Roughly 14 percent of American workers lose their jobs each year, according to the Bureau of Labor Statistics, and these people typically search for five months or longer to find new jobs, with results often much lower in pay and status. Many, especially those in the lower half of the income distribution, are becoming increasingly anxious and angry. Class conflicts and political gridlock are serious.
This problem will soon grow yet more dangerous. Digital automation has recently -- in the last five years or so -- gained dramatic new leverage. Computers can now handle major segments of both "thinking" jobs (such as free-form customer-service conversations) and "doing" jobs (such as driving vehicles). As automation picks up speed, it is expected to soon be able to disrupt and/or displace workers in roughly half of all current jobs.
What can we do? Better job transitions will depend on innovation, especially within the metropolitan areas that are home to specialized labor and economies of scale. For better results, these areas need to be better at matching skilled workers to jobs, developing skilled (and re-skilled) workers, and fostering collaboration across institutional and jurisdictional boundaries.
Matching skilled workers to complex and changing job requirements: In previous eras, when there were only a few job types, matching was relatively simple and relied largely on academic records, job histories and personal connections. Now, however, with labor markets much larger and more complex, job matching can't be reliably handled so informally. We need better ways to identify, assess and certify skills. This kind of work, of course, is exactly the kind aided by digital big-data analysis and pattern recognition. Artificial-intelligence firms are already developing relevant labor-market tools.
Developing skilled (and re-skilled) workers: Education must help students understand new concepts and apply them in real-world physical and social settings. It's education for performance, not just for test-taking. It can clearly benefit from online delivery, which is inexpensive, always available and heavily interactive, providing quick, relevant feedback. But this also requires field work and face-to-face interactions between students and instructors, and proximity to local employers is critical. Sweden's network of job-security councils provides an effective framework for efforts along these lines, and in the U.S., regional and state-level initiatives can be found in states as diverse as Colorado and Indiana.
Fostering collaboration: Roles and incentives for job transitions must be made to work for the critical stakeholders:
- Employers need to help identify required skills and will benefit from education delivered on a more efficient scale than they can provide on their own. In return, they will need to pay a fair share of the costs and avoid locking in employees via non-compete agreements or restrictive health-care arrangements.
- Educators need to partner in the design and delivery of curricula and skill certification. While traditional primary and secondary education will be important, community colleges and new job-training start-ups are likely to better combine well-targeted instruction with local relationships.
- Workers and their families must understand the growing importance of lifelong education and what they must do to benefit.
- Governments must position themselves to provide needed regulations and investments, as well as critical support services such as transportation and health- and child-care services.
Can we create a more agile and effective economy by making job transitions less painful? Can we generate the individual, institutional and society-wide changes required? So far, U.S. cities have not invested much in this work, but they are going to need to do more if they are to avoid being left behind in an age of digital disruption. They would do well to explore Singapore's comprehensive initiative known as SkillsFuture. Its suite of programs -- developed by Singapore's Future Economy Council in alliance with educational institutions, employers and unions -- provides Singaporeans with in-depth personal guidance and lifelong learning.
The U.S. needs similar efforts. And the technology community, which has so far focused almost exclusively on automation, must now help resolve the inequities and stem the political mistrust it has helped create. We can and must do better on the problem of job transitions.