Dr. John Psarouthakis, Executive Editor of www.BusinessThinker.com, Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation, Adjunct Professor(ret.), Ross School of Business, University of Michigan.
Millions of American “smokestack” jobs no longer exist. Millions of other American jobs, from nearly every sector, have been exported. Tens of millions of Americans are now sustained only by the “safety net,” or by working multiple part-time jobs at low wages with no benefits. More than one-quarter of working Americans lack enough resources to sustain themselves three months if laid off, a number that no doubt has risen since it was last compiled. This is a very, very bad time to be an unskilled worker with no prospects of being retrained in a way that will land a job. A human being whose skills are obsolete is among the saddest of stories. Some of these Americans, especially older workers, are going to be left behind. Millions more will never earn the kind of living they once did. This states one hellacious problem; but it does not define the problem in any useful way for a problem-solver.
In getting one’s arms around what might seem like an unprecedented catastrophe, it’s good to start by realizing that today’s displaced workers are not alone in the American experience. Our workforce is undergoing massive transition, a tectonic shift, really, in the way Americans earn their livelihood. But it is not unprecedented.
In the late 19th Century, more than half of American workers were employed on farms. Countless more Americans’ livelihood derived from selling goods to farmers or transporting and processing farm products. Today fewer than two percent of Americans work on farms. Meanwhile, our farms’ productivity per acre, thanks to technology and mechanization, has soared. Today’s American farmer is estimated to feed, on average, more than 150 people. In 1960—not 1860, but 1960—one American farmer’s output fed only 25 people. Today’s farms deploy almost as many tractors as workers. This startling transition was set in motion at least four generations ago, and has lost the first-hand, breath-taking impact it had for your grandfather or great-grandfather.
The farm experience’s relevance to our current troubled times is obvious (though an urban youngster growing up in the belief that vegetables are grown in shrink-wrapped packages will have trouble making the comparison). The point clearly is this: The public probably thinks of farmers as being the least affected by technology, but the impact of technology on agricultural employment numbers and on skills needed for agricultural employment has been beyond enormous. More than half of America’s workers were no longer wanted at what was, in most cases, the only workplace they had ever known. They had to go somewhere else, and do something else.
Think about the scope of change as we entered the 20th Century. Our greatest 19th Century public engineering project had spanned a vast continent, laying railroad tracks that would allow homesteaders to ship farm produce and livestock to our cities. Americans rode a horse, or used a horse to pull a carriage. Farmers used 22 million working animals before the advent of mechanized harvesting equipment. You know what happened to that paradigm. We produce far, far more food per farmer—and per acre—than we did when most Americans were producing and processing food. That is undeniable progress, but it was accompanied by upheaval and fear and, for many, pain. Our task early in the 21st Century is to make our current upheaval turn out as well as when farmhands became factory workers, the great American economic engine created a vast middle class, and “the American Century” was born.
The most daunting part of today’s transition in human terms is the matter of what will happen to “obsolete” citizens displaced by the loss of millions of traditional manufacturing jobs, and by jobs in other sectors where technology constantly improves productivity. It has taken several crucial wasted decades for most Americans, and most politicians, to begin understanding that those high-paying factory jobs were not temporarily lost to some “business cycle,” and cannot be brought back to life with a little government tweaking and a lot of government money. These jobs are gone, a fact John McCain paid a political price for understanding.
Americans once lost farm jobs by the millions, and now have lost assembly line jobs by even greater millions. That is not America’s only problem today, but it is the problem politicians will seize upon with instant “solutions” because it is the richest vein for mining votes. Some of the rhetoric will be earnest and well-meant, some will be empty sloganeering, and some will be flat-out demagoguery. (“Let’s get America moving again and bring back those good-paying jobs—I will fight for you and get that done.”) But remember, let’s define this problem first; let’s understand the problem. Meanwhile let’s not allow government to dive in with ill-framed, over-reaching solutions.
We have now been through several election cycles in which politicians and pundits of every stripe have chanted “Jobs, jobs, jobs” as if such a simple phrase both defined and solved the problem, when it does neither. It’s merely a phrase that sells well on the campaign trail.
Technology is neither a bad thing nor a good thing. New technology can produce new jetliners, and it can produce new bombers. It’s up to human beings to manage the possibilities. When it comes to worker displacement caused by new technological efficiencies, or by obsolescence of old products, we must simply find new, winnable battles and abandon the old losing battles. Such changes are, after all, irreversible. in later articles I’ll discuss some of those winnable battles.