Training to Adapt

May 2012’s 8.2% unemployment rate dampens hopes for the 14 million US consumers looking for work.  Some jobseekers are new to the marketplace, some are there due to decreases in sales, and some are displaced by offshoring-outsourcing or technological changes.  Retraining may lead to employment for some, but efficacy for displaced workers looks poor, so another approach may be needed.

Outsourcing-offshoring accounted for the loss of 3.5 million US jobs between 1991 and 2005, including 25% of IT jobs for companies with more than $5 billion in sales.  Also by 2005, another 9 million were “outside the US” employees of US companies.  Downward pressure on US employment follows each unsuccessful attempt to export.  Jobs lost to foreign workers usually trace back to an unfavorable combination of US skill and labor prices.

Technological changes are displacing US workers.  Assembly-line robots dominate automobile manufacturing.  Automated checkouts replace cashiers.  Interactive voice response systems replace customer support employees.  3-D printers displace machinistsPredator drones and IED defusing robots are more efficient and save soldiers’ lives.  A C-Path robot can beat oncologists in diagnosing cancers.  Robot pharmacies make fewer errors and can be cheaper than pharmacists.

Displacement shocks to laborers and professionals alike will continue undermining our expectations for “solid” career paths.  An ideal response would be to improve our ability to adapt.  One adaptation would be relocating to where the jobs are.  Only 1/3rd to 1/4th of the 3.2 million available job openings have failed to find applicants with the right skill.  But even if “retrained” applicants with the right skills were found and the other 2+ million openings were filled, 11 million would continue looking for a job.  And over a career, most of us will find ourselves unemployed.

For unemployment, a quick cure is a more vigorous economy, but in the long run, we need to outperform our trading partners.  That means continuing skills upgrades for all employees, just as professionals work for continuing education credits.  Courses should not be task specific, rather they should be foundations for adaptation.  Literacy, computer science, mathematics and science are easy to offer and improve competitiveness.  Those who recently suffered unemployment are likely motivated to participate in these programs, and others may see the value if participation lowered their payroll taxes.

Alan Daley is a retired businessman living in Colorado and who focuses on public policy from the consumer’s perspective.