Reskilling for the Changing World of Work

The presidential campaign painfully illuminated the incredible loss of manufacturing jobs in the U.S.

The causes are clear: free trade policies have made it easy for companies to move manufacturing jobs to countries with dramatically lower labor costs; some industries—like coal—are being replaced by lower-cost alternatives; and technology is enabling companies to operate with fewer and fewer workers.

The political debate of what to do about this is likely to continue for a while. Improvement is possible. Manufacturing in some sectors could return.

After all, even the German auto companies are making cars in the United States. But as manufacturing returns, it won’t be steel mills. It’s more likely to be cell phone assembly plants.

A heavy investment in infrastructure, tax reform, and the American economy could also create new jobs. But we will discover there is no simple answer for the many workers in industries that have been displaced.

Just placing tariffs on trade won’t solve the problem, and could make it worse.

But for jobs that do return, I am sure about one thing: Today’s work and the work of the future will require more skills. Individuals, companies, and governments must keep that in the forefront of their efforts to create jobs and opportunity.

The Challenge in Coal Country

An article in The Washington Post, written by a 20-year-old living in Appalachia, illustrates the challenge. The author comes from a lineage of coal miners, from his great-grandfather to his cousins.

But now many miners in the author’s community are out of work, with 25 percent of people in the county living under the poverty line.

This young man attributes his community’s pain to “corporate greed, mechanization, and the rise of fracking.” (Fracking has made other forms of energy competitive with coal.)

“Corporations”, he continues “are emboldened to cut wages and benefits with no regard for the working people who drive the company’s profits.”

I must agree that improvements in corporate efficiency and profitability have mostly benefited shareholders, not workers. But there may be a hard reality that the mine operator in this community would not have survived without reducing operating costs.

And I am certain the relentless advance of mechanization and technology means the mining will be done by fewer people.

So What Should a Person Do?

This articulate 20-year-old is now working at a Waffle House for $2.35 an hour, hoping for enough tips to eke out a living. He’s joined a national movement of service workers fighting for $15 an hour and the right to unionize.

His experience and learning from this campaign is inspiring. He wants to “tackle our broken economy head on.” He’s not waiting for the government to fix his condition.

If I had the privilege of advising this person on what to do, I would tell him to learn a new set of skills. Get out from behind a counter, although I do believe in the dignity of all work.

A 20-year-old has 40 to 50 good working years ahead. It’s important to set a course now for the future.

The challenging question is whether, even with a new set of skills, this person will be able to find a good job in his community.

Going elsewhere for work may be painful. It’s natural to want to stay in a community where you and your family have played an important part. And I have been struck by the virtuous sense and commitment coal miners have for their jobs.

But if he can’t find better work in his community, I would tell this 20-year-old to move to a place where his new skills are valued. It may be the only way he can participate in a new economy.

Work Has Been Changing for a While

I saw the nature of work changing over 20 years ago as processes were being redesigned. At that time, I predicted new work processes would require fewer, more highly skilled workers, who would be doing more complex work.

I saw it happening first at a life insurance company. My consulting firm had been asked by the company’s CEO to find out why it took 24 days to get a simple insurance policy and premium invoice into the hands of a new customer.

When we looked, we saw the work flowing through 18 different departments. But the real work took only 10 minutes.

Why, we asked, couldn’t a single person do this work? Of course, there was the need for more information technology (IT) so that person could make intelligent decisions.

Those IT systems were built. And the model of the “case worker” emerged. The insurance policy and invoice could now be out the door in a couple of hours.

That “case worker” replaced the people and hierarchy of the 18 departments. The work was more complex and required intelligent decision making.

The good news was that people could be retrained and found the new work more interesting than the highly fragmented work they had been doing inside a department. The drift was clear: fewer, more highly skilled people, doing more complex work.

How Far Will Automation Go?

Today, many of the processes in financial services have been fully automated. A customer digitally inputs information and a service is priced and delivered—or denied, if the customer has a flawed credit history. Now the “case worker” has gone away.

Automation will clearly continue to advance. Intelligent and learning systems will replace people. But automation still needs human oversight and sometimes human intervention.

That oversight will require lots of intelligence and skills. Business, to some degree, will always remain a human enterprise.

Automation Will Not Replace All Work

Clearly, a factory today will have fewer people. But someone has to build that factory and the equipment to run that factory, to develop and run the IT that supports the factory, to run the logistics to provide raw materials and deliver finished goods, to build and maintain the physical infrastructure around the factory, to provide services, healthcare, homes, and schools for the factory workers.

You get it: In a good economy, there will be lots of jobs.

This Economy Requires a Skilled Workforce

I cannot prescribe everything a good economy requires to generate jobs. I do know that a skilled and educated workforce is required to run a good economy.

Business and government must partner to invest more in the development of people. No one will build a new factory if there aren’t people who can run it. We are competing with China, not just on cost, but also on competence.

I fear the rhetoric I hear today that associates education with elitism. That thinking will return us to the dark ages. It’s time to elevate the importance of a skilled workforce. The nature of work today demands it.