Trade With China Isn't Our Top Economic Challenge. Donald Trump Should Tackle Automation.

Monty Rakusen/Cultura via Getty

Originally published at USA Today

April 12, 2018

Monty Rakusen/Cultura via Getty
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Current political and economic issues succinctly explained.

The Trump administration has threatened massive new tariffs against China, promising that protection against imports will bring greater fairness and prosperity to our economy. But these actions will harm more Americans than they help — driving up consumer prices, increasing costs for manufacturers, and threatening to trigger a still more damaging trade war.

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On top of that, this approach misses the mark. The nation’s central economic challenge is not trade. It is the rapid pace of technological change — through automation, robotics and digitization — that is changing millions of jobs and has left too many Americans on the margins.

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We believe there is a better way. In our new Council on Foreign Relations report on the future of the U.S. workforce, we argue that for more than 30 years our leading institutions — governments, companies, and  educational and training systems — have failed to equip many Americans with the skills they need to succeed in the 21st century economy. 

The crucial task facing the United States is to rebuild the links among work, opportunity and economic security in the face of accelerating technological change and global competition. Continued failure to address this challenge will amplify the pressures for retrenchment that are causing our country to back away from its historic global leadership.

The pace of workplace disruption is accelerating. Just with existing technologies, in about 60% of occupations, nearly one-third of employees may need to change jobs or develop new skills over the next decade, according to McKinsey Global Institute.

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We are not facing a jobless future; indeed many companies complain of labor shortages. Smarter machines will replace some kinds of work, but they will also open up all sorts of new jobs. There was no such thing as a Web developer until the early 1990s, and in 2016, 163,000 Americans did that job at a median annual salary of $66,000.

But a better future is only possible if we prepare Americans for the jobs that are coming. Education and training need to be linked more closely to emerging careers, and with the growth of "gig" and part-time jobs, benefits must match the way we work.

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Our bipartisan group offers a road map to address these challenges. We recommend measures to sustain U.S. technological leadership, boost job creation in struggling regions, streamline occupational licenses and other barriers to mobility, and offer more effective help — based on the best global models — for mid-career workers who lose their jobs.

Two pieces are especially important. The first is to make a clearer path from education to better work opportunities, and make lifelong learning a cultural imperative. U.S. success in the 20th century was built on education: We were the first country to make universal high school a reality, and then moved millions of students into the best colleges and universities in the world.

Today, Americans need not just more education, but  also learning that's better adapted to the changing nature of the labor market. According to Burning Glass Technologies, for example, the average four-year liberal arts graduate starts at a salary of about $43,000 a year. But if that graduate has social media skills, the starting salary jumps by $3,500; graphic design skills are worth an additional $9,000; and computer programming skills $18,000 more.

For two-year college graduates with targeted degrees, Georgetown’s Center on Education and the Workforce estimates there are 30 million good jobs in the country, paying a median of $55,000 a year, for those with targeted degrees.

Getting young people on these career paths requires better guidance and support than many are being offered. More hands-on involvement by employers, and more options outside the classroom, such as apprenticeships and internships to help students hone the skills they need for better-paying jobs are needed. Better credentialing systems are essential to signal employer requirements more clearly, so that job seekers can plan and target their training.

Second, policies must better support the way Americans actually work today. The United States has created 10 million jobs over the past decade, but nearly all the net job growth has been in part-time, contingent and gig economy jobs. While many employers and employees appreciate these sorts of flexible jobs, very few come with the benefits that employment provides to most full-time workers — such as health care, retirement, sick leave and the other hallmarks of secure job.

In the future, such benefits need to be available to all workers and be portable — tied to the worker rather than to the job.

Succeeding in tackling these challenges requires a broader movement and a generational change in our approach; governments cannot do it on their own. Our report calls for the creation of a National Commission on the U.S. Workforce to share best practices among states, and recognize and reward companies that are training and preparing their employees for the future.

We believe helping more Americans adapt and thrive is the defining economic issue of our time. Many of the solutions are bottom-up and local, with governors, mayors, non-governmental organizations, business and educational institutions all playing important roles. With such a broad-based movement, the United States can build a more productive, inclusive and resilient economy for all Americans — becoming once again a model for the world.

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