The “unskilled” labor market is at a crossroads perhaps unlike any we have seen before. With the ongoing emergence of automation and robotics, many of the old manual labor jobs in factories are quickly becoming obsolete. The loss of manufacturing jobs in the United States is not simply a story of outsourcing as it is sometimes told, but also one of automation that will likely eventually replace even many of the outsourced jobs in China and elsewhere. The future of unskilled labor is a mystery and questions are aplenty. Is demand going to continue to fall to insignificance? Will a new sector emerge to take over the demand as the rise of manufacturing did after agricultural mechanization? And if not, what does it mean for social mobility?
These questions are perhaps some of the most pressing yet overlooked of our time. Exact answers will be impossible to come up with, but the mere possibility of a major decline in the unskilled labor market should be considered in the realm of policy, especially given the strong public ties in what is currently an inflexible education system.
For one, is the current schooling system adequate for what could be a much more specialized and technical labor market? I would guess not. As even entry level positions in many substantial labor markets start to require specialized training, the current high school graduate would almost definitely have to go through further training to get a job for much beyond minimum wage (and increasing it cannot fix the problem).
With some very undesirable unemployment rates for certain majors and trends that suggest things will be getting worse (not to mention the possibility of a college tuition bubble), four-year universities are likely not a blanket solution for this problem. My guess is that a combination of four-year schools, shorter technical programs, community college programs, legitimate online programs as well as newer solutions such as career-training programs or classes that can be taken during high school would be the best response. What exactly is needed is hard to gauge though as we aren’t even sure where the unskilled labor market is headed and if it is in fact going to eventually become obsolete. This is where leaving more education decisions to the market might be a much better option than the current labyrinth of Federal subsidies and regulations that favors certain choices over others.
Aside from education reform, simply acknowledging the potential unskilled labor crisis will likely lead to more diversified thinking and more solutions. Accepting that the government-fueled cultural notion of four year universities being for everyone might be wrong would be another step in the right direction. Questions are a good thing and blanket “solutions” based on mere speculation can be dangerous as we have so often with speculative bubbles. More people should really think about what they want to do, where they can find jobs and with what degrees or programs. This sort of critical thinking would be especially important in the face of a college tuition bubble.
The future of the unskilled labor market is up in the air right now and furthering the discussion is important as it can help prepare us for the worst. I’ve hit on a lot of topics in this post with some that I definitely have a lot more to say about, so you will probably see some posts on some of these topics (e.g. education reform and a potential college tuition bubble) again some time in the future. Please share any ideas of your own below.