“Oh people, look around you. The signs are everywhere. You’ve left it for somebody other than you to be the one to care.” Jackson Brown wrote those lyrics to “Rock me on the water” (click to hear Keb Mo sing it) about 50 years ago. Today his words seem to haunt our future as much as they did our past.
There are more than 7.5 billion of us humans and our numbers continue to grow. Who cares about the unintended consequences of our collective actions? Our individual choices about economics, environment, health and other questions seem to be our personal business until we consider their collective effect. Continue reading WILL YOU BE FIRED?→
“The economy must serve people, not the other way around.” That is the opening sentence of the US Conference of Catholic Bishops’ statement “The Dignity of Work and the Rights of Workers“. Regardless of your religious beliefs, I encourage readers to look it up on the internet. It’s easy to understand the values being taught but challenging to apply them in our lives, businesses and government. Continue reading THE ECONOMY MUST SERVE PEOPLE→
The average life expectancy of white Americans age 25-54 declined between 1999 and 2014 because of a rapid rise in premature deaths from drug overdoses, suicides, and cirrhosis associated with alcohol consumption. The death rate from drug overdoses among 25 -34 year old whites was five times higher in 2014 than in 1999. It tripled among 35 – 44 year olds. By 2014, the overdose death rate among whites was double the rate for blacks or Hispanics. Although whites still live longer, the black-white gap closed considerably because of the premature white deaths.
CLICK GRAPH to enlarge and see changes in drug overdose death rate by race.
The rising death rates are heavily concentrated among whites without college degrees. Rural areas and small towns of the Southeast, Southwest, and the Midwestern “rustbelt” have been especially hard hit.
Why are so many white Americans killing themselves with drugs, alcohol and guns? (Almost half of all American suicides are by gun.) The most common hypothesis among researchers is that these are “deaths of despair” among Americans who no longer have hope for a satisfactory future.
The white labor class may be suffering so much despair because they are just now experiencing what the black labor class, unprotected by labor unions and discriminated against by employers, have known from childhood. They can’t pay their way into the middle class. In many cases their marriages have failed and their families have shattered under the stress of economic pressures. Many lack the literacy skills, time and money to pursue better opportunities. They see little hope for themselves and their communities.
Our economy will use the least expensive combination of machines, computers, and people to produce goods and services. Then it will sell those goods and services in exchange for more money and repeat the process. In that environment, it is up to each individual to find a way to succeed. Otherwise, the economy will find you to be expendable.
Blame is irrelevant. The important question is, “What future will we choose to create?” The replacement of human work with automation and artificial intelligence has barely begun and no one knows how rapidly it will accelerate. A report by PWC, an international consulting firm, says that 38% of American jobs are at high risk of replacement by automation in the next 15 years.
We shouldn’t even try to stop the trend, but we do need to prepare for it. Public education must be redesigned to prepare every student for life-long learning at the college level. Parents and communities must encourage and support it because jobs with good wages will require continuous learning at that level. Even if manufacturing returns to the US, the old jobs will not accompany it. There will be far more automation and the new jobs will require skills that few of us have today. In addition, minimum wage, healthcare, and other public policies must be sufficient to support viable families.
As we envision our futures, it’s good to remember Jackson Browne’s line, “You can dream but you can never go back the way you came.” We can create a good future, but it won’t be the same as our past. We must not sacrifice another generation of Americans by preparing them for a future that won’t exist. Instead, we should prepare them for hope and success.
Today I’d like to introduce you to SAM. His full name is Semi Automated Mason. SAM can lay as many bricks as three human masons. He has only one year of experience and will become more skilled and productive as he continues to learn. On the other hand, SAM could become unemployed when on-site 3-D printing of walls becomes feasible. It’s being tested now.
SAM’s story is important because it exemplifies a worldwide trend. We are still in the early days of an economic and social upheaval that will be bigger than the industrial revolution; and we’re not prepared for what’s coming. An Oxford University study identified jobs most and least likely to be replaced by automation. Looking at the list, it becomes apparent that some among us will benefit from less expensive products and services produced through automation while others lose their jobs.
It’s going to happen regardless of what presidential candidates promise about creating jobs or trade treaties. Even in China and undeveloped nations, automation is faster and cheaper than human labor. That is true in the production of both “things” and services. Human operators for elevators and long distance phone calls were displaced a long time ago. Soon automation will replace us in jobs as diverse as loan officer, manicurist, and drivers – not just drivers of taxis but also of trucks and buses.
In economic terms, this revolution means that fewer people can produce more goods and services. The total amount of wealth available will increase. Some of us will benefit from that but those who are replaced probably won’t. If you’re old enough to remember it, think of what happened when mechanized agriculture drove down the cost of eggs, milk, corn, cotton and other products. They became cheaper while previously successful farm families were devastated by agribusiness competition. Today we can see entire communities and families that are no longer self-sufficient because their jobs are gone.
The much-talked-about decline of the middle class is not primarily caused (and won’t be fixed) by tax or trade policies. Instead, it is caused in large part by technologies that are cheaper and more productive than human labor. This inevitable change brings opportunities along with threats.
What then, shall we do to prepare ourselves?
Know the facts. It’s particularly important for elected officials, educators, economic developers, city planners and business leaders to correctly anticipate the future and plan for it. News media can improve public knowledge by researching and reporting on these subjects.
Understand the education and skills that will be necessary for success in the future economy. I cringe when I hear someone say that, “not everyone needs to go to college.” The statement is true of course, but it masks a more important truth. Successful people will need to be able to learn at the college level. Change will come at a pace that requires continuous learning of new information and skills. The ability to read and learn at the level expected of a college freshman will be necessary for success in skilled trades, health occupations, and just about any field we can imagine. It is a great disservice to children and parents to lead them to believe that they can succeed with less.
Prepare community and regional infrastructure for success. For example, gigabit internet service will be more important than highways and railroads. An increasing number of businesses require high-speed and high volume internet service at all of their locations. That’s often true of small startup businesses and may be true for in-home education opportunities. Communities that lack gigabit service may be left behind as badly as those that lacked electricity, roads or railroads a century ago.
Re-design public education and libraries to support lifelong learning so that all of us can continuously acquire new knowledge and skills as we need them, regardless of our economic status or geographic location. We can discover ways to use the internet to deliver our finest instruction and most complete information to every American.
Issues of this kind should be on the agendas of national, state and local governments. Instead we are arguing about voter IDs and bathroom privileges. I don’t know all the answers, but I’m sure of one thing. The people who find the right answers will be the ones who are asking the right questions.
When the Randolph County Commissioners decided to develop an industrial megasite, I was cautiously optimistic because they are attempting to create much-needed economic and job growth. Today it is alarming that our usually fiscally conservative Commissioners have committed $10 million – essentially all of the money available for economic development projects – without adequate planning. Continue reading ECONOMIC DEVELOPMENT AND OUR INDUSTRIAL MEGASITE→
This is a column written for publication in the Asheboro Courier-Tribune – relevant for Piedmont Triad readers and perhaps for others living where industrial megasites are under consideration.
“If you don’t know where you want to go, you’re likely to wind up someplace else.” – Yogi Berra, baseball philosopher. The attribution of the quotation is questionable, but its wisdom is beyond doubt.
We know the trajectory and history of our local economy and we know that the work that has sustained our families and communities has been disappearing. We lost thousands of jobs to automation and to places where labor is cheap. The reasons are simple. Private capital flows to ventures that produce high profits. Profitability is improved when expensive labor is replaced by automation or when work is moved to places with cheap labor. The good news is that we get to create our own future. Continue reading OUR FUTURE AND OUR MEGASITE→
The world and our nation have permanent underclasses – people with little wealth and few opportunities for education or upward mobility. Their attempts to draw attention to their needs are often met with contempt or repression. Continue reading WE CAN END PERMANENT UNDERCLASSES→
The decision by North Carolina’s governing Republicans (every single one of them) to reject Medicaid expansion will cost the state’s residents $37 billion by 2022. That is roughly enough money to run the entire state government for 21 months. They looked at the money and just said “no”. They looked at uninsured people living in poverty and just said “no”. They looked at hospitals and doctors who care for uninsured people, and they just said “no”. And they just said “no” to unemployed workers who would have found jobs in the Medicaid expansion. Continue reading JUST SAY YES TO MEDICAID→
What if our economy could grow so rapidly as to greatly increase the amount of money, goods, and services that are available – a good thing, right? What if one result of that growth is that the future economy has no place for you – not so good? These are more than hypothetical questions for millions of people around the world. Businesses are making more products with fewer employees and lower wages. In the US, corporate profits have doubled since 2000 but inflation adjusted household income has dropped from $56,000 to $51,000. After tax corporate profits are up from 5 percent of American GDP to 11 percent – a record high level. Simultaneously employee compensation has dropped from 47 percent of GDP to 43 percent. Continue reading THE ARTIFICIAL INTELLIGENCE ECONOMY→
If you want to know what is important to people just read their checkbooks and credit card bills. They are far more enlightening than press releases or diaries. The same is true of political parties. After about seven months of total Republican control, the values of that party’s leaders have become apparent in their tax reform law and their budget.
They eliminated the tax on estates of over $5 million so that the wealthiest North Carolinians will no longer pay it when tens of millions of dollars are passed from one generation to the next; and they reformed the income and corporate taxes so that those with the highest incomes will pay less than in the past. They are sure that they reduced the State’s revenue but they are not sure by how much. Good government requires matching tax revenue with necessary spending.
After reducing the state’s income they announced that they did not have enough money to budget a salary increase for teachers. Our teacher salaries were already extremely low and may well be the lowest in the nation after another year with no adjustment. Most state employees were treated little better. Republican leaders did not consider the state’s financial obligations and the needs of our schools before they cut taxes. That is not good government.
Probably the most troubled department in State Government is the Department of Health and Human Services which is responsible for Medicaid, all of our mental health services, and many other programs. To lead this critical area, the Governor picked Dr. Aldona Wos, a physician who has not been involved full-time in health policy or medical practice for many years. She is very wealthy and has been among the largest fund raisers for former President George W. Bush and for Governor McCrory in both of his campaigns for governor. President Bush rewarded Dr. Wos by appointing her as Ambassador to Estonia. Likewise, the Governor made her DHHS Secretary and she hired a young McCrory campaign staffer, Matthew McKillip, as the Chief Policy Officer of DHHS. At age 24, he has no previous health service education or experience but he has worked for a right wing think tank and now he is leading health policy development for the state.
After only a few months on the job, he has received a 35% salary increase. That is just one example of large raises for campaign supporters while there is nothing left over for teachers or other public employees. How might those other employees feel about this?
Republican leaders said that the state does not have enough money to maintain the unemployment compensation program so they cut the maximum monthly benefit by 35% and cut the maximum length of benefits from 26 weeks to 20. As a result of the change, we lost eligibility for over $700 million in federal funds intended for North Carolina’s unemployed workers while our unemployment rate remains one of the highest in the nation.
Then they turned down the Medicaid expansion which would have been totally paid by the federal government for the first 3 years and would have been over 90% federally funded thereafter. That expansion would have covered most of our low-income working people at federal expense. Through 2019 it would have brought $15 billion federal dollars to the state and created 25,000 new jobs (mostly in the private sector). That would have helped mightily with our unemployment problem. Our middle class and poor will have to pay the federal taxes to fund the expansion but we won’t get the health care or the jobs.
The inescapable conclusion is that the Governor and legislative leaders think it is more important to cut taxes for the wealthy than it is to provide health care for low income workers and fair salaries to teachers. You can read their values in the state’s checkbook. This is particularly sad, because these are not the values of most North Carolinians; and many Republicans also disapprove. Some must be wondering how their party got away from them. In retrospect, the answer seems to be that a few very wealthy people not only bought the election with incredible amounts of spending; they also bought the soul of a once proud political party. It’s quite a set of values: Take care of your wealthy donors and reduce their taxes then pay for it by denying fair wages to teachers and other public employees and by cutting back on the public education and health services which would help the poor improve their earning power. They may preach family values but support for families is not written in their checkbook.
After doing such things, the only sure way to stay in office is to prevent those who disagree and those you have harmed from voting. That is a subject for another day.
