Where Did All The Workers Go?

I watched a TED talk by Rainer Strack on the upcoming global employment crisis the speaker forecast for 2030. Looking fifteen years ahead, the demographics for the workforce in the top 20 nations of the world is already set, since those in the projection already exist. The projections of a workforce too small to meet the needs of the largest economies in the world seems unrealistic when we have over 5% unemployment and 8% of adults having dropped out of the workforce. Yet it is completely possible, based upon the speaker’s data and my own experience.

I witnessed the introduction of PTC’s Windchill simplifying and automating configuration management, document reviews and parts list management. While a program used to each have their own configuration manager, now one manager could run two or more programs. A few retired, while others were laid off. Improved IT automation via Microsoft’s server upgrades from 2003 to 2008 or 2010 meant you no longer had to change the passwords on several hundred servers manually – it could be done through a single tool interface. Add in real time IT management tools and proactive security measures, and the number of IT gurus needed goes down unless they can be redeployed to work on a backlog of projects. Fortunately or unfortunately, constantly changing hackers and endlessly evolving hardware means that there is fairly good job security in IT if you can stay on the front lines. For engineers who design products, there is work as long as you can make a better product, whether with less material, fewer parts, new features or less money.

Science is likewise relatively safe; the human genome project may be mostly completed, but proteomics, the study of how the proteins those genes produce and how they interact, will take decades to decode. Add in the genetic sequencing of thousands of other species, and science will continue to demand the same skill sets as today though the lab equipment and software will change.

What about those outside of the STEM skill sets? Medical, if seen as an extension of science, will never go away – you simply need to keep up with the latest advanced and treatments.

Two major problems were posed by Rainer Strack: the relative lack of workers of 15 to 65 and skill mismatch.

The talk identified several key solutions to the problem, ranging from immigration to job training to automation.

Automation

As an industrial engineer, I can see the rush to automation occurring, as it already occurs as labor prices rise. Close the border to illegal immigrants, and we’ll see the farmers who rely on migrant laborers automate the way corn and wheat farmers already rely on tractors and combines. China is already seeing a decline in manufacturing employment as a percentage of the workforce as they automate factories to replace masses of human beings. Quality of production goes up, while you decrease the need to shut down for human needs. The TED talk did bring up how the rise of automation may decrease the labor shortage while exacerbating the skill mismatch.

Reducing the need for bodies to do basic assembly, something someone with an 8th grade education could do, raises demand for engineers, mechanics and other skilled or college educated labor.

In short, automation reduces the body count in the short term but the skills mismatch in the long term. However, I expect automation to continue as a solution to the potential future labor crisis. In fact, automation will likely continue even if unemployment were to spike again, because of the overall cost savings automation tends to yield unless the work is inferior to that done by a person or humans refuse to accept machines doing the work.

Skills Mismatch

Skills mismatch is a term for the gap between the skills employers need and the skills potential employees have. It is exemplified with the jokes about liberal arts majors asking, “Would you like fries with that?” Simply earning a college degree does not qualify one for an office job, especially as automation moves into the back office.

But what about those with lower level skill sets? What do we do to employ those whose jobs are most easily automated on the assembly line? Despite the hype, not everyone is suited to college level work; in fact, only around half the workforce has the intellectual capacity to complete a four year degree of intellectual rigor. Much of the current trillion dollar student loan crisis is due to the push to get everyone a degree, though many cannot finish it, or to get a degree, any degree, regardless of the demand for the skill set.

A partial solution to the skill mismatch has already been proposed by Mike Rowe of “Dirty Jobs” fame. Bring back the skilled trades. Don’t send the average and below average kids to get useless liberal arts and ethnic studies degrees, often accruing thousands of dollars in debt you cannot discharge in bankruptcy. Instead, train them to be mechanics, CNC programmers, plumbers, electricians, machinists, welders, tool and die cast workers, CNC operators, computer hardware assemblers and so forth. This work is too complex to be automated to machines. And these jobs are too advanced to be done by someone walking in off the street. Bringing back the respect for the skilled trades and sending kids who would flunk out of college to a year of trade school to learn these jobs would go far to solving the skills mismatch.

What should be done for those whose knowledge work was readily automated, like the legal work that may be mostly done by AI in two or three decades? That’s a more difficult question to answer, and I won’t tackle it here.

Bringing People In Versus Outsourcing the Work

One of the solutions Ranier Strack identified to the lack of workers was immigration of those in the necessary age range. However, the demographic challenges this poses are immense, from higher costs to educate their children to the local language to second generation immigrants identifying with the extreme elements of their historical roots to the detriment of society, whether it is supporting La Raza (the Race) in the U.S. or Muslim immigrants in Europe attracted to ISIS and other terrorist organizations.

A more realistic solution to the labor shortage is one we already see today – global outsourcing in all its various forms. If labor is truly in short supply, the labor rates will rise. If automation cannot offset the labor demands, wages will rise high enough to encourage those without useful skills to spend a few years acquiring them. Or employers can move the assembly work, recycling and other tasks to lower cost locales. Textile work has been doing this for years, migrating from lower cost locale to the next cheaper locale. While computer chip manufacturing and electronics assembly is more expensive, such off-shoring and re-shoring will continue if labor is truly too scarce in the developed world.

Back office outsourcing has taken off since 2000, supported by the ocean-crossing data cables built to support the internet revolution. Whether it takes the form of talking to IT tech support in India or a call center in the Philippines or an accountant working from home in a rural corner of the U.S., the internet is going to further drive the distribution of work from high cost areas to lower cost ones. While managing a distributed workforce is complex, it will offset the labor shortages in developed nations.

Growing the Workforce

A solution Ranier Strack touched upon but did not serious address was growing the workforce by raising the retirement age. Life expectancy has been growing steadily worldwide for decades, now nearly double what it was a century ago. We’ve decreased the ravages of old age to some extent, such as replacing knees with artificial joints, installing pace makers, treating diabetes and dementia and so forth; in the process, we’ve added years of productive life.

Let’s set aside the social challenges of helping three and four generations share the same workplace. As industrial engineers, the challenge is retrofitting existing workplaces with elements of universal design. Universal design refers to the architectural style that suits everyone’s body type, whether suffering from a disability or the debilities we associate with old age. Widening doorways, installing lighting that permits everyone to see well, easy to user computer interfaces even those with arthritis or limited hand motion can use, and a hundred other changes will make it easier for those in their 60s, 70s and 80s to contribute to the workforce. We would decrease the labor shortage forecast by making it easier for many to work longer in their current professions.

The solutions for helping everyone work longer can benefit everyone, not just the elderly. For example, the patient lifts now becoming standard in hospitals allow one nurse to move a heavy patient without straining her back. Older nurses can still move patients with equipment like patient lifts, while younger ones are less prone to injury or need to work in tandem to move very heavy patients. Tools that require less effort to torque or use are easier for older users to utilize while reducing the risk of repetitive stress injuries among the young.

Computers used to require the equivalent to a PhD to run. Now kids can create games using simplified user interfaces, and someone with a little training and paying for the advanced functionality can publish games without coding to half a dozen platforms.

Industrial engineers and others involved in product design need to work to decrease the skill set required to use automation, so that we close the skill gap that will otherwise come with rising automation.

Summary

Just as mechanization allows 2% of Americans to work as farmers and feed the population and export food, automation in manufacturing and the service industries will more than offset the relative decline in the workforce due to an aging population. This will aggravate the skills shortage, but this is not an insurmountable problem because the skilled labor work automation doesn’t replace doesn’t require four more years in school to learn if we work to make it simpler, as well as faster and cheaper to use.

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