The conventions are over and the 2016 POTUS election is now in the final stretch. Stagnant wages and increasing concentration of the wealth will continue to be the case irrespective of who wins the race and reached the White House. This is the sad reality as reflected in the article titled “What to do about jobs that are never coming back” in the latest issue of TIME magazine (August 1, 2016 – Page23):
“Rapidly emerging economic order in which automation and ever smarter artificial intelligence will make even cheap foreign labor obsolete and give rise to a society that will be highly productive – except at creating new jobs. Today’s persistently stagnant wages and rageful populism are early signs of the trouble this could generate”
Here are a few thoughts for both the Republicans as well as Democrats. Independents have to be concerned about this as well.
We have been concerned about this development for over three decades. Our two books titled:
- The System Approach – A Strategy to survive and succedd in the Global Economy (2000)
- Thriving in the 21st Century Economy – Transformational Skills for Technical Professionals (2013)
address this development and also how individuals can cope with the same. Please see the links below for details:
- “At a time when computers can do everything (read, write, speak, calculate, analyze, decide and direct), professionals and companies have to do something more! This requires System Thinking and Transformational Skills”
- At a time when the products and services of any company have to serve one of two extremes – (a)High Volume and Lowest Cost or (b) High Value and Unique Capability – with no survival in the middle, companies and enterprises need to adapt System Thinking and Transformational Skills to survive and succeed in this Binary Economy
– Dr. K. (Subbu) Subramanian, President
But our purpose of writing this blog is larger than the issue of individual coping skills in this emerging new economic order.
While “Manufacturing” will continue to be a source of economic growth and employment, clearly the employment opportunities through manufacturing WILL NOT be as large as needed to address the larger populations and their needs. This will have serious impact for developed nations and developing nations alike:
For countries like India it will require economic policies that go beyond mere reliance on Manufacturing sector or “Make in India” as the sole growth engine for the future.
The Western or developed economies and industrial developments have largely been based on a simple model: “The economic success of an individual is judged by how large (limitless) one can consume energy”! – The richer you are, you own and enjoy bigger house, bigger planes, more cars, boats, ….” These are also countries with small population size. Their emphasis on manufacturing are also related to products and services that support such energy intensive needs.
Today developing nations – India, China, …- seem to be copying the same models (with more reliance on cars, planes, highways, airports, ….). In fact copying this energy intensive opulence can be seen when the rich conduct their family weddings on board the airplanes! Investments in support of the above model benefits a very small fraction of the population – as one can expect – at the expense of the unmet needs for the larger population in the developing nations as well as the developed nations.
Unfortunately consultants and world economic planners view every growth from this lens of energy consumption intensive opulence. If the highways and airports are not in par with the “developed” nations then such countries are deemed under-developed! Add this unbridled copying of the energy intensive economic opulence model together with the relentless role of IT – Digital technology in a broad sense – to replace any and all human intensive work which leads us to the conclusion as quoted above from the TIME Magazine article ” Rapidly emerging economic order in which automation and ever smarter artificial intelligence will make even cheap foreign labor obsolete and give rise to a society that will be highly productive – except at creating new jobs.”
One can see the writing on the wall ! Then what is the way out?
In a “Global Economy” the problems of any one has to be come the problems of all. USA as a world leader has to assume responsibilities for the global problems: World wide need for food, shelter, drinking water, energy efficiency, ecology, etc. Attempts to solve these problems of all also provide plenty of opportunities for high wage jobs and employment for highly skilled professionals.
These jobs created by the government will stay within the shore and create better employment in USA. Their outcomes when globalized will benefit every one and more economic opportunities for the private sector. Take for instance the GPS, developed with federal funding. It is now used by every one across the globe. Hence here are our suggestions:
Invest in areas to (a) educate and (b) employ a large number of skilled professionals, who are also educated and trained on System Thinking with Transformational Skills.
Start thinking of “Technology” not limited to IT. This is not the the current or prevailing notion.
Start thinking of all Physical Technologies as means to solve a wide variety of problems and meet a broad range of needs of the global population. This would be like investing through NASA, NIH, Transportation, Space, etc. but many times over!
These programs must be targeted not only for the immediate needs of the nation, but for the larger needs of the globe as a whole: Drinking water, food, home and shelter, better climate, low cost energy, better use of natural resources, better use of the ocean and the outer space, renewable energy, etc. Pollution in China need not be a crisis for China alone! Lack of adequate food distribution and hence hunger need not be India’s problem alone!
Global leadership requires ownership of global needs!
Where does the money for this come from? The unbridled use across the globe of developments inside of USA based on Physical Technology has given rise to unlimited wealth for investors who exploit the use of such developments across the globe, enabled by IT applications and their capabilities. These are the “new riches” of Globalization today that go with out being taxed.
GOP and the conservatives do not wish to tax the hard earned income of individuals. We agree with that. But the “new riches” – the non-wage income generated by investors – can not fall in the same category of income as that of the wage earners and their reward for their hard work.
Democrats believe that workers do not get living wages and the minimum wages have to go up. We agree with that as well. But beyond that individual income has to come from individual efforts and not government support. As an example we agree that “Debt free education” is better than “Tuition free education”. Beyond that Government has an unique role to create New Jobs for skilled workers. These can be pursued as follows:
Investment for new high skill jobs that has to come from the federal government, since federal jobs can be protected and preserved to remain within the shores. Like the peace core that created good-will across the globe, we need Professional Core of high wage workers that can work in the USA and create a stream of new solutions based on a wide variety of technologies (beyond IT) for the betterment of the human kind across the globe as well as for a better planet tomorrow.
To this end Non-Wage income earners can contribute through higher taxes and the government can target this additional income for creating such high wage jobs.
The workers in these high wage jobs through their system thinking and Transformational skills have to be truly mindful of the outcome of their work and not become government employed bureaucrats merely pushing papers and administering programs, as they are perceived to be in the current work force.