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American workers in a global economy

Prof. Peter Morici - 9/28/2009

Breakthroughs in electronics, biochemistry, and other industries, and sweeping changes in global trade are creating two American economies -- one prosperous, another poor. This radically alters what workers need to succeed and Washington should do to help.

Most high-paying jobs are created by industries that churn out lots of new products and services -- iPhones, Xboxes and esoteric financial contracts. Creative industries design here, sell a lot abroad and manufacture little in the U.S. They create the big-paying jobs and young millionaires.

Meanwhile, imports of consumer goods, often subsidized by China and other Asian governments, are closing U.S. factories and destroying jobs in manufacturing and supporting industries. Throughout the economy, the Internet has unleashed punishing competition on journalists, lawyers, and other professionals. Workers endure constant pressure to cut wages and benefits, work more and boost productivity.

Young people and established workers must move to the creative industries to have a decent shot at prosperity but often this requires precise technical skills -- engineers and IT specialists, cinematographers and animators, chemists and lab technicians, and financiers and accountants.

New technologies constantly create new opportunities but also destroy large established businesses, often at a lightning pace. Consider how digital photography ravaged Polaroid.

Few high school graduates will ever again be able to enter a factory and learn a succession of skills to obtain better-paying jobs.

To get a good job and then stay prosperous, young people and workers in transition must acquire technical skills in high demand, and then apply old skills to new purposes, retraining and finding new employers as the marketplace ruptures.

For college grads, ambition and a liberal arts degree are not enough. Economics and English are out -- finance and engineering are in. But universities populated by comfortable tenured faculties, and protected by state tax dollars and endowments, don’t adequately embrace professional education, fail to advise students honestly, and are not much interested in effective continuing education.

With 150 million workers, the U.S. cannot create enough good jobs in the creative industries alone to provide everyone with a decent future. Manufacturing and its supporting services must survive too.

Other than promoting green industries with limited potential, and vague talk -- but no strategy -- about boosting exports, the Obama administration has not offered much to manufacturing. It refuses to adequately confront subsidized Asian imports that subvert the competitive advantages of U.S. workers. Instead, he proposes to raise taxes on the wealthy to subsidize workers who are losing ground and increase state and local government jobs.

Mr. Obama should talk honestly to Americans about lifelong learning and personal responsibility for managing careers, to governors about requiring universities to teach more about creating products and less about writing poetry, and to Congress about trade policies that help American manufacturers capture an adequate share of global markets.