EconoMatters, Global HotSpots

Why Good U.S. Jobs Are Too Few and Wages So Poor

The lack of workers trained for a more technologically demanding workplace is slowing growth.

Credit: VLADGRIN Shutterstock.com

Takeaways


  • The future lies not in being angry about false injustice, rather in building and teaching machines.
  • Lack of workers trained for a more technologically demanding workplace is slowing growth.
  • By 2030, it will become technologically possible to replace 90% of the jobs with smart machines.
  • The globalization of technology will relegate us to low paying work better left to androids.
  • Four in ten graduates lack the complex reasoning skills needed for white-collar work.

Americans are justified to be angry about the economic recovery. This is a bipartisan challenge.

Since Ronald Reagan ran the country, the availability of attractive employment has been trending down and slowing economic growth is often blamed.

During Obama’s recovery, U.S. GDP has advanced at a 2.2% annual pace, whereas the comparable figures for the Reagan and Clinton presidencies were 4.6% and 3.7%.

But that puts the story backwards — the lack of workers adequately trained for a more technologically demanding workplace is slowing growth, not the other way around.

Switch to automation

Automation has been an enduring theme throughout American history. First, reapers and tractors consolidated farms and sent workers to factories.

Then machines replaced workers in manufacturing, pushing them into more highly paid professions in medicine, education and technology (but also less well paid occupations in restaurants, retailing and other services).

Until recently, computer-programmed machines could be taught strenuous and repetitive tasks like attaching a heavy, rigid fender onto an automobile.

Going forward, robots will increasingly replace people in activities requiring more-subtle manual dexterity—like making shirts and harvesting fruit—and those requiring more complex cognitive processes like masonry construction, driving limousines and building new robots that adapt to changing environmental conditions.

The drug store I visit in Washington no longer has cashiers—just a group of checkout machines and one clerk to assist technologically flummoxed patrons.

Over the next two decades, robots will be capable of unloading pallets, stocking shelves, filling prescriptions, and generally running the store with minimal human intervention.

Flawed education system?

By 2030, it will become technologically possible to replace 90% of the jobs as we know them with smart machines.

The real challenge, however, will be training most Americans to engage in intellectually demanding and creative work.

Otherwise, the globalization of technology and competition will relegate most of us to very low paying work better left to androids.

In 2016, Americans should be skeptical, not merely of false promises to restore prosperity made by Bernie Sanders and Donald Trump, but also outraged by the handiwork of mainstream politicians.

The latters’ efforts to make a U.S. high school diploma universal have made it a nearly worthless credential.

Less than 40% of 12th graders are ready to read or learn math at the college level, and many fewer have skills to enter technically demanding positions without post-secondary training.

A college diploma is not much better. After millions of unqualified students have been pushed into universities, four in ten graduates lack the complex reasoning skills needed for white-collar work — as it exists today.

Machines equipped with high-level artificial intelligence could replace armies of stockbrokers, insurance adjusters and restaurant managers over the next several decades.

Need for more technical skills

Meanwhile the president and his presumptive heir, Hillary Clinton, remain wedded to pushing more people into college (and too often into debt) without regard for whether this investment could possibly pay off.

And conservatives—including the likes of Ted Cruz and Marco Rubio — oppose universal standards for more academic rigor like the Common Core.

The future lies in educating Americans, not to be angry about false injustice or an omnipresent state, but rather to build and teach the machines that will do the work that has burdened humanity since the first branch was shaped into a hunting implement.

Without young people trained and encouraged to do that sophisticated work, the locus of prosperity will permanently shift from America to Asia.

There, pragmatic leaders urge children to study engineering, not the personal and institutional hobbyhorses peddled by pious academics and deceitful politicians.

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About Peter Morici

Peter Morici is a professor of international business at the University of Maryland in College Park. [United States]

Responses to “Why Good U.S. Jobs Are Too Few and Wages So Poor”

Archived Comments.

  1. On January 8, 2016 at 10:14 am Jan Morgan responded with... #

    This is an excellent and timely article, for Canadians as well as Americans.
    However, I do disagree strongly with its conclusions!
    Throughout history, new inventions and machines have eliminated jobs. However, until now there were always other jobs and opportunities for workers.
    We have reached a turning point. Although there will be many interesting employment opportunities and work in the “caring” professions, there is lots of evidence to establish that a sizeable minority – growing as technology grows – will not be employable.
    A growing proportion of the population may be “self employed” in various interesting ways, and volunteer usefully in their communities, but they will not be able to “earn” an income. Many countries are now beginning to accept that society will have to provide a “guaranteed minimal income” to all its poor and unemployed citizens.
    In January, 2015, the Fraser Institute, a conservative Canadian think tank, carried out an extensive study of the Guaranteed Annual Income, and concluded that it was substantially less expensive than the present costs in Canada for the poorest sector of our population.
    I expect that by 2030 most of the world will have implemented some such system to eliminate world poverty. It’s about time!

  2. On January 8, 2016 at 11:31 am hhour responded with... #

    I fully agree with your conclusion.

  3. On January 8, 2016 at 3:42 pm Evangelical2 responded with... #

    It’s annoying that people think there will always be more jobs. The US practiced slavery…if you think of the slaves as automation then you get the exact same scenario without the human tragedy.

    When machines can do the work of humans we have a choice.

    Either 1% owns all the capital and the rest live like the “poor white trash” of the south, subsistence farming and bitter hateful of their condition.

    Or we do away with an economic system where work is the primary means of aealth redistribution.

  4. On January 8, 2016 at 6:03 pm Adam Kassur responded with... #

    Look around you. The types of jobs companies produce are 90% garbage! These jobs are about forced psychological productive results but nothing in return. Companies are also getting desperate to find more and more low critical thinking drone humans to do these jobs without questioning why their wages are so low. That is why immigration is getting out of control, because most corporations do not care about the human variable in business and will instead exploit to the best of their abilities at everyone else’s expense. Wages are EPIDEMICALLY suicidally low! Yet they still will not raise them to what should be around the $20 – $24 / Hour range (starting at a high school level education). The world global economic system is about to IMPLODE!