October 11, 2015

Building sustainable careers and labor forces in America

In the Thursday, July 21, 2011, issue of The Wall Street Journal, reporter David Wessel wrote an article entitled “What Derailed the Economic Recovery?” in which he attempts to describe the different theories for why the economic recovery has been both weak and short-lived. He immediately dismisses the theory that external events, like the Japanese tsunami and nuclear disaster, have simply delayed the recovery. He gives more credence to two other theories: excessive uncertainty caused by government over-regulation and by a poorly designed stimulus package; and the fact that we are seeing a long-term pullback from a credit-driven economy.

These theories are certainly part of the explanation, but I would offer another explanation: that we are in the midst of a long-term redefinition of the skills and capabilities our economy needs, as well as the way we govern ourselves as a society, and that, as a result, there is a serious mismatch between the skills our economy needs and the skills and capabilities available within our country.

Our economy, our labor-management relations, our government tax collection systems, our communities, and our social relationships are build upon an economy based on regular full-time jobs with well-defined and relatively stable definitions of job responsibilities. However, the world we are entering makes our ways of organizing work, labor-management relations, tax collections, communities, and social relationships obsolete.

When young people ask me about how they can have successful careers, I tell them that there are three ways of defining their career objectives: around a job or a profession, around working for a particular organization or industry, or around a mission or cause.

Career objectives organized around jobs or professions

In the past several decades, we have heavily emphasized training people for specific job categories and causing them to define themselves around a particular job category. People get jobs as teachers, lawyers, accountants, consultants, general managers, IT professionals, auditors, engineers, or HR managers or professionals.

In fact, I think we have gone overboard in rigidly defining jobs and professions by creating state and local licensing requirements that have significantly raised entry barriers and lowered employment in many professions. For example, to get a license to cut hair at a barbershop in Connecticut requires a one-year course of study that costs a person $20,000. While there are good reasons to require education, training, and certification for hair cutters, since they handle sensitive and potentially toxic chemicals, I find it hard to believe that the certification process should cost an applicant $20,000.

Colleges, universities and training schools, as well as governments, like the idea of slotting people into job categories. It is easier to organize curricula around job categories, and, as noted above, it can be highly profitable to train people for specific, licensed job categories. It is easier for government regulation and reporting to attach people to specific jobs. Unions can more easily organize around particular crafts and job categories.

The problem with this form of career organization is that, from time to time, particular types of jobs or professions become very attractive and end up creating surpluses of people with job-specific skills. This happened with aerospace engineers in the 1960’s after the space program was phased out, with journalists after the Internet obsoleted traditional print journalism, with IT professionals after the hiring surge caused by Y2K ended, and with lawyers after companies found ways to automate what lawyers used to do.

Over a much longer period of time, productivity improvements will obsolete any particular narrow job description that pays a high salary or that, even at a low salary, employs a lot of people. Agriculture has employed progressively fewer people, as has manufacturing, and we are seeing a similar reduction in call center workers as we move more toward self-service. In the next decade, I predict that retail cashiers in large stores will decline as technology moves us more toward self-checkout systems.

Today, we have many people trapped in jobs or professions for which the supply far exceeds the demand. Creating more specific jobs in specific categories is not a good way of managing and sustaining an economic recovery.

Organizing careers around companies or industries

This was a popular way of building a career after World War II and into the 1980’s and still remains as a way of thinking about career planning. In the 1940’s through the 1970’s, people entered the automobile industry because it seemed large and stable. Today, the U.S. automobile industry has probably shrunk permanently because we have declined from purchasing 17 million new passenger cars a year to about 11-12 million, as cars become more reliable and their replacement cycles lengthen.

Large companies relentlessly shrink their workforces over time, even in good economic environments, especially as they seek more productive and lower cost work environments, so the notion of attaching oneself to particular companies is obsolete. When I was growing up in Rochester, New York, cousins and friends urged me to seek safer employment in companies like Eastman Kodak and Xerox Corporation, companies that have a fraction of the jobs they had 40 years ago.

Government and health care jobs have increased significantly in the last decade, but government jobs are already shrinking, and I predict that health care jobs will as well. We will find ways to get more health care tasks done offshore or through technological means. For example, the task of drawing blood will move from being a high-skilled task in a laboratory to a self-administered task for many applications. We will still need nurses trained in drawing blood intravenously, but the occasions when intravenous blood draws will be needed will decline over time.

Careers organized around missions, causes, or problem areas

To me, the most sustainable careers are those organized around a mission or a cause that will take decades to address. We are blessed or cursed, depending on one’s perspective, with societal issues that are going to take years, if not decades, to address. Those who can identify recurring work responsibilities needed in the addressing of those missions, causes, or problems can secure long term employment.

For example, America will have a long-term need to rebuild its crumbling infrastructure. It will be several decades, if ever, before we complete this process. Those with skills deployable on the process of rebuilding America will be employable for a long time.

We have a shortage of civil engineers and systems engineers to do the work on the major capital projects required for this rebuilding process Relative to other professionals, such as attorneys, those who can help manage environmental, land-use, and financing issues will be employed for a very long time.

Funding may ebb and flow, but we do not have the luxury of stopping work on these projects. Moreover, even if a specific type of professional work declines, there will be adjacent spaces in which work will be needed.

We have big, long-term societal problems, such as the rebuilding of our crumbling infrastructure, the sustainability of our environment, the need for energy conservation and efficiency, and the reskilling of our workforces. We also need to deliver services to turn our least productive citizens into more productive members of our society. Those who focus on societal needs and then work backward to what tasks are required to meet those needs are most likely to figure out what skills are needed and then to develop those skills.

We have to get away from rigidly defining jobs and certifying people into those jobs, and to move toward defining broad societal needs and deploying people toward meeting those needs. Government can facilitate these processes by organizing stakeholders to address them, but it is a hopelessly inefficient and slow stakeholder in creating jobs and filling them with people that can meet complex and often fast-changing needs. Government also has to get out of the business of creating large and inflexible entry barriers for jobs and professions. To the degree that licensing requirements exist today, government needs to have a process of revisiting those requirements every few years to insure that they still make sense.

It is a tragedy that we have so many potentially productive Americans on the sidelines, either collecting unemployment benefits, or, in some instances, having exhausted their benefits when there are so many compelling societal needs that remain unaddressed.