I wanted to look at the new BLS occupational data and apply it to Michigan specifically to make a few more guesses about how our state’s job opportunities will change over the next decade. (Because this is a blog post and not a term paper, I’ve made a few methodologically questionable choices in my analysis, but I’m just trying to get a general picture, so I hope the data nerds out there will please forgive me.)

The ALICE report for 2015 data listed the top 20 most common occupations in Michigan. I used this list as my way into this data. I pulled the expected national growth rates from the BLS data for each of these occupations and applied them to the number of jobs in 2015 in Michigan (essentially pretending that 2015 and 2016 numbers are the same). Then I organized the spreadsheet in different ways—by the usual education requirement, by median income, and by the growth rate. What I found is stark confirmation that we need to stop planning Michigan’s future as though it’s going to look like our past. Here are a few of the things that jumped out at me.

Four of Michigan’s top occupations have negative growth. Three of these occupations are actually listed on the BLS list of “fastest declining occupations.” These are all occupations that don’t require more than a high school degree. In 2015, we had 104,210 team assemblers. In 2026, if you apply the national growth rate, we will only have 91,080.

Only four of Michigan’s top occupations pay a median wage that is close to or above the ALICE “household supporting wage.” I really like this figure because we should be aiming for prosperity—not just for families to live slightly above poverty. Surprise, surprise: all four of these occupations require a bachelor’s degree. Also, all four of these occupations are growing at or above the national occupational growth rate issued by BLS (7.4 percent over the decade).

When I added up the job growth—just out of the top 20 occupations in Michigan—in each educational category, I found that jobs requiring a college degree will grow by 11.0 percent, jobs requiring a high school degree or less will grow by 9.0 percent, and jobs “in-between” will grow by only 4.4 percent. Again, this is only looking at those top 20 occupations—but it mirrors the national figures. The job growth for these occupations, overall, is concentrated in high-skill, high-wage and low-skill, low-wage occupations. Not in the middle-skill and middle-income. (Though let’s be honest: the middle-skill jobs in Michigan aren’t paying a household supporting wage, and one can imagine they will pay even less, relatively, if there are more applicants vying for them.)

This data paints the picture that our policy agenda is trying to respond to. We need to make college education a possibility for far more of our kids; we need to support the vast numbers of people who are going to be working low-wage jobs so that they aren’t living in poverty; and we need to support the creation of communities that can attract talented workers to drive the economy.

If we want Michigan households to grow in prosperity, there are so many things we need to do differently. And we need to start by realizing that the future won’t look like the past—or even the present.

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“A particular kind of human being”

The post by Patel, the founder and president of Interfaith Youth Core, about the increasing value of liberal arts degrees, is based on an understanding that Michigan Future shares about the new realities of our economy. Increasing globalization and automation mean that the greatest job security comes from being highly skilled in capacities that computers will not be able to replicate. Right now those uniquely human capacities include empathy and listening, creativity and innovation, and the ability to apply expertise in decision-making. Managing people and connecting knowledge to social interaction are not things computers will do. Drawing from a number of articles, Patel writes:

A computer can undoubtedly give you the right pill for pain, and a robot can provide electrical-stimulation treatment, but for the interaction, creativity, and judgment that a therapeutic conversation requires, a particular kind of human being is needed. Where are we going to get these knowledgeable and caring “relationship workers”?

The value of liberal arts degrees

Not only are these the jobs that are least susceptible to automation, they are also the jobs that are growing. A McKinsey report cited by Patel shows that between 2001 and 2009, jobs requiring human interaction grew by 4.8 million. Fortunately, liberal arts degrees, formerly the bogeyman of practically-minded parents, are already designed to prepare students for this impending economy. Patel goes on,

The hallmarks of a liberal education — building an ethical foundation that values the well-being of others, strengthening the mental muscles that allow you to acquire new knowledge quickly, and developing the skills to apply it effectively in rapidly shifting contexts — are not luxuries but necessities for preparing professionals for the coming transformation of knowledge work to relationship work.

Michigan’s education system, from pre-K to college and beyond, needs to be reflective of this reality. At every level, we need to be growing the skills in our people that our robots cannot replace.

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More evidence of the increasing impermanence of occupations at all skill levels comes from a recent report by Bank of America Merrill Lynch entitled Robot Revolution––Global Robot and AI Primer. The report is written to identify big trends in the economy and how investors can make money by investing in the companies leading the change.

Yes companies that are creating smarter and smarter machines are likely to grow and yes companies that utilize these smarter and smarter machines best are likely to gain a competitive edge. But as the report notes the use of smarter and smarter machines also means work that humans are currently doing will be eliminated. Not just jobs, but also occupations. So much for get a trade or profession and be set for a working life.

The report starts with an overview of the impact of smarter and smarter machines: The pace of disruptive technological innovation has gone from linear to parabolic in recent years. Penetration of robots and artificial intelligence (AI) has hit every industry sector, and has become an integral part of our daily lives. Technology has also expanded beyond routine work, and moved into complex problem-solving, and replicating human perception, tasks that only people were capable of.

The report identifies eight sectors where robots and artificial intelligence are likely to substantially grow over the coming decades: “1) Artificial Intelligence; 2) Aerospace & Defense (including drones); 3) Autos & Transport; 4) Financials; 5) Healthcare; 6) Industrials; 7) Services (domestic); and 8) Agriculture & Mining”. The report continues:

We anticipate fast growth for the likes of agribots, AI, automation, care-bots, cobots, drones(commercial and military), fintech, industrial robots, medical robots & computer-assisted surgery, self-driving cars, service robots, software and telehealth. … The combination of AI, machine learning, deep learning, and natural user interfaces such as voice recognition are making it possible to automate many knowledge worker tasks that were long regarded as impossible or impractical for machines to perform.

Given the priority that policy makers, the media and employers have placed on getting more kids into the manufacturing skilled trades its noteworthy that the report predicts: “… only 10% of manufacturing tasks are automated worldwide, a figure which is likely to reach up to 45% in 10 years for sectors such as computers & electronics, electrical equipment, machinery, and transportation equipment”. Knowing that any of you going to push your kids into a manufacturing skilled trade?

But its not just traditional blue collar occupations that are at risk to be automated away. The report states: “Advances in computing technology, machine learning, and user-friendly interfaces such as voice and facial recognition will bring profound changes to knowledge work employment, which will cost US$14 trillion by 2025E. By then, computerization could potentially take on the work of 110-140mn full-time equivalents…”

Careers last for roughly forty years. Its time we stop thinking of career ready as having the credentials to get a first job in a trade or occupation. There is no way of knowing whether that trade or occupation is going to be in demand for a decade let alone four. As we have explored previously, successful careers are going to look a lot more like rock climbing rather than climbing a known and predictable career ladder. The skills one needs to be a successful rock climber are broad skills that allow one to constantly adjust and learn rather than occupation specific skills.

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This new reality has led us to advocate for an education that builds broad skills (like the skills recommended by the Partnership for 21st Century Learning) rather than narrow occupation-specific skills. This, of course, is counter to the new conventional wisdom that we should reemphasize vocational training in high schools and move higher education––both community colleges and universities––away from the liberal arts and towards developing skills needed for a good paying first job, particularly in STEM fields. Big mistake for student, employers and the economy!

Peter Cappelli, director of Wharton’s Center for Human Resources at the University of Pennsylvania, has just published a new book entitled Will College Pay Off? The Wharton School interviewed Cappelli about the themes of the book. The podcast is worth listening to. What follows is an extended excerpt from the podcast. It makes the point about as well as I have heard why occupation-specific education is not the path to good paying forty year careers. Cappelli says:

One of the things I worry about with the very specific, job-focused majors, is what do you do if you don’t get a job in that major? You’re an international tourism major — which is a real major, by the way — and the international tourist agencies are not hiring the year you graduate. What are you going to do? You would have been better off with a liberal arts degree. You’re taking a huge risk when you pursue these very focused degrees. It’s not free in the sense that there are a bunch of other courses that you could have been taking and a bunch of other things that you could have been learning beyond, say, memorizing international tourism laws and taxation relationships and things like that. There’s an opportunity that you’re losing that might have broadened you in ways that would allow you to do better after just your first job, which is the other point about these programs. They are just focusing on the first job out of school. What happens after that?

… If you look at the evidence on STEM, the first thing to note about it is it’s a bunch of different majors that actually don’t have an awful lot to do with each other. What the evidence seems to show is that people with math degrees and science degrees don’t do very well. There’s an interesting study in Texas that shows that students with sociology degrees make more money than students with biology degrees. It’s not true that in the sciences or in math there are even very many jobs for these folks, and they don’t pay very well.

It is true that if you look for the best paying jobs in the U.S. right out of college, those jobs are almost entirely engineering jobs. But the thing about them is they are not the same job every year. And being an engineer is not a general qualification right? If you’re a petroleum engineer, you can’t switch and become an electronics engineer or computer science engineer at the point of graduation. They are quite different and they are not substitutable across.

The thing about these very top jobs is that they change a lot year by year based on what’s going on in the economy. To give you an illustration of this, the hottest job in the U.S. for the last three years or so — and which pays about 50% more than the second highest paid job — has been petroleum engineers. A generation ago, or even ten years ago, those folks were waiting tables. There was no work for them. What happened was completely unpredictable. That was the discovery of fracking, which suddenly unleashed a bunch of exploration, and these folks were just really in demand.

But the thing that we know is, as soon as something like that really becomes hot, students pour into those majors and fields. That’s what happened in the last couple years. They are pouring in, and now oil prices have collapsed. The interest in oil exploration is also beginning to collapse and will shortly. The demand for these folks is clearly going to collapse as well because demand is falling and the supply of new graduates is going to pile into the market.

One of the things about pursuing these jobs which are at the top of the list is that you’re taking a lot of risk with those jobs because they may not be hot. It’s not all engineering jobs that are always hot. The second thing to think about with a lot of those jobs, particularly the IT jobs, is they don’t seem to last very long. People don’t stay in those jobs very long, so you get a great-paying job out of college; three years later, what are you going to do? You can do another programming job, and you can be a programmer forever. But they don’t lead anywhere long term. A lot of people give up on them altogether.

Exactly!

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As I wrote: “The 40 Under Forty nominees work, of course, in the private sector, but also for nonprofits and government. And they overwhelmingly work in the knowledge-based sectors of the economy: health care and social assistance; education; management of companies; professional services; finance and insurance; and information. In terms of occupations, the 40 Under Forty nominees represent the broad diversity of opportunity in a 21st century economy. They also represent the continuing reality that the liberal arts remain a reliable path to success. Hardly any of these future leaders of the region work in STEM occupations.”

Both are good news for the future of the West Michigan economy. Successful regions are going to be those that are broadly diversified across all the knowledge-based services, rather than narrowly concentrated in a few industries. Certainly that is true for the two most prosperous Great Lakes regions: Chicago and Minneapolis.

This is a lesson that the state and nation need to learn. This narrow focus on STEM occupations, and even worse, the oft repeated message from too many of our political and business leaders that if you don’t get a four year degree in a STEM field you are better off going to a community college to become a machinist (or similar technical occupation) is bad for both students and the state’s and nation’s economic well being.

Do the nation and state need more people with math and science expertise? Of course. But that doesn’t mean we need fewer people with the kind of skills developed by getting degrees in fields other than engineering and the sciences. The only way to build a broad knowledge-based economy is to have a large talent pool with the widest variety of skills in plentiful supply.

Two recent articles explore why broader––rather than narrow occupation focused––college degrees, are good for our future well being. Both highly recommended:

In a terrific Wall Street Journal column entitled Why Focusing Too Narrowly in College Could Backfire, Peter Cappelli of the Wharton School makes the case why a broad liberal arts college education is good for the long term economic well being of students. The article is subtitled “Students are told learn the subjects that will best land them a job when they graduate. But that could be the worst thing they could do.”

The New York Times recently wrote about Indian business leaders starting a new liberal arts college. Why? As the Times writes: “Yet a group of successful professionals and entrepreneurs, some of them alumni of these universities, have come together to establish an alternative to what they say is an educational paradigm that overly emphasizes technical capabilities while neglecting vital skills like critical thinking, communications and teamwork.” (Emphasis added.)

West Michigan currently has too small of a talent pool — it has one of the lowest college attainment rates of metros with populations of 1 million or more in the country. So it’s good that the next generation of West Michigan leaders represented by this year’s Grand Rapids Business Journal’s 40 Under Forty class chose to follow their own passion with degrees and occupations that are not those selected as the future winners by government or the so-called experts. But it also is good for the future of metro Grand Rapids.

Lets hope all across Michigan––which also has too small a talent pool––students follow their own passion and earn degrees and enter occupations that are not those selected as the future winners by government or the so-called experts. It will be good for them and the future of Michigan.

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Both clearly present the overwhelming data that manufacturing employment has been and will continue to be a smaller and smaller part of the American economy.  And the unwillingness of elected officials of both parties to recognize this reality.

The fact that President Obama, Governor Snyder or any other national or state policy maker declare manufacturing a vital component of job creation and/or rebuilding the middle class won’t make it so. Globalization and technology–the drivers of the manufacturing decline–trump politics and policy. End of story!

The facts: As Businessweek writes:

Any attempt to draw lessons from the 1950s, when many a high school-educated (white, male) person got a job in a factory and joined the middle class, doesn’t account for the changes in the U.S. and global economy since the middle of the last century. While it’s smart to focus on creating more stable, remunerative jobs, few of them are likely to come from manufacturing. In 1953 manufacturing accounted for 28 percent of U.S. gross domestic product, according to the U.S. Bureau of Economic Analysis. By 1980 that had dropped to 20 percent, and it reached 12 percent in 2012. Over that time, U.S. GDP increased from $2.6 trillion to $15.5 trillion, which means that absolute manufacturing output more than tripled in 60 years. Those goods were produced by fewer people. According to the Bureau of Labor Statistics, the number of employees in manufacturing was 16 million in 1953 (about a third of total nonfarm employment), 19 million in 1980 (about a fifth of nonfarm employment), and 12 million in 2012 (about a tenth of nonfarm employment).

Rattner in addition to reviewing the data on job loss also deals with the new reality that blue collar factory jobs no longer pay high wages. And the combination of the two–fewer jobs and lower wages–make manufacturing not the path to rebuilding a mass middle class. He writes:

But we need to get real about the so-called renaissance, which has in reality been a trickle of jobs, often dependent on huge public subsidies. Most important, in order to compete with China and other low-wage countries, these new jobs offer less in health care, pension and benefits than industrial workers historically received. …

For all the hoopla, the United States has gained just 568,000 manufacturing positions since January 2010 — a small fraction of the nearly six million lost between 2000 and 2009. That’s a slower rate of recovery than for nonmanufacturing employment. “We find very little real evidence of a renaissance in U.S. manufacturing activity,” a recent Morgan Stanley report stated, echoing similar findings from Goldman Sachs. …

This disturbing trend (declining wages) is particularly pronounced in the automobile industry. When Volkswagen opened a plant in Chattanooga, Tenn., in 2011, the company was hailed for bringing around 2,000 fresh auto jobs to America. Little attention was paid to the fact that the beginning wage for assembly line workers was $14.50 per hour, about half of what traditional, unionized workers employed by General Motors or Ford received.

With benefits added in, those workers cost Volkswagen $27 per hour. Consider, though, that in Germany, the average autoworker earns $67 per hour. In effect, even factoring in future pay increases for the Chattanooga employees, Volkswagen has moved production from a high-wage country (Germany) to a low-wage country (the United States). (Emphasis added.)

As we explored in our latest report, rather than manufacturing, the key sector of both job and personal income growth (the two together create a mass middle class) in America going forward are knowledge-based services. That is where the combination of job growth and high wages have been, and almost certainly will continue to be, the strongest.

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In a terrific article for Wired Kevin Kelly details the extent that machines are likely to destroy current jobs/occupations. The article is entitled Better Than Human: Why Robots Will — And Must — Take Our Jobs. Kelly writes:

It may be hard to believe, but before the end of this century, 70 percent of today’s occupations will likewise be replaced by automation. Yes, dear reader, even you will have your job taken away by machines. In other words, robot replacement is just a matter of time. This upheaval is being led by a second wave of automation, one that is centered on artificial cognition, cheap sensors, machine learning, and distributed smarts. This deep automation will touch all jobs, from manual labor to knowledge work.

Kelly is an optimist in terms of what this means for humans. That we will dream up new, more rewarding and higher paid work for humans to do. He writes:

This is not a race against the machines. If we race against them, we lose. This is a race with the machines. You’ll be paid in the future based on how well you work with robots. Ninety percent of your coworkers will be unseen machines. Most of what you do will not be possible without them. And there will be a blurry line between what you do and what they do. You might no longer think of it as a job, at least at first, because anything that seems like drudgery will be done by robots.

We need to let robots take over. They will do jobs we have been doing, and do them much better than we can. They will do jobs we can’t do at all. They will do jobs we never imagined even needed to be done. And they will help us discover new jobs for ourselves, new tasks that expand who we are. They will let us focus on becoming more human than we were.

Others are not so sure. Predicting a future with fewer and lower paying jobs. No one really knows whether the economy will produce enough new jobs to replace those that have been automated away.

What is clear is that how we construct a successful career will look, for nearly all of us, a lot more like rock climbing than ladder climbing. There will be fewer and fewer career ladders where there are linear, known steps up that allow one to be prosperous over a long career. Rather those that succeed will be able to identify both the challenges and opportunities brought on by constantly smarter machines and have the agility and skills to take advantage of new opportunities.

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Design –– particularly modern design –– has deep roots in Michigan. Its an important and under valued component of the competitive success of both the auto and furniture industries. Michigan also has a rich history in modern architecture. And its world class design schools –– College for Creative Studies, Cranbrook and Kendall College –– are vital assets for Michigan’s past and future economic success.

As the organizers of Michigan Modern write: “Our goal through this project is to change how people view Michigan. The state’s contribution to design has been as great as its contribution to manufacturing, yet it has been largely overlooked. By focusing on Michigan’s dynamic and on-going design heritage, we hope this project will inspire a new audience to learn of the wealth of design history and opportunity that Michigan has to offer.” (Emphasis added.)

Exactly! Design is not only an important component of Michigan’s past, it is likely to be an important engine of its future economic success. Particularly in West Michigan and metro Detroit. Although it never ends up on the industries of the future or hot job lists, design is likely to be both. In part because of growing consumer demand for well designed products (something that gives products and enterprises a competitive edge) but also because it is hard to automate.

Daniel Pink explores this is depth in his book A Whole New Mind (the best book I have read on the future of jobs). Pink entitles one of the book’s sections “Design means business/ business means design”. Worth reading!

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The authors write: “Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.”

AP’s key findings:

• “For more than three decades, technology has reduced the number of jobs in manufacturing. Robots and other machines controlled by computer programs work faster and make fewer mistakes than humans. Now, that same efficiency is being unleashed in the service economy, which employs more than two-thirds of the workforce in developed countries. Technology is eliminating jobs in office buildings, retail establishments and other businesses consumers deal with every day.
• Technology is being adopted by every kind of organization that employs people. It’s replacing workers in large corporations and small businesses, established companies and start-ups. It’s being used by schools, colleges and universities; hospitals and other medical facilities; nonprofit organizations and the military.
• The most vulnerable workers are doing repetitive tasks that programmers can write software for — an accountant checking a list of numbers, an office manager filing forms, a paralegal reviewing documents for key words to help in a case. As software becomes even more sophisticated, victims are expected to include those who juggle tasks, such as supervisors and managers — workers who thought they were protected by a college degree.
• Thanks to technology, companies in the Standard & Poor’s 500 stock index reported one-third more profit the past year than they earned the year before the Great Recession. They’ve also expanded their businesses, but total employment, at 21.1 million, has declined by a half-million.
• Start-ups account for much of the job growth in developed economies, but software is allowing entrepreneurs to launch businesses with a third fewer employees than in the 1990s. There is less need for administrative support and back-office jobs that handle accounting, payroll and benefits.
• It’s becoming a self-serve world. Instead of relying on someone else in the workplace or our personal lives, we use technology to do tasks ourselves. Some find this frustrating; others like the feeling of control. Either way, this trend will only grow as software permeates our lives.
• Technology is replacing workers in developed countries regardless of their politics, policies and laws. Union rules and labor laws may slow the dismissal of employees, but no country is attempting to prohibit organizations from using technology that allows them to operate more efficiently — and with fewer employees.”   (Emphasis added.)

At the core of Michigan Future’s work has been the belief that globalization and technology are mega forces that are and will continue to transform the economy.  And that both are more powerful by orders of magnitude than policy or politics. This means that the individuals and communities that will do the best are those that adapt to –– rather than resist –– these new realities.

This article makes clear the scale at which smarter and smarter machines are going to destroy jobs and occupations. More and more work that humans have done in the past  –– at all skill levels –– are going to become obsolete.  And its unclear whether the economy will produce enough new jobs to replace those that have automated away.

What is clear is that how we construct a successful career will look, for nearly all of us, a lot more like rock climbing than ladder climbing. There are fewer and fewer career ladders where there are linear known steps up that allow one to be prosperous over a long career. Rather those that succeed will need to be able to identify both the challenges and opportunities brought on by constantly smarter machines and have the agility and skills to take advantage of new opportunities. Pretty scary, but reality.

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Mead tells well the story Michigan Future has been describing for years. That just as more than a century ago when agriculture could no longer be a source of a prosperous America, the same is true today. The mass production economy that anchored 20th Century American –– and particularly Michigan–– prosperity can not be the anchor of a prosperous 21st  Century America. Future American and Michigan prosperity most be built on a new economy.

Mead writes:

Essentially, the problem is this: automation and IT are moving routine processing, whether what’s being processed is information or matter, out of the realm of human work and into the realm of machines. Factory floors are increasingly automated places where fewer and fewer human beings are needed to transform raw materials into finished products; clerical work and many forms of mass employment in business, government and management are also increasingly performed more economically by computers than by trained human beings.

The transformation is only beginning to kick in. Self driving cars and trucks may reduce the need for human beings in the transportation and freight industries. Information processing is beginning to change the nature of the legal profession and even as law school applications fall by almost 50 percent there is much more change to come. Computer assisted diagnosis is making itself felt in health care. MOOCs are likely to change the way much of higher ed works. 

… automation and globalization aren’t going away; in both good times and bad the foundations of the old social order will continue to erode. … The old jobs are going away and they aren’t coming back. More, we can’t fix the problem by trying to create new jobs in factories or traditional office bureaucracies to replace the ones going away. We need new kinds of jobs that don’t involve manufacturing or traditional forms of information processing.

Unlike many others, Mead is optimistic that we can and will build a more prosperous America just as we did a century ago after the decline of agriculture. But to do so will require fundamental change from all of us. There are no political levers available to make the old economy work again.  He writes:

 In the 19th century most Americans spent their time working with animals and plants outdoors in the country. In the 20th century most Americans spent their time pushing paper in offices or bashing widgets in factories. In the 21st century most of us are going to work with people, providing services that enhance each others’ lives.

… A service economy resting on the high productivity agriculture, manufacturing and information processing will be a more affluent and a more human economy than what we have now. Human energy will be liberated from wringing the bare necessities from a reluctant nature; energy and talent will flow into making life more beautiful, more interesting, more entertaining and easier to use. By 1960 few American suburbanites really envied their hardscrabble, uneducated ancestors shivering through the winter in sod huts on the open prairie; one suspects that few Americans in 2060 will be pining for the glorious old days of 9 to 5 at GM.

But the change will come hard. The tax system and the financial system will have to change to promote the rise of a new world of jobs. The educational system will have to change to prepare young people for new kinds of lives. We are going to have to make all kinds of changes as our society comes to embody a new kind of economic logic. The changes won’t be easy but they aren’t optional.

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