Where is the real “Skill gap” ?

In his recent opinion page, Mr. Paul Krugman writes the following in the NYT:  Most people would surely agree that stagnant wages, and more broadly the shrinking number of jobs that can support middle-class status, are big problems for this country. But the general attitude to the decline in good jobs is fatalistic. Isn’t it just supply and demand? Haven’t labor-saving technology and global competition made it impossible to pay decent wages to workers unless they have a lot of education? ….  And the evidence that technology is pushing down wages is a lot less clear than all the harrumphing about a “skills gap” might suggest.

In the above referenced citation on “Technology”,  Mr. Mike Kanczal writes: When we think of the economic malaise of the past 30 years, we should probably think of it as a combination of technology, globalization, sociology, and public policy.

In all of the discussion, the word “Technology” is used with out a clear common understanding. If you are a Mechanical Engineer, your knowledge in applied mechanics, materials science and physics are not counted as “technology” in the above discussion by these eminent scholars. Same goes for Electrical Engineers, Chemical Engineers, Civil Engineers, Chemists and Biologists and their knowledge or know-how. Even a Robotics expert and his/her knowledge of mechanical design, path planning and fixturing are not counted in the above “technology” reference.

Instead, what is counted as “Technology” is the automation in the collection, processing, analysis and dissemination of information of any kind and in any place and for any reason. This is the automation of human centered capability in any and all aspects of our life. Instead of calling this as “Technology” we should call it as “Information work”. People, described as labor can be engaged in four sets of work:

  1. Finance – make money off money
  2. Professional Work – create and deliver a stream of new solutions each and every day (like a carpenter who makes and sells furniture, a plumber who fixes the leaking pipe and get paid for it, a cardiologist who fixes broken hearts (literally), etc.)
  3. Information Work
  4. Physical Work

The “Skill gap” mentioned above – which is seen as the major impediment against good paying jobs truly involve the following:

  • Recognizing that the work has indeed stratified into these four impermeable layers and only one of the four is available as a source of good wages (unless you are born with a silver spoon)
  • Recognizing that the Physical work and Information Work – which employed a large majority of the labor force with or with out higher education – will both be automated and what is left will only lead to low paying – “service” – jobs. Number of these jobs may grow, but their wages will hover around the minimum wage.
  • Only a narrow window of “Professional” work exists where there will be decent wages and opportunities to nudge into the middle class.
  • Finance – making money off the money – work is for a select few and these are the affluent 1%. If you can make it there great. Or if you are lucky to be born with a silver spoon, then you can count your blessings!
  • But, the better bet for the large cross section of the people may be to acquire skills that deliberately place them in the “Professional Work” category.
  • Such professional skills are not merely higher “Academic” education or Industry specific trade skills.
  • Instead the true skill gap is the blend of Academic, industrial specific skills together with System Thinking and Transformational Skills.

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