It seems to me….
“Over a long period of time, technological change is something that has been important in reducing manufacturing employment – absolutely and as a share of jobs in the economy.” ~ Janet Yellen.
Forty years ago, nearly 60 percent of U.S. teenagers were working or looking for work during the peak summer months. In 2016 only 35 percent were. Preoccupations of the heavily scheduled school year – college preparation, organized sports, volunteer work – are also determining what one does on summer vacation. Summer school, once seen as a punishment for laggards, now functions as an academic accelerator; 40 percent of 16-to-19-year-olds were enrolled in school in July 2018 according to the Bureau of Labor Statistics (BLS). It’s work that may not produce wages, but certainly counts as an investment and, from the perspective of long-term returns, quite possibly the most efficient use of their time. As the BLS says: “Teen earnings are low and pay little toward the costs of college”. The competitive college process, which has put a premium on students’ extracurricular and volunteering work, incentivizes this behavior. The National Honor Society, for example, has quotas for volunteer work.
Jobs historically done by vacationing students are being taken by older Americans forced to extend their working lives or foreigners taking advantage of an opportunity to work in the U.S. Less affluent older workers are indeed delaying retirement and taking part-time jobs in fields like food preparation where teen employment has decreased.
This is symptomatic of only some of the changes we currently are experiencing.
Statements made by many politicians regarding the decline in manufacturing-related employment opportunities are at best misleading and often incorrect. The problem is admittedly real but no longer primarily the result of outsourcing to other countries. The decline in those types of occupations, which mostly involved low-level repetitive tasks, originally were less costly for corporations to move to other countries rather than to leave here in the U.S. and automate. Subsequent wage increases in China and other Southeastern Asia countries have resulted in employee costs becoming a higher percentage of product price and consequently making offshoring a less viable alternative.
Advances in automation and computerization have now resulted in shipping and transportation related costs becoming the primary determinant of manufacturing location. Two opposing forces are now shaping those decisions. A relatively high percentage of products once produced overseas are increasingly being manufactured in closer proximity to their point of sale regardless of originating country. Another consideration is that most countries require a percentage of products marketed within that country to be manufactured in that country – if you want to sell there, you have to make it there.
The postindustrial society is redefining the traditional occupational dependencies of the middleclass. In place of manufacturing jobs that previously did not require more than high school graduation, new opportunities increasingly require either a college degree or completion of a certification program; e.g., paralegal, medical technician, computer technician….
A clothing manufacturer relocated back to New England from China. Prior to offshoring, it had employed over 300 employees many of whom had not completed high school. Now back in the U.S., they have doubled production and have less than 22 employees. Many of those positions now require a college degree or, at a minimum, an associate degree.
This is rapidly becoming the new norm. As traditional middleclass jobs have been eliminated, many of those former workers having only completed high school move down in the labor market replacing lower-income workers even less educated. Today, high school graduates who have never gone to college are four times more likely to drop out of the labor force than they were in 1964. Everyone is personally responsible for keeping themselves employable. This entails life-long learning.
The U.S. has an employment problem; there currently are many more employment opportunities available than there are qualified prospective applicants to fill them. The vast majority of those positions, however, require a college degree but only about 39.9 percent of Americans have completed college. There were an estimated 667,200 STEM-related job openings in Q4 2014 in tech and non-tech companies and that number has only continued to increase since then. If this gap between the vast number of technical job openings and the lack of college graduates with technical degrees to fill them persists, an increasing number of companies unable to hire a sufficient number of qualified employees will have little alternative other than to transfer much of their research and development efforts to other countries.
High-tech is not the only area experiencing a lack of available labor. At the other end of educational scale, in response to the diminishing supply of immigrant labor, the U.S. agriculture sector is increasingly turning to robots that can do work traditionally performed by humans. While it remains difficult to replace the human eye and hand when handling delicate produce, further use of robots and other technology is the only viable long-term option available to the agricultural sector.
In the 20th century everything became large scale – mass production, mass marketing, and mass consumption – but this century will reverse those trends when ubiquitous virtual personal agents, affordable additive manufacturing (3D/4D printing), and digitization of everything prevails.
It took about a century and massive labor disruption following the industrial revolution for governments to provide basic universal K‑12 education. Now, when K-16 has become the basic level of necessary education, it has effectively been placed beyond the economic availability of most students. We no longer have any option to delay providing universal cost-free college, vocational school, or specialized certification training/retraining to everyone qualified. Unfortunately, increasing economic inequality has become an additional major problem – the Gini coefficient is in a range not experienced since the 1920s and frequently associated with civil strife. Opportunity and social mobility have become extremely difficult for those from families with lower incomes. While the U.S. has a number of economic problems; this is certainly one of the most critical.
The percentage of employed males (over 86 percent) in the U.S. between the ages of 25-54 as of 22 January 2019 has decreased 8 percent in the past 50 years. Around 7 million American men, who have been disproportionately affected compared to women, primarily between those ages, mostly too old to be in school and too young to retire, are no longer either working or looking for work. That amounts to 12 percent of all men in those prime working ages – and that doesn’t count another 2 million who are looking for work but have been unsuccessful in their efforts. The set of long-term unemployed consists primarily of the less educated lacking relevant skills, never married, without children, and African Americans. This percentage of working males is now lower than in most other developed countries and less than in 1940 following the 1928 depression.
The day is approaching when the majority of people not requiring direct contact with people will be able to work from any location on Earth and totally avoid the daily necessity of commuting to work. While increasingly possible, that day has not yet arrived for the majority of workers. Alternatively, there are those within our society that desire to turn back the calendar and once again have us driving a horse and buggy. The inevitable culture conflict is between them and those who look forward to driving an all-electric fully autonomous vehicle.
That’s what I think, what about you?
 Janet Louise Yellen is a U.S. economist at the Brookings Institution who served as a past Chair of the Federal Reserve. Previously, she was President and Chief Executive Officer of the Federal Reserve Bank of San Francisco.
 Vick, Karl. Where did America’s Summer Jobs Go?, Time, 10/17 July 2017, pp52-59.
 Dvorkin, Maximiliano A., and Hannah G. Shell. A Cross-Country Comparison Of Labor Force Participation, Federal Reserve Bank of St. Louis, https://research.stlouisfed.org/publications/economic-synopses/2015/07/31/a-cross-country-comparison-of-labor-force-participation/, 31 July 2015.