DESERT OF THE REAL SEPTEMBER 2017 NEWSLETTER

This Newsletter will come at a basic economic problem from a couple of different angles.  The Author Rob hits this topic often and there is a relationship, albeit tenuous. Here is the paradox in question form:

            How does the nation (and this region) attract and retain skilled labor and professionals while planning for a future that will need far less labor?

The Author Rob has addressed this topic several times, such as https://desertoftherealeconomicsanalysis.blogspot.com/2017/07/danger-will-robinson.html, https://desertoftherealeconomicsanalysis.blogspot.com/2017/06/has-god-really-been-good-to-indian.html

The nature of work, and the lack of it, will be significant issues in the coming decades. AI and the Robot Revolution will displace many workers. AI is displacing professional workers, such as lawyers and investment analysts. Robots on the factory floor displace labor. And the fast food and the healthcare industry are the next targets for AI and robotics. 

There are those that rightly point out that fears of automation wiping out all work have been overblown. And it has been demonstrated that automation opens up new jobs as it displaces old ones. But past automation displacement has been machinery taking away manual labor jobs. Changing the nature of work from below the neck to above the neck. This displacement is different, however, AI is taking the place of the above the neck workers. AI is smarter, faster and better than wet ware. 

But the topic is as much as matching up the skills required for the future with the higher paying jobs that will exist. On the one hand (as two-handed economists are given to saying), robotics requires trained technicians and engineers. But one the other hand, the work force in great supply are untrained young people, many which cannot even pass drug tests. Here in Northern Indiana, nearly every factory has a help-wanted sign. Restaurants and convenience stores are begging for help.  Some places have to close early because of a lack of help.

HOW CAN WE BE PROACTIVE?

A recent commentary in the Indiana Economic Digest presents the issues well. In an article entitled “These projects can keep Wells County in 'the game' - if it wants,” written by Mark Miller, the issue is both raising the quality of life in Northeast Indiana and providing the skilled work force. Miller describes some community improvements the cities of Bluffton and Decatur are making to their downtown areas.  Along with these improvements will come other efforts at attracting new people into the area? Miller states that the 11-county Northeast Indiana currently has 800,000 people and the goal is to grow to one million by 2031. And not to be snarky, but will the people coming in be the “right people.”

The region needs skilled workers that want to live in Northeast Indiana. And it wants the newcomers to enjoy living in Northeast Indiana because of the area’s quality of life. A tough task. A very tough task.

Northeast Indiana is not the Mississippi Delta or the Ozarks, but it is not Santa Clara County or Seattle. Miller presents the issue as “quality of place.”

Miller states that many younger workers, and mid-career workers are relocating to the place they wish to live. You move where you want to live and the work will appear. And with more work moving online, co-location is very possible.

The Author Rob cannot but see this draw of “Quality of Place” as almost impossible or Northeast Indiana. Fort Wayne is a generally nice small city, but it is not Austin Texas. Northeast Indiana has a good number of small lakes, but it is not Cape Cod.

Sure, we sometimes here that Fort Wayne “is a good place to raise a family.” The Author Rob’s primary care doctor said that when he was moving from the high quality of life Minneapolis suburb Eden Prairie to Fargo, North Dakota. Translated, “a good place to raise a family” means a place with cheap housing.  Fort Wayne has that in great abundance.

These high identity projects such as the one in Bluffton and Decatur generate activity and civic pride, but can these one-offs bring in a meaningful number of skilled technicians, professionals and other high tech workers? The Author Rob doubts it.

Many communities and Ivy Tech recognize the need for training workers for the existing and promised jobs. The apprentice model, very common in Europe, but almost abandoned in America, trains people in skilled trades. Employers contribute much of the funding in these apprentice models.

But in recent years, the training has been commoditized and taught at community colleges and the proprietary colleges.  This shifts the cost to the students in the form of student loans, and ultimately some of it to the taxpayers when students with worthless degrees from unscrupulous college default.

In an ideal world, workers would be happily employed in meaningful work. The Star Trek utopia. But perhaps were are only setting ourselves up for the Blade Runner Dystopia.

LET THE ROBOTS TAKE THE HINDMOST IN THE DESERT OF THE REAL