Too late to reindustrialize
We are in the midst of a societal and economic revolution as fundamental as the industrial revolution. The office is replacing the factory as the center of our economic lives. The demand for office workers is outstripping the supply. In just 30 years, the American workforce has changed from mostly blue-collar to mostly white-collar. We haven't seen anything like it since the last century's great migration from the farm to the factory. The number of Americans employed in the industrial sector is falling sharply.
At the same time, the number of people in the information sector of the economy is rising just as sharply. In fact, three-quarters of our national work force now collects, manipulates, and disseminates information.
I wonder why it hasn't occurred to any of us - in government, industry or academia - that we are trying to reindustrialize what is no longer an industrial society. We are talking about putting people back to work in our factories when the factory is being replaced as the underpinning of our economy.
Right now, 22 percent of our workforce is employed in manufacturing. That figure will drop to below 10 percent by the mid-1990s. I'm not saying we don't need more modern plants, better technology, and more productive factories. I'm saying that the automated factory of the future - with functioning robots and computer-assisted design and manufacturing - isn't going to provide enough jobs for the people who want them.
To give you just one example, General Motors says that within five years, computers will control 90 percent of their production machinery.
Let's face it. Automation does eliminate jobs. But automation does not put people out of work. That's an important distinction. The jobs automation eliminates are old jobs in old sectors. Automation creates new jobs - and more of them - in new sectors of the economy.
It's true that the automobile, textile, and steel industries have lost thousands of jobs - at least, in part, because of a shift to computer-based manufacturing. But it's also true that thousands of other jobs in data processing, accounting, and word processing are going unfilled for lack of trained people. Those jobs are in new industries using new technologies - not old ones.
There's a lot of talk these days about unemployment, which, I'll concede, is way above acceptable levels. But it bothers me that nobody is saying much about the other side of the coin - and that is employment. I wonder how many people know that our economy is generating jobs for a near-record number of working-age Americans.
Today, the employment rate is 57 percent. That's only two percentage points below the all-time high we had in 1979. What's more, 30 years ago - when the unemployment rate was only 2.5 percent - the employment rate was actually lower than it is today. So there's more than enough work to do in this country. The problem is matching the workers with the work.
As manufacturing becomes more automated, workers will have to shift to new jobs in the information and service sector. That includes banking, insurance and real estate; hotels, restaurants and airlines; medicine, law, and engineering; data processing, publishing, and broadcasting.
During the past decade, the information and service sector grew an incredible 365 percent - more than six times faster than manufacturing. Today, 7 out of 10 American workers are employed in that sector. It's expected that it will continue to grow and generate new jobs. And most of those jobs will require special skills.
The Federal Bureau of Labor Statistics just did a study on the fastest-growing occupations during the next 10 years. The study found the greatest demand will be for computer and office machine service technicians, computer programmers and computer operators.
It's clear that our economy has to shift from old industries to new industries. It's clear that our workers have to shift from old skills to new skills. It's also clear that reindustrialization is not the best way to do that.
Reindustrialization focuses on the past, ignores the present, and discounts the future. We have 10 million people out of work in this country today. Most of them are in industries that are permanently losing jobs to automation, foreign competition, and an ailing economy. That means a lot of people who used to make cars will never make cars again. A lot of people who used to make steel will never make steel again. And a lot of people who used to build houses will never build houses again.
Some economists say many of those displaced workers won't make the transition from manufacturing to service industries, from blue to white collar worker, and from clerical to knowledge worker. They say we may well find ourselves with a lost generation of workers whom we can neither retrain nor absorb. I don't believe that. I believe a good number of those workers can be retrained.
The question is, by whom? Budget constraints are forcing the federal and state governments to pull back in most areas; private industry is hampered by shrinking profits; and our universities are struggling to stay solvent.
So, who's going to do it? My feeling is that private industry should take the lead, because it knows best where the jobs are and what skills are needed to do them. It also has the largest and most experienced training system. Certainly , it will need help.
Government can help by offering tax incentives and other incentives for training programs. Universities and vocational schools can help by adjusting their curriculums to meet the needs of the job market.
But we've got to do it together. The writer and economist Lester Thurow says that you can't build a high-quality economy with low-quality components. Yet, he says, that's exactly what we're trying to do with the most important component in our econonmy - the quality of the workforce.
Last year, American business and industry spent about $35 billion on education and training for its employees. Some experts say that the average lead time on retraining is 10 years.
We are the only industrial country that does not have a national manpower strategy. I don't know if we need a formal poicy. But it seems to me that we can start managing this change by recognizing that it's here - now. It's going to take a change of focus from unemployment to employment. And it's going to take the realization that retraining - not reindustrialization - is the answer.