United States, 1990, a debate was brewing about an alleged bottleneck in the generation of a qualified workforce, prepared for the challenges of the “knowledge-based economy”. Organized around the National Center on Education and Employment, a commission of Democrats and Republicans published a report that would give people something to talk about: America's Choice: High Skills or Low Wages. It is available at: http://www.ncee.org/wp-content/uploads/2013/09/Americas-Choice-High-Skills-or-Low-Wages.pdf.
The report warned that workers with “new skills” would be essential to increasing productivity and pulling the American economy out of a predicted disaster. Evidently, the statement assumed that the decline in productivity recorded in the previous decade was due… to the absence of such “skills”. . Interestingly, in the years following the report there was significant growth in productivity, using the same workforce disqualified by the report. The discrepancy did not surprise the commission, which years later published a study with a similar tone and recipes (Tough Choices, Tough Times), available at http://www.ncee.org/wp-content/uploads/2010/04/Executive-Summary.pdf .
The “tough times” continued to limit the “choices” and the commission continued to struggle with reality data. If these clashed with the convictions of the “experts”, so much the worse for the data.
The Commission's argument is somewhat contorted and worth a closer look. She begins by saying that, in the form of labor organization that prevailed in the USA at the time – Taylorism – most workers did not need to be educated. She was trained. But, once I diagnosed declining productivity, that needed to change. They warned that a workforce bottleneck was not yet blatant because the American economy was relatively and temporarily protected from the globalist storm.
But that was a bad choice, a country based on low wages, low productivity, low skills. To make the other route viable, that of the country of high skills, contemporary with the new industrial revolution underway, another workforce training system would be necessary. Unfortunately, they said, this clashed with America's poor school-to-work transition system. It was necessary to improve the situation, especially for “non-college bound” students, that is, for those who did not and would never reach higher education, the famous “forgotten majority”.
In 2007, the commission, with the reinforcement of new experts, issued a new ruling: the previous trends were now confirmed and accentuated. Globalization was no longer a wave, albeit a strong one. It turned into a tsunami.
American companies – traditionally organized in the form of vertical manufacturing integration – entered another phase, one of “disintegration” or “reengineering”. The conviction is widespread that the “lean” and dynamic company, suited to the new times, should concentrate on its nuclear activities (the “core” of the company) and on subcontracting suppliers of components and services, the outsourcing. Chains, chains, chains.
Alongside outsourcing and the relocation of industrial plants, automation arrived to disrupt occupations and jobs. The most routinized aspects of the work could be converted into codes and these could be embedded into equipment. Thus, multitudes of well-paid jobs, responsible for the formation of the famous American working “middle class”, would be destroyed by computerized gadgets. Not only mechanical lathes would become obsolete. Also back-office occupations, which can be routinized and automated.
And what to do with those “non-college bound”, with little education and poor training? The expert commission's solution is a package of reforms.
However, this change has to be profound, it can be expensive, it is a change in a system, not in elements of the system. The Commission even outlines a change in the entire design of the American educational system, the sequence of schools (elementary, secondary, higher) and the passage of students through the different levels. The report is from 2007 and, at least for now, no such changes have been observed, except those that were already being experimented with, the privatizations that had already taken off since the Reagan administration.
The reader who examines these documents, integrating them into the economic history of the post-war United States, sees numerous credible points, but an articulation that leaves something to be desired. A standout feature of the report is the stylized image in which it summarizes its view of the hierarchy of the economic world. See below:
Note this “division of labor” and the dates. The report is from 2007. Its forecast period (ten years) is closing. Does the compartmentalization suggested by this diagram make any sense today or is it just another of those “experts”’s fights with reality? If everything goes well, they say – well, set goes well...
The diagram records two worlds: the United States and the least developed countries. Apparently, it ignores the existence of, say, Germans, Japanese, Germans and Europeans, in general. And Koreans. And Indians. And Chinese. Unless all of this fits into the less developed countries.
The old joke goes that it would be necessary to combine with the Russians. Now, apparently, it would be necessary to combine all these less developed. When we look at the software industry in India we wonder what the hell it is doing in this scheme. And when we look at the avalanche of “Chinas”, things get worse. After all, in the caricature from some time ago, Chinese were those guys who made cheap trinkets, shoes and shirts. The “routine work”? On the date predicted by the report, 2017, it appears that this is not the case.
Let's leave aside Chinese companies themselves. Take, for example, the North American Motorola. It has invested more than 4 billion dollars in its Chinese plants since arriving there in 1987. However, a good part of these dollars went to R&D activities, not to “routine” production activities. In 2011, the company already had 10 thousand employees in Chinese territory, in 2011 – and more than 3 thousand worked in research and development. GE, says Harvard Business Review, is subverting itself by producing “reverse innovation” from its plants in China and India. With diagnostic medicine equipment, for example. In 2005, an Unctad report announced this movement. It is available online: World Investment Report 2005: Transnational Corporations and the Internationalization of R&D.
On the other hand, many American companies abandon this nationality, becoming “foreign”. In different ways. Motorola came under the control of Chinese Lenovo. But Apple is already a citizen of Cayman, without having been purchased by anyone. And hundreds of others followed the same path, not necessarily to the same island. Even the companies fast food, some of them based in Switzerland, near Darvos. In 2016, Barak Obama himself lamented the lack of “patriotism” of these corporations, which changed their passports and, of course, their place of taxation.
The world has definitely become much more confusing. As we said, few of the report's recommendations were adopted – with the exception of the most openly privatizing ones, something that was not born from this type of study nor does it depend on it. And its recipes for training the workforce, if they depend on forecasts, are even further from reality.
Only one thing seems certain and, unfortunately, still ignored: the non-college bound contained being the “forgotten majority”. They only serve as cannon fodder in election campaigns – they are Hilary's deplorables and Trump's scarecrows.
