Now that the fourth Industrial Revolution is gaining momentum, we are constantly inundated by articles and statistics heralding the benefits this revolution will bring to industry. While those companies that embrace the new, integrated technologies will have powerful tools to improve efficiencies and to better connect with their customers, how will these changes affect the workforce?
With no one fully able to project what the workforce will look like in 10 years, trends are emerging. A number of jobs are likely to go away, creating a seismic shift in the structure of our labor market. Depending on which report one reads, between 40 percent and 57 percent of job tasks currently done by people could be automated. Locally, the Portland Business Alliance’s report, “2017, Automation and the Future of Work,” estimates that 49 percent of the job tasks in the Greater Portland Metro area, including Clark County, can be automated. The jobs at the highest risk tend to be jobs that pay $20/hour or less, which will disproportionately affect our lower income workers, with one report suggesting that up to 83 percent of the job tasks of those making $20/hour or less can be automated.
As one executive put it, “If it is dirty, dull, or dangerous – we are going to automate it.”
Encouragingly, we are likely to see growth in new jobs that could offset, or even surpass, the number of jobs lost due to automation. The new jobs are also likely to have a higher skill content and wage level than the old jobs had, opening the chance for upward mobility from marginal wage jobs to living wage jobs. The key to a smooth transition in the workforce is to ensure that those entering the workforce have the market demanded skills to make them a valued employee and that the incumbent worker’s skill levels are kept relevant and up to date.
Given the challenges matching workforce skills with demand during times of great change, this is going to be a heavy lift for our community – with education, employers and government working together.
With the rapid pace of change in many industries, education cannot afford to fall behind. Educators need agility to ensure students have the pathway and skills needed to be successful in the emerging labor market. From K-12 to higher education, progress is being made in this area at all levels of our education system. Specifically, higher education has the opportunity to broaden options around trainings that can be “stacked” to keep incumbent workers upskilled.
Employers have the opportunity to proactively manage their talent pipeline, ideally connecting directly with education as a partner, informing education on their needs, and helping to fund new program development and work-based learning. Upskilling the employer’s current workforce is a viable strategy as retraining current workers makes more sense than letting a valued worker go to hire a new, unknown worker with a more current set of skills. Data has shown that workers who feel their employer invests in their skills are much less likely to switch employers.
Those most likely to have their jobs displaced are at the lower end of the income curve and are the people least able to afford retraining on their own, which is one area where government can help. In the United States, we spend 0.1 percent of GDP on worker retraining while our OECD (Organization for Economic Cooperation and Development) peers spend six times what we spend on worker retraining. While direct government funding of training is critical, policies and programs designed to encourage workforce upskilling should be part of the integrated plan for transitioning our workforce into the fourth Industrial Revolution.
It’s time we embrace the new era without fear as the fourth Industrial Revolution will serve as a catalyst for job creation that holds the promise of higher wages. To do this we need educators, employers and government working closely together to manage the transition so that workers, whether new or incumbent, have access to the updated skills relevant in the new world. By leaning into change together, we can work to keep that change positive for our region.
Kevin Witte is vice president of Economic & Community Development at Clark College.