Is Our Economy Ready for the Future of Employment?

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The Pew Charitable Trusts and the W.K. Kellogg Foundation, in partnership with the Senate Economic Mobility Caucus, hosted an event on July 24 to explore how technology and the movement toward a knowledge- and service-based economy are affecting employment. The discussion, which was moderated by Kellogg’s Jonathan Njus, highlighted a diverse set of perspectives—examining Americans’ attitudes about the job market, the growing interest in alternatives to higher education, and the status of economic mobility.

Kim Parker of the Pew Research Center (PRC) opened the event with an overview of the center’s 2016 report, “The State of American Jobs,” which examined how Americans are responding to changes in jobs and opportunities in the digital age. Parker noted that job growth has been high in occupations requiring more education and preparation but far less robust for those relying on physical and manual skills. She also noted that workers have responded to this shift: In the PRC report, 54 percent of survey participants said it will be essential for them to receive training and develop new skills throughout their careers, and 72 percent said individuals are responsible for obtaining this training themselves. When asked about education, respondents placed more responsibility on primary and secondary school than higher education for preparing workers for jobs; only 16 percent believed college adequately prepares people for the workforce. Survey participants said technological fluency, communication, and interpersonal skills will be workers’ most important attributes in the future.

Maureen Conway of the Aspen Institute noted that today’s workforce is less economically secure than were past generations, in part because income volatility and wage stagnation make it more difficult for workers to save and keep up with expenses. She argued that unemployment insurance and other benefits intended to help workers navigate financial challenges are outdated and that older business models have not adjusted to today’s workforce. Conway further suggested that job training programs can play an important role in addressing issues of equity and inclusion in local labor markets but are only part of the answer for workers facing employment instability. Although quality programs provide workers with new skills and may help some workers get new jobs, they cannot change a region’s job market and so may not be scalable solutions.

Scott Winship, a Washington, D.C.-based expert on social policy, took a different view from the other panelists about whether income growth has become stagnant and is limiting economic mobility. He suggested that contemporary fears about “technological unemployment”—job losses resulting from automation and other advances that increase productivity and reduce the number of workers—are potentially misplaced and echo previous generations’ concerns about the impact of new technologies on the workforce. Instead, Winship argued, productivity growth and job turnover rates remain low, and the idea that technological unemployment is occurring is not supported by evidence. He also characterized the contemporary U.S. workforce as structurally similar to that of previous generations and cited research showing that median hourly compensation was at an all-time high in 2009.

Kosar Jahani of Samaschool, a program of Samasource, presented a perspective on how low-income workers are engaging with the changing employment landscape, particularly the increase in contract or freelance work commonly referred to as the “gig economy.” The Samaschool program teaches low-income workers about personal branding, financial literacy, and career planning skills, and is based on the hypothesis that participants will be able to use gig work as a bridge to full-time employment. Jahani observed that the average age of trainees in the program is rising and that traditional education programs are not prepared to handle the pace at which students will need to acquire skills in the future. Through the Samaschool program, Samasource hopes to gain a better understanding of how low-income Americans can be prepared for future shifts in the workforce.

Toward the end of the event, the panelists offered their thoughts on policy solutions while also noting that many factors contribute to economic mobility. Several themes emerged from this discussion:

• Jobs and opportunities are changing in the digital age, and training programs must adapt. Parker indicated that people believe college provides them with personal and intellectual growth but not necessarily the skills needed to earn higher wages. Jahani noted that future job markets will require workers to learn new skills faster than ever and that training programs have not adjusted to accommodate these new demands. Conway added that a lack of communication between employers and employees is harming workers’ ability to ascertain which skills will make them most competitive in the job market.
• Technology and other innovations have the potential to reshape the workplace. Panelists agreed that technology will shape access to opportunity for job applicants and the future of employment. Jahani observed that employment programs that leverage the gig economy must be attractive to low- and high-income workers and that technology can help create universally appealing solutions. Parker added that although PRC research shows Americans take a generally positive view of technology, they are concerned about the impact of automation and believe that it could disrupt or change the job market. Winship said that, in addition to technology, other new programs may help extend capital to populations that have historically lacked access to it, such as through income share agreements, an alternative to student loan models in which organizations invest in students’ education in return for a percentage of future income.
• No single strategy can increase economic mobility. The experts had widely varying views about which strategies are most effective for improving economic mobility. Conway described the potential of portable benefit accounts, which are not tied to a specific job, as one option for improving employee mobility and providing structured benefits for gig economy workers. Winship took a broader view, noting that productivity increases generated by corporate tax reform and high-skilled immigration may increase economic growth and mobility. Panelists further underlined that policy solutions may look different in rural versus urban areas because of distinct regional needs and that local, state, and federal governments each have a role to play in navigating the future of employment.

Sarah Sattelmeyer is an associate manager and Brian Denten is an associate with The Pew Charitable Trusts’ financial security and mobility project.