Preparing Yourself for the Automation Age Robots and Artificial Intelligence
September 10 2019 - Employers Canít Retrain the U.S. by Themselves By Bloomberg
Preparing workers for the age of automation will require greater government investment.
Regardless of industry, todayís workers are bound by a common anxiety: their jobs will one day be performed by robots. While the threat is more imminent for some than for others, nearly everyone will need new skills in order to succeed. Businesses should help workers prepare for the challenges posed by automation ó but they canít shoulder the task on their own.
In the U.S., more than 7 million job openings remain unfilled. A shortage of workers is to be expected in a tight labor market, but thatís only part of the explanation. More than one in five employers say applicants lack skills necessary for the jobs on offer ó not just competency in digital technologies, but also soft skills like communication and problem-solving.
As more workplace tasks become automated, this deficit threatens to leave millions of less-educated workers behind. According to a McKinsey report, low and middle-wage workers are at greatest risk of seeing their jobs become obsolete by 2030. Nearly two-thirds of the U.S. labor force will require additional training just to hold on to the jobs they currently have. High-wage jobs are expected to grow as a share of overall employment, but the countryís education system isnít producing candidates with the skills required.
Last month, Amazon.com Inc. announced a $700 million investment to help workers learn new skills and advance their careers. The ďUpskilling 2025Ē program is better than nothing, but still only a limited response to the problem. The company plans to create a software-engineering school to teach non-technical workers how to code. Warehouse staffers will receive paid time to study for credentials to work as IT support technicians. Amazon has also pledged to cover 95% of tuition costs for employees who pursue certificates and degrees in occupations outside of Amazonís core businesses, such as aircraft mechanics, web design and nursing. Spread over six years, however, the companyís planned spending per worker each year will still be lower ($1,077) than the current national average ($1,296).
To upgrade the skills of Americans at greatest risk from automation, a more comprehensive approach is required ó one thatís backed by government. To start, states and the federal government should boost tax credits to encourage small and medium-sized businesses to invest more in retraining low-skilled workers. States should bolster workforce development boards that help community colleges and technical schools customize course offerings to meet the needs of local industries.
The government should also do more to promote apprenticeships, which allow workers, including mid-career professionals, to earn a salary while they learn new trades. The Trump administration has approved modest increases in federal grants to apprenticeship programs, but the U.S.ís investment remains paltry compared to that of countries, like Germany, with well-developed apprenticeship systems.
Workers themselves need to embrace the idea of retraining as a lifelong endeavor. Policy makers can assist by making short-term certificate programs eligible for federal student aid, as the bipartisan JOBS Act aims to do. Subsidized individual training accounts, like those offered by Singaporeís government, would encourage more adult learners to complete unfinished degrees or seek additional credentials. And Congress should revive the previous administrationís proposal to extend wage insurance to displaced workers who take new jobs at lower salaries. That would give middle-class workers the financial cushion to pursue more education while continuing to work.
Creating an educational and training system suited for the future of work will require government, educational institutions and industry leaders to collaborate. Success is possible, but it wonít come cheap. There are some things big business ó even Amazon ó canít deliver.
Free College Is No Use for Those Who Don't Need College Education
August 05 2019 - Education Is for Everyone But College Isnít By Bloomberg
Many career skills can be better and more cheaply taught at two-year schools or on-the-job.
Representative Alexandria Ocasio-Cortez says she wants to turn K-12 schooling into K-16 -- in other words, to move toward making public four-year colleges free and universal. But there are good reasons not to do this. Past a certain point, education probably works best as an eclectic mix of approaches rather than as a one-size-fits-all program.
The four-year university program has become the standard among the educated classes who make education policy. But just because the system worked for them doesnít mean it works for everyone. Over time, the percent of young Americans with college degrees has risen, but itís still a minority:
Share of Americans age 25-29 with bachelor's degree of higher
Itís not clear how much more this rate can or should be increased. At present, only about 67% of those who enroll in four-year colleges graduate within six years. This rate has increased slightly since 1990, but some education researchers question whether this is due to improved performance or to lower standards for graduation.
Proponents of universal free college may argue that students could be dropping out because of the price But the fact that graduation rates have been relatively stable for decades, despite big increases in tuition, suggests that price is not a major explanation for dropout rates. Instead, it suggests that the four-year college track simply isnít for everyone.
The four-year college model could also be a bad fit for people who just want a good job. In recent years, students have been gravitating away from humanities and social science majors and toward health services and other pre-professional majors. Thatís a sign that lots of todayís students donít go to college in order to become well-rounded scholars, but to climb into the middle class and earn a decent living. For these students, shorter, more practical degrees might be in order.
So policy makers should think about alternative options for the substantial portion of Americans who are either unwilling or unable to earn a bachelor's degree or higher. One option is career technical education (CTE). Economists Ann Huff Stevens, Michal Kurlaender and Michel Grosz estimated in 2018 that, even after controlling for student characteristics and individual differences in pre-degree earning power, these programs provide a substantial return on investment. In the health sector, those returns ranged from 12 to 99%.
The returns would be even higher for students if the government invested more on their behalf. From 2013 to 2016, economists William Evans, Melissa Kearney, Brendan Perry, and James Sullivan conducted an experiment at community colleges in Fort Worth, Texas. Randomly chosen students were offered assistance in completing their degrees, including mentoring, coaching and financial aid in emergencies. The program increased graduation rates substantially, and the authors estimate that those studentsí extra earnings exceed the programís costs after only 4.5 years.
This suggests that governments should go ahead and make community college free. Politicians such as President Barack Obama have long promised to do this, and there seems little reason not to. Because most people who attend community college come from low-income backgrounds, thereís little worry that this money would go to rich kids. It might even be worth it to pay people to go to community college, to help compensate them for foregone earnings.
Another alternative is on-the-job training. College specializes in teaching abstract ideas and general knowledge, but for directly applicable specific skills, itís hard to beat the education that one gets from coworkers in a task-oriented environment. In a recent paper, economists Kyle Herkenhoff, Jeremy Lise, Guido Menzio and Gordon Phillips looked at workers who changed jobs. They found that workers who were paid less than their coworkers in the first job tended to earn more in the second job. But the reverse didnít hold -- workers who were paid more than their coworkers at one job didnít take a hit to their earnings when they switched. To the extent that wages are a measure of job skills, this suggests that workers learn from more knowledgeable co-workers, but that the more knowledgeable co-workers donít suffer any penalties from teaching their fellow employees.
There are several ways to boost on-the-job learning in the U.S. labor market. One is to give companies more incentive to provide worker training. To some extent this is already happening -- in 2017, according to one report, U.S. companies spent $90.6 billion on training, representing a substantial increase from 2016 (though much of this may represent training regarding sexual harassment and other bad behavior). Government tax breaks and other incentives could encourage more companies to train their own workers instead of relying on the publicly funded education system to do it for them.
Apprenticeships are another approach. Widely regarded as having been successful in Germany, and with evidence suggesting returns similar to those of other types of education, these programs are catching on in the U.S., with about a half-million people now in apprenticeship programs. Although typically associated with manufacturing, apprenticeships can also be useful for white-collar jobs. Under a program from the Obama era, the Department of Labor has been helping set up apprenticeships.
So although the traditional four-year university track is good for some Americans, there are many others -- disproportionately from disadvantaged backgrounds -- who would benefit from alternative education and training programs. Instead of turning K-12 education into K-16, the government should embrace the kaleidoscope of learning approaches.
Working as a Freelancer
June 28 2019 - The 2019 Freelance Economic Impact Report Is Here By Fiverr
Today, Fiverr revealed the findings of its annual Freelance Economic Impact Report, a comprehensive study that identified and profiled the 25 largest markets in the United States for skilled freelance workers.
For the second year Fiverr commissioned market research firm Rockbridge Associates to analyze a range of secondary data sources, including the U.S. Census Bureau, to determine the size and revenues of U.S. based skilled freelancers. Over 20 million tax returns were classified by geography and industry, allowing researchers to approximate that there are 5.6 million skilled freelancers working in creative, technical or professional positions across the country. Over half (54%) of these freelancers live in the 25 metropolitan areas listed below and, combined, this group generated an estimated $135 billion in the 2018 tax year.
Highly-skilled freelancers are an understudied and often overlooked segment of the workforce. By analyzing the data around these digital workers weíre able to get a clear picture of the types of jobs theyíre doing, the amount of revenue theyíre generating and the cities in which theyíre having the most impact. While every market identified in the top 25 is unique, we can say that theyíre all characterized by high levels of diversity, high educational attainment and younger adult populations relative to the rest of the country.
New York home to over half a million freelancers earning estimated $25 billion Los Angeles leading with creative freelancers generating $5 billion Over six percent of San Franciscoís workforce employed as skilled freelancers Austin experiencing talent boom, skilled freelancer population up almost 26% Nashville increasing earnings, skilled freelancer revenue jumps almost 40%
Major Markets Rely Heavily on Skilled Freelancers
Data from New York, Los Angeles and San Francisco indicates the larger the economy the heavier the reliance on skilled freelancers.
The New York metro area sits atop the list with over half a million skilled freelance workers earning an estimated $25 billion in the 2018 tax year. The massive metro area is also home to the largest populations of professional and technical freelancers. The exception to New Yorkís dominance is Los Angeles. The Los Angeles metro area is the overall revenue leader in creative talent. Creative freelancers in metro Los Angeles generated an estimated $5 billion in revenue in the 2018 tax year.
San Francisco businesses are the most reliant on skilled freelance workers. Skilled freelancers in San Francisco account for 6.1% of the cityís total workforce, this figure is almost double the national average.
What the Data Tells Us
The results point to a robust and growing skilled freelance economy across the greater U.S., but the income and growth numbers only tell a portion of the story; as the kinds of the work being done highlight a broad and diverse skilled independent economy in American cities.
We understand how people get things done in the new economy, and we strongly believe this upside isnít reserved just for cities. With digital platforms, opportunity can extend to every corner of the country, so long as there is an internet connection and an ability.
Freelancers in our very own community illustrate just how possible it is, like Joel Young, who now calls rural Colorado home and is closing in on 2 million dollars in earnings on Fiverr. If he can do it, there is opportunity is out there for everyone.