Time to Start Thinking: America in the Age of Descent
By Edward Luce
Atlantic Monthly Press
Marlin Steel Wire Products President Drew Greenblatt calls it a skills matrix.
Author and Financial Times columnist Edward Luce wonders if some workers see it as a Doomsday Book.
For Hamilton, it could be our blueprint for prosperity.
Marlin makes precision steel-wire baskets from an industrial park in Baltimore.
The skills matrix is posted on a wall outside the shop floor for all to see. Each of Marlin’s 30 employees is listed on the chart’s horizontal axis. On the vertical axis are 28 skills. Employees earn up to five points for each skill they learn. Some employees have more than 100 points. Some have less than 10.
“I would be worried about my future if I was him,” Greenblatt says about a low-scoring employee on the matrix.
“The exercise sounds brutal,” says Luce. “But it is also realistic. Basic skills are no longer enough to keep you in a decent job in America. You have to keep climbing the skills ladder.”
If employees miss the message with the skills matrix, in the middle of the factory is a $700,000 robot that makes 431 wire rings per minute.
When Greenblatt bought the company in 1998, most employees had low skills. Today, a quarter of the workforce has postgraduate degrees mostly in manufacturing design. “When I took this over, there were a lot of men on the shop floor with big biceps,” Greenblatt says. “Now it’s robots and people with skills.”
Between 2000 and 2009, America lost five million manufacturing jobs. Manufacturing now accounts for less than a tenth of private sector employment and the jobs remaining are high-tech and high-skilled.
“What few manufacturing jobs are likely to be created in the United States in the coming years will be largely for highly educated people, those who have acquired knowledge that cannot be learned on the job, such as robotics, advanced engineering or biochemistry,” says Luce.
The loss of middle-skilled manufacturing jobs is hollowing out the economy. At one end are low-skilled, low paying jobs largely in the service sector. At the other end are high-skilled, high paying professions. Luce cites MIT economist David Autor who says the economy will increasingly require people with either very high skills or very few.
Accelerating the shift to low and high-skilled jobs is the rising cost of hiring full-time employees. Luce says it’s no coincidence that those costs and the average duration of unemployment in the U.S. are both reaching European levels.
Climbing costs are forcing employers to move in one of two directions. “One group, typified by the big box retailers, keeps most of its labour force casualized to avoid the overheads that come with hiring full-time employees. The other large category of employers, which includes America’s more competitive manufacturers, are aiming for fewer and fewer employees, who, in turn, will need to have increasingly impressive qualifications.”
So here’s why you want to stay in school, go back to school and get as much training, education and professional development as you can. Even with high unemployment, finding skilled employees with those impressive qualifications is a challenge. “In 2011, there were still five unemployed people for every job available,” reports Luce. “Yet American businesses in 2011 reported more than three million job openings they have been unable to fill because of a skills shortage.
“Unless America can sharply boost the proportion of its workforce that is skilled – whether from college or vocational studies – a growing share will face the probability of spending their lives in low-paid work. The structure of the U.S. economy is likely to continue to bifurcate in troubling directions. The middle is likely to get only lonelier.”
Luce is not overly optimistic that our neighbour and largest trading partner can stop, much less reverse, its economic and geopolitical descent. “America is losing its ability to tackle problems.”
Here in Hamilton, building a highly skilled workforce may well be our one and best shot at remaining a prosperous city that continues to make things like advanced steels and health science breakthroughs.