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You Decide: What's the source of our discontent
Story Date: 8/8/2016
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Source: Dr. Mike Walden, NCSU COLLEGE OF AG & LIFE SCIENCES, 8/5/16
Discontent with one’s life and the reactions motivated by that unhappiness have been the source
of numerous literary efforts, from Shakespeare to Steinbeck. Today’s political campaigns have
revealed a new level of discontent among many people.
Although statistics show the economy has improved since the end of the Great Recession, there
are numerous worrisome signs. Incomes – after adjusting for inflation – are down for many.
Over 50,000 people in North Carolina can’t find work and have dropped out of the labor force,
and another 160,000 are working part-time only because they can’t find full-time work. The
proportion of households classified as middle-class is shrinking, and a new report predicts
today’s children may not achieve the standard of living of their parents.
What’s causing these problems? Many ominous but non-specific answers have been offered –
including a failure of capitalism, a rigged economic system and a decline of national power.
While each of these answers has articulate advocates, I look for answers in a different way. I
look for broad forces sweeping through our economy and shaping the economic world in which
we live. In most cases these forces – on the surface – have big benefits, but underneath the
surface they can have adverse unintentional consequences.
The three dominant forces I see today are education, technology and globalization. Each has had
an individual impact, but together – I’ll argue – they are changing our economy in the most
meaningful way in a century.
We’ve seen a gradual upgrade in educational requirements for workers as the nature of work has
changed. At the dawn of the 20th century the most important requirements for a worker were a
strong back, strong hands and stamina. Work then was physical and hard. Relatively few jobs
required any level of formal education.
Today the tables have been turned. Physical work is increasingly being done by machines.
Tractors plow fields, machines assemble products and cranes lift steel. More jobs require
analysis and decision-making – that is – brain power. Individuals not getting a college degree are
seeing their incomes fall further beyond those with college diplomas. The biggest factor driving
income gaps is the pay differences between college-educated and non-college- educated workers.
Beginning with the bow and arrow and extending to today’s computers, tablets and smart
phones, technology has impacted what we do and how we do it. Technological advances have
always destroyed some jobs while creating others. For example, the automobile reduced jobs for
buggy drivers but increased employment for auto factory workers. But some say today is
different. Technology is becoming so capable and so pervasive that almost any task capable of
being programmed in computer code can be taken away from a human being. And many
economists aren’t sure how many new kinds of jobs will be created for the displaced workers.
In economics globalization means the reduction in trade barriers between nations, thereby
allowing countries to specialize in what they do best and trade. In theory, increased world trade
improves prosperity because resources are used more efficiently. With more prosperity comes
added jobs. But in practice, not everyone benefits. Workers who lose their jobs because
production has been moved to another country will have to upgrade their skills to those needed in
the new economy. Those who don’t re-train will be casualties of globalization.
To compound matters, these three forces have reinforced each other. As technology and
globalization have eliminated many middle-income factory and related jobs, the expansion of
jobs requiring college degrees has widened income inequality. Similarly, globalization has
enlarged the markets for big companies and made the decisions of CEOs more valuable – hence
increasing their pay at rates far faster than for other workers.
If education, technology and globalization are behind the discontent of many households, the big
question is - what to do about it? Some say “major surgery” to the economy is needed, such as
big increases in the minimum wage, empowering unions, placing limits on CEO pay,
renegotiating trade treaties and even restraining technological advances that are likely to
eliminate large numbers of jobs.
Others say the answer lies in helping people adjust to the changes impacting the economy.
Education is the key to this remedy, including a renewed commitment to improve K-12
performance and broader programs to re-skill workers who find their occupations significantly
downsized or eliminated. Also important is helping displaced workers relocate from regions
facing declining jobs to areas with rapid job growth. These solutions require resources targeted
to education, re-training and relocation.
The scary thing about what’s been happening to jobs and the economy today is that many
futurists think the forces I’ve cited will accelerate in the future. Hence, the public leaders we
elect will have to decide both the diagnosis and treatment generating our discontent.
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