“I believe we are at a critical point in time in our country,” said Jane Oates. “If we are to continue to be the number one country in the world in terms of our workforce and the most creative and innovative businesses, we have a lot of work to keep doing.”
As president of the California-based think tank WorkingNation and a former labor official for the Obama administration, Oates has dedicated much of her career to shaping America’s workforce of the future. She spoke at an October 23 conference on the “Future of Work” held by Einstein’s Alley and the New Jersey Business and Industry Association.
Oates says there are four major forces at work transforming the nature of work:
Technology is improving, and automation is affecting every kind of job. Oates quoted former Alibaba CEO Jack Ma, who predicted that some day there would even be “robotic CEOs.”
It’s not just factory workers who have been displaced by technology. Former middle-class white collar jobs such as bookkeepers and paralegals have already been decimated by automation. “Think of any job that is overly repetitious or could be done as well, if not as humanly well, but as well, by a machine,” Oates said.
Globalization is allowing businesses to tap into the talent they need from anywhere in the world “as long as you have a good visa lawyer,” Oates says. “You can bring in anybody from anywhere.”
On the other hand, companies are now facing competition from countries in Africa and South America, where economies are rapidly evolving. These places have skipped over landlines and rotary phones right into the cell phone era, and provide competition as well as opportunity for American businesses. “These countries are going to be our equals,” Oates says.
Longevity means that more people are working longer. The optimistic interpretation of this trend is that people are staying healthier longer. “Thank goodness we are still healthy, and thank goodness we still have something to offer,” Oates says.
An older workforce, however, means fewer opportunities for young people, even in entry-level jobs. Oates says it’s not uncommon to see senior citizens working at fast food restaurants and coffee shops in positions that were formerly taken by teenagers. The people working those jobs are also trying to support families on the income they provide, rather than just earning spending money for the summer the way a teenager would.
A disconnected education system is not always equipping graduates with the skills they need to succeed in the modern workplace, Oates said.
Oates emphasized the importance of the first trend. Not only is automation displacing jobs — at least 75 million jobs worldwide according to one study — but it is changing the skills that are needed to do existing jobs. Automation is now augmenting most jobs, both blue and white collar: think of the rideshare driver who uses a GPS navigation system all day. This reality has made digital skills necessary for nearly every job.
All of these factors add up to uncertainty in the job market. Automation or globalization could affect certain industries disproportionately, which is why states that have more diversified economies are better off. For example, retail sector workers might lose their jobs because of online competition, which is especially bad news in the 21 states where Wal-Mart is the largest employer. In 19 states that title goes to a healthcare system, which is facing issues of its own. While unlikely to be automated away, many of the jobs in healthcare pay extremely low wages. Home health aides often are paid minimally and have to work long hours despite the importance of their jobs.
Oates says she is not a fan of universal income as a way to alleviate these inequalities. “I don’t think we should give people wages they don’t deserve,” she says. “I think we should upskill them so they can deserve higher wages, so that they can perform higher-skilled jobs.”
Interviewed after the speech, Oates acknowledged that the workforce has become more educated than ever. Asked how to alleviate inequality, given wages that have stagnated even as workers are now more educated than they ever have been in history, Oates pointed to Governor Murphy’s education plan as good policy.
“Free community college for families making $60,000 or under goes a long way to making it more affordable to everyone,” she said. She noted that it wasn’t just low earners, but middle-class families earning $40,000 or $50,000 a year who were struggling in today’s economy. She said certificates and associates degrees have proven to be a great way to get a job.
She pointed to the decline of unions as one reason the middle class is struggling. Oates grew up in Philadelphia, where her father was the president of a teamster’s local. “I think that gave me tremendous respect for working people,” she said. “I grew up with tremendous understanding of how hard it was for people, even back then.”
Change is only going to accelerate. “We’re never going to move this slow again,” Oates said in her speech. She noted that orders for industrial robots were up 19 percent in the second quarter of this year, and that smaller and smaller companies were using them. She recently visited a company that had 150 employees and three robots, which required a staff of five to keep running.
For companies the key to keeping up with the changing marketplace is to develop the skills of their employees and cast a wide net when recruiting for talent. One way of doing this, she said, is for companies that have charity programs that work in underprivileged areas to give job opportunities to the people the charity arm is working with. “You don’t have to hire every kid … you always want the best talent,” she said. “I’m just suggesting that human resources talk to the philanthropic people.”
In other states, companies have banded together to train their employees in the digital skills they need to do their jobs effectively. A group of companies in Maryland and northern Virginia recently looked at the skills they needed and the number of college graduates who would be looking for jobs in the near future and discovered a massive demand and a miniscule supply. So the region’s major employers formed a group called COLAB together with local universities to create a three-course sequence in digital operations and a four-course sequence in digital management, where students can earn certificates that are recognized and valued by employers.
Oates said that even in a strong economy with a low unemployment rate, there is still a large group of people who are simply not participating in the workforce: the current workforce participation rate is about 62 percent, leading Oates to wonder what everyone else is doing. “Are we making sure everybody has a chance to get back?” she said. “In order to build a thriving community, we need everyone to be earning more money than just enough to get by.”