confirmed over the last four years, looking for a “job” in this new, different economy may prove one of the least fruitful exercises a person can undergo. A new paradigm brings a new way of thinking – bringing about an entirely different way of fitting into the workplace. The consequences for education, wages, and the entire structure of business are enormous. Those concepts need to be on the table in front of all our government and business organizations if we are to effectively deal with these issues.

Companies that have made it through the Great Recession are more attuned than ever to what threatens their business. They can’t always control sales and revenue, but they can do their best to control costs. In the future, workplace productivity will be watched more closely than ever. Companies have seen their bloated payrolls shrink to the bottom line. To avoid a repeat performance, they will be very reluctant to hire any people beyond those necessary to produce. Put another way, companies will be reluctant to create jobs. I can't emphasize that enough. Companies will be reluctant to create jobs.

The reason is that companies procure productivity tools to provide output when there is demand for it (sales, inventory, etc.). Technology, design improvements, and shifts in behavior often reduce demand for human labor.

Companies have figured out that (depending on the task) their hierarchy of productivity tools looks something like this:
• Additional hours from current staff
• Temporary Labor
• Technology
• Contract Labor
• (And finally) Permanent Hire

Why is that?

Because people (also known as: employees!) have their health care costs rise 20% per year, ask for raises, threaten to unionize or go on strike, fuss over parking spaces, have workplace rights that keep them from being dismissed, wear too much perfume, annoyingly smack their gum, commit sexual harassment, and then quit when times get better.

There is one expected irony in a poor job market: the claim that there are plenty of jobs out there, but that job seekers don’t have the right:

• Knowledge or degree
• Work habits or “ability to work as a member of a team”
• Place of residence

MoneyNews reported in August 2012 that the Federal Reserve believes there is a true divergence between employers and the labor market: “About one-third, or 1.5 percentage points, of the jump in unemployment from 5 percent as the economic slump began to its 10 percent peak in October 2009 can be traced to a mismatch between the supply of labor and job openings, according to a study released this month by the Federal Reserve Bank of New York. That leaves the remainder due mainly to a lack of demand.”

However, the Philadelphia Inquirer ran a counter article about the complaints of potential employers unable to find the knowledge and skill sets they need to stand out in today’s applicant pool. In a June 2012 article, they interviewed University of Pennsylvania Wharton management professor Peter Cappelli, who was asked his opinion of these claims. Like me, the professor isn’t convinced by this collective whine. Because he keeps a close eye on Labor Department statistics, he is well aware of the labor situation, and the private sector claims do not seem consistent with his findings.

"There were enough of these [stories] that it got into urban-legend status," Cappelli said in the interview. To highlight the situation, he has written an e-book: “Why Good People Can’t Find Jobs” (Wharton Digital Press).

From the article: “The problem, he learned, was not a lack of educated and talented workers, but a hiring system that has gone terribly wrong.

"I think it’s been exacerbated by the recession," Cappelli said. "Employers feel that they shouldn’t have to pay as much. I think we’ve gotten used to the idea that wages don’t go up."

So what are the issues? Here’s what Cappelli found:

The problem starts with managers who create wildly inflated descriptions of the talents and skills needed for these positions. "They ask for the moon," he said.
The human resources staffs that might ordinarily push back against these unrealistic requirements have been downsized and overworked into submission.

Computer technology makes it easier for job-seekers to apply, but also eliminates many qualified people from consideration when their résumés don’t match complex and mysterious algorithms. Cappelli provides an example of a job-seeker eliminated from the running for an on-point opening because his former title didn’t exactly match the job title for the opening in the company. The wrinkle was that the job title was unique to the company. “The only people who could have qualified for that post were people who had already held the job and left it.”

It’s really odd that these issues are raised during times of high unemployment. It would lead one to believe that there is an orderly, perfect employer/job seeker environment and it occurs only in good times.

b. JOBS! JOBS! JOBS!

Somehow, with all this intense focus on the economy, employment, and jobs, analysts suffer a total blindness to any causative factor other than a traditional recession. And the measures undertaken today to counteract a slowed economy and massive joblessness are little different from the WPA program implemented by Franklin Delano Roosevelt in 1935. The theme plays over and over again: pump enough money (and cheap credit) into the marketplace, and the multiplier effect of the stimulus will reinvigorate the American economy.

Every generation has seen disruptive technology enter the marketplace and disrupt industry sectors, dissolving related jobs. It just seems to be happening faster now (again, the exponential effect of Moore's Law). Masses of telephone operators, secretarial pools, the elevator operator, the full-service gas station attendant, the milkman, home ice delivery, chimney sweeps – all eliminated from the economy by some form of technological advancement (and some operational advances in business that promoted self-service when possible).

A central theme throughout the economic section has been that technology – whether it be robotic, 3-D printing, internet connectivity and retailing, Artificial General Intelligence, advances in medical science, or something else – will be destroy both industry and jobs. History has always confirmed that, as new technologies come along, older ways of doing things (and the associated labor) diminish or disappear. But history has also taught us that as the older classes of jobs disappear, new jobs arise with the new technology that replace – and sometimes even increase – the level of employment. It’s always worked this way, and whenever it seems that technology has overtaken the capacity of humanity and the economy to recover, economists assure us that this round will be like all the others and we’ll be fine. A whole new realm of employment opportunities will appear in the replacement industries, and the economy will move on. And again, it always has. Until now.

Here’s why it’s different now. It all comes back to the aforementioned concepts of Moore’s Law and exponential growth. Linear growth explains things that are on an absolute (or projected) increasing path at the same rate. It can show a rising age or any other numeric progression and generally rises as a straight line at a 30-45 degree angle. That is where we have been throughout history – again, until now. For most of the path of exponential growth, the slope resembles that of linear growth. Then it curves upward, rising from the straight line at a sharper and sharper angle. We are entering the last period of the exponential curve, before its slope becomes almost vertical. This is a phenomenon we have never experienced. This growth in technological advancement – Moore’s Law playing out – changes the game. Today’s economists, pundits, and soothsayers refer to the old paradigm where the next generation of jobs seemingly just materializes at the demise of the old order. Proven right time and again, there is an arrogant confidence that it will happen again. But when computers, robots, AGI, and other technological advancements can self-replicate, self-generate, and create on their own, the game has changed. They no longer need our input into the economy at the levels to which we’ve grown accustomed. There is no “next job” for us to migrate towards; they are already filled by an entity that can do it better, faster, cheaper and more reliably. That is the big difference. Ray Kurzweil’s technological Singularity is playing out.

Yet somehow we seem surprised and terribly anxious over this. We even had reminders in pop culture. In a 1964 episode of The Twilight Zone, entitled "The Brain Center at Whipple's," Richard Deacon, (the bald character actor with the heavy-framed glasses who also played Rob Petrie's boss on the Dick Van Dyke show) played the role of Wallace V. Whipple, the CEO of a huge manufacturing corporation under his family’s name. Whipple is mesmerized by technology and, believing in the economic and operational efficiency of a computerized device, decides to replace his huge workforce with the new technology. Once installed, the "X109B14 modified transistorized totally automated machine," allows Whipple to reduce his workforce through tens of thousands of layoffs. His plant manager, Hanley, and other employees try in vain to try to convince him not to close the plants, arguing that the social consequences of the lay-offs need to be taken into account, with so many families dependent on income from jobs there. Their requests unheeded, Whipple goes ahead with the plan to activate the new machine and close the plants. Ultimately, the board of directors deems his obsession with technology to be on the cusp of insanity and forces his retirement. In the last scene, Whipple runs into the equally unemployed Hanley at the bar down the street from the factory and tearfully declares his pain and frustration: "It isn't fair, Hanley! It isn't fair the way they...diminish us!” A robot had been put in charge to run the company.

So, armed with a lifetime of evidence that improvements in technology disrupt industries and jobs – that so many are “diminished” by technology – why do we ignore it now? The displacement of people from the economy by technology and robotics is no surprise. It was being portrayed on television fifty years ago! Perhaps the power of exponential growth really is that difficult to comprehend.

It is shocking to see how poorly government understands the mindset of the private sector. Harder still is figuring out whether government gets its opinion from the citizenry or vice versa, because both groups consistently cite job creation as today’s most important economic and political issue.

So let's set the table. Most reasonable people believe there is good reason to have public sector employees. We believe we should have teachers and firemen, police and the military. The vast majority of our public sector employees fit one of these categories. The cuts to these groups as well as to other public sector employment have had a measurable effect on joblessness in the US.

Most reasonable people also agree that long-term employment – long-term productivity – is centered in the private sector. This is where the vast majority of us should be interacting with the economy. So, politicians and the public are both chanting Jobs! Jobs! Jobs! But they don't seem to see this from a potential employer’s perspective. Politicians keep trying to induce potential employers to take on laborers that they don't want or need, and the public keeps blaming the politicians for not having successfully done so.

Please, do not equate the loudness of speech or the apparent depth of sincerity about addressing unemployment issues with the ability to do so in any politician, business leader or private citizen. I will say it another way: Government has spent out. They don’t have the money to hire directly. Unless and until government – at any level, against the private sector’s will and to the detriment of its bottom line – can force the private sector to hire people, or induce hiring at an outrageous cost , substantial progress to place people in “jobs” will not succeed. And, of course, economists – you know, the ones sitting in the captain’s chairs that completely missed the call on the Great Recession – are chiming in: Jobs! Jobs! Jobs!

“Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much.”

  • Ben Bernanke, Princeton Commencement Address, 2013

"… 'Do we economists know anything?' And it is a very legitimate question. Because if you don't know enough to capture the most extraordinary event, economic event, in all of our lifetimes, what in the world do we really know?

  • Alan Greenspan, on economists. CBS Sunday Morning October 20, 2013

Many theorists admonish local business and government leaders to take an active role in curing local shortcomings in economic development – and this provides all the confirmation that politicians need that they can have a dramatic impact on the economy. Doing “something” is certainly more acceptable than sitting idly by. Too often, in those collective aggressive attempts to do “something” – to have more entrepreneurs, more creative class members or successful industry clusters, more Jobs! – the natural response is to try to induce them through sheer willpower and determination. But pushing the rope of artificially creating entrepreneurship, a creative class and cluster development is not working. The eternally-failing Global TransPark near Kinston, North Carolina is a glaring example of doing “something,” by encouraging the development of a cluster with little thought to the ultimate outcome. As evidenced by that project, over-aggressive efforts to do “something” may lead to bad mistakes and can be very expensive.

To my surprise, former North Carolina Governor Bev Perdue has shown a fuller understanding of the true reality of productivity than most elected officials. At the North Carolina Economic Developers Association conference in March 2009, the newly-inaugurated governor was a featured speaker. She expressed supreme optimism about the areas of the economy that she believed would be central to North Carolina’s economic future: green industry, the military, and aeronautics.

Then she went on to display an understanding of the economy that very few of our leaders possess. (Paraphrasing) “I believe the textile industry in North Carolina can still thrive,” she explained. “They might have to cut the workforce to increase efficiency and profitability, but…” WHOA! She said it! She said what every business in America has said for the last five years. Workers, with their rising healthcare and other costs; workers, who represent a huge percentage of business costs and unproductive overhead during tough times; workers, who are the human measure of these “jobs” elected officials fall all over themselves talking about; workers, who represent the biggest cost to virtually every company; yes, workers may have to be cut in order for the company to survive and prosper. Businesses are charged with making profits (and in this economy, surviving). Their disposition toward creating jobs is: “You’ve gotta be kidding. I’m trying to stay in business.”
I’ll give you an example of what I mean. In your next thoughts about job creation, try a little word exchange. I want you to replace the word “jobs” with the term "payroll expense." Because isn’t payroll expense exactly what those jobs mean to a potential employer? Try it and see how it feels to say this: “We need more payroll expense!” or “Why haven't you created more payroll expense?!” It sounds weird, doesn’t it? But, again, isn’t that what a “job” represents to a company struggling to make it? That's what's truly relevant because that's how a potential employer sees the labor force. Her company is in survival mode in this economy; increased profitability is by comparison a lofty goal of secondary importance. Nowhere in our free-market economy or in any company’s set of goals is the objective to simply create jobs.

This disconnect between governmental attempts at job creation and retention through spending and other stimulus – and the virtually opposite goals of those who are expected to do the heavy lifting that solves the unemployment problem (the private sector) – is undoubtedly the most confounding economic enigma today. And it has not been even remotely discussed.

I can’t emphasize this enough. The public sector – all the politicians from President Obama to Congress to Governors and state houses to local mayors and councilmembers – all identify “job creation” as their highest priority. The public at large agrees and holds the officials responsible for addressing the high unemployment rate. And none of the above believe that the best means to do this is to undertake yet more deficit spending to hire a meaningful number of citizens in government jobs. So the efforts at “job creation” and lowering unemployment are left to the private sector. And the last thing the private sector wants to do is to add more payroll expense. Guess what? It’s not working. Go figure.

John Bussey, in his "The Business" column in the Wall Street Journal on October 28, 2011 quotes William Frezza, a fellow at the Competitive Enterprise Institute and a venture capitalist from Boston who seems to agree: "Jobs are an input, not an output; they’re a cost of doing business, not a goal of doing business. From the perspective of defending capitalism, if you accept the premise of your opponent that business has to give back to society you’ve already lost. To put sackcloth and ashes on – you’ve delegitimized capitalism, which is goal of the [Occupy Wall Street] protesters. Businesses give back to society every day by pleasing their customers, employing their employees. There's nothing business owes other than selling the best product at the best price.”

Frezza obviously subscribes to the doctrine promoted by Nobel laureate economist Milton Friedman, who disparaged the concept of social responsibility in business in the early 1970s. He called the concept of socially responsible business a "fundamentally subversive doctrine." “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” He called those business executives who pursued socially responsible business (which includes job creation) as "incredibly shortsighted and muddleheaded in matters that are outside their businesses."

You may have heard a politically motivated CEO bluster, "I wake up every morning to do my best to try to create more jobs." If you own stock in that CEO’s company, fire him! His goal should be profitability – to survive and prosper! That's what you pay him for! This is a free-market capitalist economy! His role is not to use the company's resources (and your investment) to do social good. Is it? Well, is it?

c. Is Education the Answer?

“Illiteracy will not be defined by those who cannot read and write, but by those who cannot learn and relearn.” -Alvin Toffler

In the twentieth century, America discovered its growth hormone in military mobilization and the incredible educational success of the G.I. Bill. Young men (mostly), who, prior to the war, would have had little interest in or chance of going to college, now were given the opportunity. The ranks of colleges and college graduates swelled with millions of new students. America’s collective experience of the Great Depression, followed by World War II, was now entering a third realm that it had never done before.

Since the mid-1940s, the commitment of the U.S. to higher quantity, quality, and equality of education – elementary, secondary, and post- secondary – had succeeded to the point that it was the envy of the rest of the world. The industrial world, not much changed from the days of Henry Ford, was much larger and more active than it had ever been before, allowing the average American, educated or not, to enter the workforce and make a reasonable living commensurate with his or her skills.

This improvement-through-education paradigm was new. Many uneducated workers, both black and white, had left the fields and farms of the South to earn substantially higher wages in the factories of the Midwest. The mill culture of the South –textiles, apparel, tobacco, and furniture – was hardly a bastion of educational development, actively recruiting young men to leave public school for an opportunity to work in the factory. If large enough, companies had mill villages with company stores to accommodate their workers. Successive generations worked in the same mills, confident in lifetime employment at the benevolent hands of the mill owners. One seeking education was almost looked down upon by friends and family, perceived as not supportive of his relations, convinced he was “too good” to be associated with the others. This attitude about education persists today in many places where one would have expected communities to grow out of it. But no – their “clock” is still running at a different, slower speed.

Throughout the heyday of industrial growth from the end of World War II until about year 2000, young people were admonished to "complete" their educations by getting the highest-level piece of sheepskin they could. And somehow it all seemed to work. Companies could rely on the abilities of the "sharp high school grad" to fulfill most industrial functions. Those who needed technical training to perform a task went to the local technical institute or community college. And those who wanted to climb the ladder of success later went to night school. As the United States was in an ascending mode of seemingly eternal growth, there seemed to be plenty of room for any college graduate to enter the workforce – the specifics of the degree being of little consequence – and do no worse than become a management or sales trainee as the economy boomed. The world made sense. All was well.

But in the new millennium, disruptive technology changed all that. Computers could perform rote tasks; Thomas Friedman proclaimed that “the world was flat,” as not only were products produced at a fraction of domestic costs, but increasingly white-collar jobs could be done overseas as well. Sales forces were diminished by the Internet; bloated middle managements, deemed unnecessary, would be dramatically cut. Throw a terrible banking crisis and the Great Recession into the mix and the result is tens of millions of people who were educated for the old economy now unemployed or underemployed in this strange new economic world.

Yet somehow the discussion about the link between education and personal economic success studies stays in the old paradigm – the way we always knew it to be. We discuss the merits of a college education, debating whether it should be the ultimate educational goal for American citizens. President Obama has actively pursued higher education opportunities for young people and worked to cut costs and interest rates for student loans. Republican Presidential hopeful and former Senator Rick Santorum even called the President a “snob” for such broad educational aspirations. The question always seems to come down to an either/or decision between four-year college and technical training, usually at community colleges. At present, so many college graduates are having a tough time finding jobs – coupled with massive student debt – that community colleges are being hailed as educational heroes.

President Obama and many other political leaders – as well as economists, business leaders, and journalists – have joined in the chorus that more education is the right answer for America's long-term economic woes. And there's nothing wrong with that. I, too, believe that learning is vitally important. From reading – books, journals and current news – to experiential knowledge, to hands-on participation and internships, to technical training – these all are good, all worthy of pursuit. Better to be more knowledgeable than not. And even in the absence of assured job connectivity, there is still no harm in being well-equipped for some workplace eventuality. For generations now, more education has been associated with better jobs and higher incomes.

But with growing uncertainty in the marketplace and more flux in the demand for specific skills, making the call on which knowledge to possess – especially with the lead time it takes in the current educational paradigm (years and years!) – makes choosing a course of study little more than an educated crapshoot.

Yet, those in need do what they have to do. So the increase in education plays a critical role for millions of Americans retooling for the next round of jobs, hoping this will be the “last job,” the one that gets them to retirement. But the workplace keeps evolving. The visions of the past where workers stayed in the same industry or company or job for life are playing tricks on them, creating the image of a future very unlikely to be realized. The cruel hoax played on so many is that by following the admonitions of people in positions of power and influence to get the educations they promote, the individual typically is only marginally gaining the knowledge they would need to compete in the new economy. Again, better to be educated than not. But the President and everyone else chiming in on education need to understand that most of the jobs they are admonishing people to prepare for are from the past or the very near future. There are no futurists within the chorus citing definitive answers to which jobs or careers will be available in 10 to 20 years. The best the promoters can do is hype the benefits of STEM (science, technology, engineering and math) education because that's where the greatest shortfall is currently found. Besides, it’s a simple, belated nod to the impact that disruptive technologies have already had on our current economic situation.

In the national push to educate our adult population – with the federal government at the forefront – the term often used is "more education.", as if it were a lack of education that is consigning tens of millions of people to the ranks of the employed. In some cases, especially among those with low levels of education, that may be true. The magic bullet is to go back and get the certificate or degree or whatever volume of education is missing from the equation. What few people can tell us, though, and what is certainly missing from the formal education process, is a statement of what the right education needs to be. That’s because in this age of uncertainty it truly is an educated guess and a bit of a crapshoot to make that call and make those tough decisions. Ah, but once again, leave it to the politicians to help us out with the answer. The Huffington Post did an excellent job of putting all the pieces together in an article from February 2, 2013 about a broad higher education criticism from newly-inaugurated North Carolina Governor Pat McCrory.

“North Carolina Gov. Pat McCrory (R) set off a firestorm this week when he declared ‘educational elite’ have taken over colleges, and lashed out over what he says are worthless courses that offer ‘no chances of getting people jobs.’

“In a national radio interview Tuesday with Bill Bennett, U.S. Education Secretary during the Reagan administration, McCrory said there's a major disconnect between what skills are taught at the state's public universities and what businesses want out of college graduates.

‘“So I’m going to adjust my education curriculum to what business and commerce needs to get our kids jobs as opposed to moving back in with their parents after they graduate with debt,’ McCrory said, adding, ‘What are we teaching these courses for if they're not going to help get a job?’

“McCrory said he doesn't believe state tax dollars should be used to help students at the University of North Carolina-Chapel Hill study for a bachelor's degree in gender studies or to take classes on the Swahili language.

‘“If you want to take gender studies that's fine. Go to a private school, and take it,” McCrory said. ‘But I don't want to subsidize that if that's not going to get someone a job.’

“The first term governor said he'd propose legislation to change the higher education funding formula in the state ‘not based on how many butts in seats but how many of those butts can get jobs.’”

Great, Governor. Centuries of education at a variety of levels, through ups and downs, expansions and contractions, teaching all types of subjects – but now we have the definitive answer on the purpose of education. A substantial recession and high unemployment and a new governor decides it’s time to undo the legacy of educational leadership that has stood the test of time since 1796.

Though there is no malicious intent (wanting college graduates to get a job is not wrong), everything he’s suggested to achieve the goal of college graduate employment is naïve at best – and maybe fifty years outdated. Turning on perhaps the best state-supported higher education system in America, removing liberal arts curricula and making these universities into one giant technical college that would meet only the job vision of the past or very immediate future is ignorant – and insulting. The Huffington Post article continues:

“McCrory's comments earned a harsh op-ed co-written by Jonathan Riehl, a political consultant, and Scot Faulkner, a former Newt Gingrich aide and Reagan administration official:

‘“As a political philosophy, conservatism is grounded in intellectual thought and deliberation. The governor’s statements about education are therefore not only counterproductive but also anti-conservative.

‘”Ironically, the notion of colleges and universities as factories for job-performance smacks much more of leftist, socialist societies where individuals were not valued for their knowledge or perception but for their ability to perform tasks. As a philosophy, conservatism has in fact battled this idea for hundreds of years. The governor is apparently not familiar with this history. Perhaps his education was not liberal enough.”’

Suggesting different ways to impart the educational message other than the current system based on actual trends in the marketplace has merit Advances in all academic fields should lead to content revision in what is taught and the way the educational message is imparted will change due to different methods and systems (MOOCS, for one). But simplistically suggesting wholesale changes because the economy is not as good now as it once was is little more than knee-jerk modern-day political theatre.

To highlight the absurdity of the Governor’s assessment and recommendation, we need only look at one of the more acute areas of unemployment in the U.S. Politicians, business leaders, economists and pundits have stressed the critical importance of STEM education because of its critical association with technological advances, business creativity, and job creation. They have bemoaned the lack of emphasis on STEM education in our schools, and cite our lack of science PhDs as evidence that the U.S. is falling behind countries.

In a February 20, 2013 article in The Atlantic, writer Jordan Weissmann offers an excellent assessment of the real facts behind science doctorates and their employment. He goes so far as to reevaluate the data for American-born versus foreign students in the U.S. on temporary visas, and to question how that likely impacted employment. The results:

“The pattern reaching back to 2001 is clear -- fewer jobs, more unemployment, and more post-doc work -- especially in the sciences. A post doc essentially translates into toiling as a low-paid lab hand (emphasis on low-paid as shown below). Once it was just a one or two year rite of passage where budding scientists honed their research skills. Now it can stretch on for half a decade.”

With supporting graphs between statements, he continues: “In life sciences, such as biology, graduates now have a far better chance of being unemployed when they get their diploma than of having a full-time job. In disciplines like physics and chemistry, the percentage of employed have also fallen just below the unemployed.

“And finally, the humanities Ph.D.'s -- the few, the proud, the Romantic literature buffs who are practically assumed to be unemployable upon graduation. Thanks to the relative lack of postdoctoral spots, these scholars are both more likely to have a job upon graduating than any of their peers in the sciences and more likely to be searching for employment.” Ah, the liberal arts doctorates. The curriculum that Governor McCrory would deny state support has a higher employment rate than the hard sciences.

Bottom line: a bad economy can’t be evaluated and changed with a knee-jerk assessment and cure. Unemployment is an equal opportunity assailant. McCrory’s solution really has no bearing on the matter, because it doesn’t address the real issue – that of a dramatically changed economy. It is that changed economy – not the failure of all education everywhere – that has led to across-the-board unemployment of recent graduates at nearly 25%. To borrow from the old political saw: It’s the (changed) economy, stupid!

Clearly the frustration felt by so many – from those out of work to those trying to manufacture solutions – is real. Government’s investment in education is substantial. In good times of low unemployment, no one cares or pays any attention to the unemployment rates of recent PhDs. However, in times of high unemployment, when the impact of joblessness means millions of people aren’t working and become recipients of government assistance, government feels compelled to get involved. These educations they are providing should lead to careers. Joblessness is expensive. Politicians make brazen statements regarding change whenever the status quo isn’t acceptable. However, as we will point out shortly, all government knows to do is to do what worked in the past. And anyone trying to gain or regain employment has no reason to question or challenge the best advice from government or business leaders (who made their livings under the old paradigm). Hence, the cycle continues.

Perhaps we need a disclaimer on post-secondary education. Something to the effect of:

The United States government and its education partners from across America believe that it is in the country’s best interest for all of its citizens to be employed at their highest level of ability. We therefore encourage every American to get more education, to become more employable. We cannot accurately tell you what areas of knowledge will make you more employable; we will rely on our historical data to support established curricula that have worked in the past. We cannot accept any liability for someone’s inability to find a job once they have received more education; nor can we assume any responsibility for debts you incur while achieving your greater level of education. On behalf of the President of the United States and the U.S. Congress, thank you for your support.

Not to be outdone, state and local jurisdictions are joining the fray. They, too, believe education is important and want to demonstrate this in the most assertive way. State educators play with the length of the school year, the length of the school day, new emphasis-of-the-year clubs, and advocate for more financial support from state legislatures, while SAT scores languish and significant percentages of college freshmen need remedial help in order to participate. Local school boards and counties want to show their support for education, and there is a mantra that seems to consistently radiate from these boards across the nation, from urban and rural systems alike: Build more schools! Success at preparing young people for the next steps in life seems to take a back seat to a permanent, physical tribute to education: a new school. One would think students only succeed in newly built schools and that nothing is learned in a school trailer if the assessment is based on the local politician facility emphasis.

And to take on one more sacred cow, the fair-haired child of education that is the community college system needs a major refocus. Currently, just about the only post-secondary education available to Americans that doesn’t involve the significant time and expense of college is community college. And for generations community colleges have provided the training and education for tens of millions of Americans to better their lives. To the community colleges’ credit, if an existing business or a possible business relocation or expansion needs specific training, every community college I have ever encountered goes through walls to make it happen. They fulfill those requests admirably.

Yet on virtually every community college campus, with the exception of adding some computer courses and some healthcare courses, the curriculum today is about the same as it was in 1972. (One notable exception is Dr. Stephen F. Steele’s exceptional Future Studies program at Anne Arundel Community College in Arnold, Maryland.) You can still get your GED and learn how to tune up a motor. You can still take your real estate broker course and get your cosmetology certificate. As a rule, community colleges are still training for yesterday’s jobs. Want proof? Contact your local community college and tell them you want to learn how to install a solar panel and thermal hot water system. See what they say. With rare exceptions, they can’t do it. They have no eye on the future. Guilford Technical Community College is as fine a community college as there is in the U.S. They have introduced courses in biotechnology and avionics that hopefully will relate to private sector labor demands. They joined in a consortium of colleges and community colleges to provide the courses for the Logistics Certificate I mentioned earlier. That’s fine.

But someone with an eye on the future will realize that robots will be doing most of the assembly line and distribution work within five to eight years. How many of these schools offer courses in robotic theory? Robotic repair? Anything? 3-D printers are now priced between $1,000 and $2,000 dollars. Cost is no barrier to getting the equipment to teach students how to use them. Businesses are already starting to acquire them, and there is room for entrepreneurial opportunity. Anyone can get into the business. But will you see any courses on 3-D printing in community college course catalogs? Hardly.

At the WorldFuture 2012 conference held in Toronto in July, Brian David Johnson, the futurist for Intel, was a keynote speaker. At the end of his superb presentation he took questions from the audience. One stood out: “If you had a child in high school or college, what one skill would you suggest they learn?” Without missing a beat, he replied, “Coding.” Designing apps is a huge business right now, and is likely to remain one for the foreseeable future. Kids in their early teens are learning app development in Estonia and China. It doesn’t take a college degree to try or to succeed. Could community colleges provide that instruction? You betchum, Red Ryder. Are they? Not a chance. Change weariness from moving from Mary Tyler Moore’s “Flip” hair style to Farrah Fawcett Major’s feathered look to keeping up with Justin Bieber’s new cut is enough of a strain on the acceptance of change. No sense in rattling the cages any further.

And it is catching up with us. While America once had the best public education system in the world, we now consistently rank in the second dozen of developed countries in educational attainment. With the exception of blander, architecturally unappealing new buildings and the replacement of most chalkboards with higher-tech whiteboards, one could take a photo of today's classrooms, compare it with those of years ago, and find very little difference in the intervening 60 years – in appearance or methods. We are teaching today the same message in much the same style as we did when Dwight Eisenhower was President. The style of learning and the content of what is being taught are largely preparing our youth for jobs that have now disappeared.

I will give our readers a real life example of what I mean by telling the story I referred to earlier in the WDL and Robotics section. Many areas still subscribe to and actively practice industry “cluster” economic development. Promoted best by Harvard professor Michael Porter in his book The Competitive Advantage of Nations in 1990, cluster theory promotes the ideas that industries best thrive in two scenarios: 1) when companies have the benefit of many or all of the related components of what they use nearby, raising efficiencies and synergies among industry suppliers, and 2) when they are surrounded by like companies, creating a level of shared, yet competitive, expertise and an ever-evolving higher level of competence in that industry. Many times clusters are considered the core of the economy in whatever geographic location is being analyzed. It may take decades for a cluster to fully develop.

A cluster strategy is generally amenable to many geographic areas, and economic developers across the US recognize and practice cluster development when it is suitable. The 12-county Piedmont Triad Partnership, one of seven economic development regional partnerships in North Carolina, has developed a multi-cluster economic development strategy. Its “Regional Vision Plan” from 2005 focused on six clusters: healthcare, logistics, wholesale trade, finance and insurance, food processing, and the arts. (Tourism was an addendum.) In an amazing reassessment of its core strengths, by 2008 they had evolved to: advanced manufacturing, creative enterprises and the arts, nanotechnology, regenerative medicine, and furniture – dropping the trade, insurance, and finance clusters from the previous study. Regardless, the first cluster they chose to concentrate on was Warehousing/Distribution/Logistics.

This cluster was chosen first for a variety of reasons, the thought that it might be a powerful job generator among them. The necessary background and infrastructure for the cluster to develop were certainly present. At the heart of the partnership area was Greensboro, with its very nice, but underutilized, airport. FedEx had just opened their mid-Atlantic air hub at the site. Both UPS and FedEx Ground had significant ground operations there. Interstates I-40 and I-85 ran through the city and Interstates I-73 and I-74 were being built through the middle of the area as well. I-77 and I-95 were less than two hours away. If you wanted to move product on the east coast of the U.S., you could do a lot worse than the Greensboro area. The warehousing/distribution/logistics industry was going to be actively engaged with this positive groundwork in place.

So the partnership’s board and staff put into motion a plan that would pair two excellent concepts: better education of a semi-skilled legacy manufacturing workforce and a growing WDL cluster. A logistics curriculum was developed that would include four courses: warehousing, maintenance and repair, supply chain, and logistics management. This would allow some to end the harrowing thought of another forced career change by making it possible for them to establish themselves in a field that was certainly going to be around for a long time and was being promoted by local business leadership. Several community colleges in the region and UNCG joined together in a multi-campus effort to make the courses as accessible as possible. The Piedmont Triad Partnership website heralded the new Logistics Certificate as a bright star of hope for those stranded by plant closures.

In July 2008, FedEx Ground was approved for a $952,000 incentive by the Guilford County Board of Commissioners. The project promised an investment of $100 million, 249 new jobs, at average wages of $14/hour. It seemed to be a perfect fit for the WDL cluster, and operationally, it was.

What the public never sees (and the state and local politicians, if they ever find out, don’t disclose) is that there is often a huge difference between “average” wages and the uncalculated (and therefore undisclosed) median wage. The "average" number is simply the arithmetic mean; total payroll divided among all of the employees. The median wage is the exact center of the pay range: half of the employees make more and half make less. The $14 per hour average wage here took management and staff professionals into account. In a warehouse/distribution center such as this, the majority of employees work the warehouse floor loading and unloading packages. The median wage for the project was $11.10 per hour. FedEx Ground did not come to this amount by accident. They knew the wage it would take for them to be profitable; they knew the wages they would need to pay to get and keep a quality workforce; they knew the wage level that would appeal to government officials for incentive assistance. With a major UPS center close by, they were able to arrive at a competitive number. In a market that has been riddled with manufacturing closures in textiles, apparel and furniture, there was an ample supply of labor for jobs such as these. To FedEx Ground’s credit, they openly stated that many jobs would be only part-time, and compensated accordingly.

Despite promises of a multitude of high-paying jobs, warehousing represents the bulk of the jobs in the growth industry of logistics. This is why logistics certifications would pay dividends, local residents were told. The Logistics Certificate would raise the level of knowledge and, therefore, the earnings capacity of the worker. It would provide more job security. The reality turned out to be something different: A laborer enters the workforce at FedEx Ground making $11.10/hour. After completing the logistics curriculum, filled with high hopes for the future, he’s still worth $11.10 an hour. And for every person entering this line of work, there are two more waiting for an opening. This cruel outcome is being played out over and over across America, as promises for brighter futures based on better education come to nothing. We can hum along with the UPS song “That’s Logistics” (to the tune of “That’s Amore”), but it doesn’t change the situation. For most Americans, logistics still means a hand truck and a bar code reader.

Ironically, the first cluster that the Piedmont Triad Partnership undertook to build in the hope of establishing greater capacity among the workforce – through education and an industry focus – may be the first to be completely overwhelmed by the disruptive technology of robotic warehousing. From its start, the cluster/education process may take less than ten years to totally unravel.

My fervent hope is that community colleges across America will seek advice from futurists, attend technology conferences, or at least read an issue of Wired magazine to get some sense of the advances that will dictate the needs of future employers or provide entrepreneurial opportunities, and accommodate these advances in their programming. In the current state of affairs, this just isn’t getting done – and too much is riding on the outcome.

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Waiting for sixteen

Coming out on Friday. Thanks for the words of encouragement, friend.

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Thanks, man.

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