The Future of Work

The first author who alerted me to the transformation of the economy and its effect on employment was Jeremy Rifkin, who wrote about it in his book “The End of Work,” published almost 20 years ago, as a reader well reminded me.

Around the time we joined NAFTA, Vivianne Forrester published a text called “The Economic Horror,” which was quite bad but very popular in Mexico. The Rifkin text was a lot more useful. Since then, Rifkin produced “The Hydrogen Economy,” and his more recent books have not reached the same level.

But rather than talk about that book, today I would like to explain to you a document from the McKinsey Global Institute that appeared last March. It sheds some light on work in the new economy. The authors of this document are James Manyika, Susan Lund, Byron Auguste, and Sreenivas Ramaswamy. You can read it in English at: http://www.mckinsey.com/Insights/MGI/Research/Labor_Markets/Future_of_work_in_advanced_economies.

Beyond the crisis, the authors explore five trends that are affecting the levels of employment, for which we are still searching for a name: the impact of technology; the gap between skills that look for businesses and have people; the geographical disparities between supply and demand of manual labor; growing groups that have no access to work; and the expanding inequality of income. What they find is that the imbalance that exists today in the labor markets is not going to be solved by traditional measures.

For example, they find that in the United States employment that has increased is in industries related to human interactions (personal care, lawyers, doctors, etc.), whereas employment related to transactions is at a standstill and manufacturing has tightened. Not only is there a change in the orientation of jobs, but also in their type. According to the text, “Across the … Organisation for Economic Co-operation and Development … nations, part-time and temporary employment among prime-age workers has risen 1.5 to 2 times as fast as total employment since 1990. From 2000 to 2010, the number of temporary jobs in France rose by more than 66 percent, while the number of permanent jobs increased by just 7 percent.”

But the most important change has to do with the competencies of workers. Largely, this is associated with their education level, even though they are not necessarily the same. McKinsey says, “In the past decade, the unemployment rate for workers with less than a secondary education rose by seven percentage points in Spain, three points in the United Kingdom, and two points in Canada and Germany. In the same period, the unemployment rate for workers with a tertiary education (a bachelor’s degree or higher) fell by two points in Spain and Germany and remained steady in the United Kingdom and Canada.” In the United States, as we mentioned last week, the unemployment rate for those who did not finish their high school education doubled, reaching more than 15 percent, whereas the unemployment rate for people with a college degree never exceeded 5 percent. In France the figures are similar: 13.5 percent for high school drop-outs and 5.6 percent for college graduates.

The make-up of employment is very different now. In 2000, 22 percent of OECD workers had college degrees (or the equivalent), while in 2010 there were already 32 percent who did. In return, those who had no secondary education decreased from 36 percent to 24 percent.

Nevertheless, businesses complain about not finding personnel with the necessary skills. “In 2011, 26 percent of employers in Europe reported having difficulty filling jobs for lack of qualified talent, particularly technicians and engineers — and 80 percent of Japanese companies reported the same problem. In another survey, two-thirds of European CEOs have said their key challenge in the next three years is the limited supply of candidates with the right skills. In 2011, when the U.S. unemployment rate exceeded 9 percent, an MGI survey of 2,000 US companies found that 30 percent had positions open for more than six months that they could not fill.”

I am done referencing this document; it can be read on the internet. In my opinion, the greatest significance for young people can be found in the following quote: “By 2020, our research projects that the United States may have 1.5 million too few workers with college or graduate degrees — and nearly 6 million more workers lacking a high school diploma than employers will demand. This problem is evident in other advanced economies as well. We project that France will have 2.2 million too few workers with a baccalaureate to meet demand in 2020 and 2.3 million more workers who lack a baccalaureate than can be employed.”

The figures are clear. The present economy requires people with qualifications, to such a degree that there are expected shortages in advanced economies. In any case, the types of jobs that are increasing are related to human interactions. In short, this means that if someone is waiting on future employment one should study everything within this area. Today, a young Mexican who might be an engineer, a certified technician, a doctor or nurse, and who speaks English very well has secured a job in the United States with quite a reasonable income ($50,000 and up a year).

It is clear that anyone can study what they want, or not study at all. [If the latter is chosen] one must consider that one will not have an easy life. According to the 2008-2009 data of the National Association of Universities and Institutions of Higher Education, we have 2.2 million youth at the universities. A little more than half of them study for careers in the area of social sciences and administration or education and humanities. A third study engineering, one out of 10 study in the area of science and health. If we consider only the private institutions, 70 percent study social sciences, administration, education or humanities.

This is a result, as we have said on many occasions, of an education system created in order to indoctrinate and to train. Twenty-three percent of the children’s time in basic education is dedicated to studying social sciences. This can only carry half of them to careers that have no place in the economy. They tell me that it is because the education system builds “critical thought.” False. Critical thought would begin to realize the reality, a tragedy.