In a Shrinking of a Pie by Paul Schlieben

The Articles First

Here are links to three very interesting articles that relate, in a roundabout way,
to the effects of technology on employment and education.  I’ll try to tie them
together later. Even if you have read them already, they are worth reading again.
(Also take the time to read the Reader’s Comments. Often they are as
interesting as the articles.)

The first article published in the

NY Times on March 4, 2011,
addresses the effects of
technology on high-level jobs.
Apparently, the performance of
the computer known as ‘Watson’
on the quiz show ‘Jeopardy’
caused more than a few people
to wonder, “What’s next?” The
examples used in this article are
something called 'e-discovery,'
The Last Two Jobs In America
(law firms’ using software to
examine thousands of legal
documents) and the use of
software to do computer chip design. Here’s the link:

Smarter Than You Think:  Armies of Expensive Lawyers, Replaced by

Cheaper Software 

That second article, a NY Times Op-Ed by Economist Paul Krugman, discusses

the “hollowing out” of the middle class:

Op-Ed Columnist:  Degrees and Dollars and subtitled, 'The hollow promise of

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good jobs for highly educated workers.'

And that leads me to the third article, which ties into the overall effects of these
technological "advances" on education—the inevitable negative feedback loop.
That’s not the point raised in the article, but the inference is hard to ignore. I
would have titled this piece, "Preparing A Nation for Walmart," but Bob Hebert
opted for:

Op-Ed Columnist:  College the Easy Way 

Colleges deliver the education that students’ demand and, absent a vision for
their own futures (the essential 'spark' that ignites a student’s ambition), that’s not
saying much. Students opt for fun. Colleges, competing for seats in seats, are
all too willing to oblige. The inevitable result is that academic standards have
eroded and most students who graduate lack, as Bob Hebert says, “critical
thinking, complex reasoning and writing” skills. The trend is clear; fun for all, no
heavy lifting please, and college degrees to nowhere.

Paul Krugman rightly points out that the “idea that modern technology eliminates
only menial jobs, that well-educated workers are clear winners, may dominate
popular discussion, but it’s actually decades out of date.”

Getting At The Bigger Questions This Raises

I remember back when computer technology was emerging in the early 60's. A
common topic was to what degree, and how quickly, computers and robots would
displace workers. As it turned out, these worries were premature. As more and
more people were employed in the computer industry, these concerns faded.
For decades, there was a net increase in employment. Even unskilled workers
could find a job in IT.

Well, it turns out our worries were justified; we just had the timeframe wrong.
The efficiencies promised by technology took a lot longer to take root and, not
until the recessions of the past decade enabled companies to layoff workers did it

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become clear that corporate America could shed jobs without adverse impact on
profits. In fact, profits in many industries increased dramatically. As the
economy recovers (driven more by foreign markets than our own) companies opt
to invest in technology to forestall the need to rehire workers.

What has happened, in fact, is that computers, whose effects have been
accelerated by high-speed communications, perform higher-level tasks formerly
thought to be beyond their capabilities. The result is fewer and fewer jobs, even
for those with advanced degrees. Call it the ‘Watson Effect.’

Think about this: In 1997, an IBM computer called ‘Deep Blue’ beat the world
chess champion, Garry Kasparov. In the finite world of a two dimensional
chessboard, this was relatively easy. Fourteen years later, an IBM computer
called ‘Watson’ achieved a far more ambitious task by beating, to an
overwhelming degree, the two most successful ‘Jeopardy’ players ever.

‘Watson’ consists of 2500 ‘cores’ and fills a small room, but don’t let size fool
you. How long will it take for something that powerful to fit on a desktop? If
‘Moore’s Law’ applies, the answer is about ten or fifteen years. If you add the
collaborative, parallel processing1 potential of the Internet, the timeframe may be
even shorter. “Yes,” you say, “but that was just a parlor trick—a quiz show.” No,
it was powerful demonstration of the ability of computers to understand language
and interpret complex, tricky questions. For those of you who missed it, here’s a
typical question2:

Q. “Kathleen Kenyon’s excavation of this city mentioned in Joshua

showed the walls had been repaired 17 times.”
Watson’s answer (in less than 3 seconds): “Jericho.”

In the past, computers and robots we’re employed to perform routine

computations and data processing tasks. Today they are able to do much more.

1
That is, where many processors are working on the same problem and information at the same time. They
could be arrayed in a rack in a signal room, or spread out of the Internet.
2
For more examples, go to http://www.youtube.com/watch?v=12rNbGf2Wwo

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Think Google on steroids. Then, think of that version of Google on steroids.

Workers Twitter while Rome Burns

We keep hearing the term "worker productivity" as if this were a measure of
human output—as if people were actually working harder or smarter.  Politicians
often applaud improvements in ‘worker productivity’ and brag about how
productive American workers are. (In politics, one must always pay homage to
the fiction of American Exceptionalism, no matter how out of date that notion may
be.) How many times have you heard that “American workers are the most
productive in the world?”

What is this statistic really telling us?

The Technology Productivity Index

I’m sure there are some people who are working harder, especially in
organizations that have suffered drastic staffing cuts, but I can assure you that
many more spend a significant part of their workday surfing the web, updating
their Facebook pages, reading newsfeeds and Twittering, (“In my cubie … this
job sux. Tx God for Angry Birds!”).  

No, what the ‘worker productivity index’ really measures is the degree to which
technology has supplanted people.  Or, as Paul Krugman puts it, “technological
progress is actually reducing the
demand for highly educated
workers.” It’s hollowing out job
opportunities for the majority of
the middleclass.

Did you realize that personnel

costs are now just 12% of the
cost of manufacturing a car? And
that’s not just on the manufacturing floor. I don’t have the percentage from 10

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years ago, but I wouldn’t be surprised if it was close to 50%. (I’m looking for it.
Any help here?) Check any manufacturing plant today. What you see are
robots, not people. The few people still employed are in engineering or behind
glass partitions, monitoring the robots3. Personnel costs are no longer a factor in
determining where to site an auto plant, markets are. We don’t outsource jobs
because labor costs are too high; we outsource to build product closer to those
who will buy them or to avoid tariffs or for myriad other reasons. (Only industries
that still rely on thousands of skilled workers, like clothing and shoes, outsource
jobs because of labor costs.)

Instead of a worker productivity index, a more accurate description would be

"technology productivity index”. This would drive home the reality of most
industries today—the degree to which technology is elbowing people out of their
jobs.

How Does This Relate to the Quality of Education?

This part demands that you pretend you are a high school or college student with
no experience and your whole life in front of you. (For the time-being, pretend
also that you couldn’t find Chicago on a map. Now you got empathy!) How
would you view your prospects in a country that has lost more than 6.5 million
manufacturing jobs since 2000? Oh sure, you’re an exceptional student – you
even know where Afghanistan is – and you intend to go into medicine or finance
(neither one of which actually produces anything useful. From a business
perspective, they’re expenses, not revenue.) Bear with me. I’m talking about the
average student, the fat belly of the bell-shaped curve. Maybe your father or
uncle worked in construction or as a machinist. Today, it is likely they are
unemployed or working a job that pays much less. But somehow, your parents
saved enough for you to attend a state college, or their low income entitled you to
student loans4 and Pell Grants. But, remember—essentially, you’re clueless.

3
And if you want to see the future, check this out: http://www.flixxy.com/high-tech-car-factory.htm

4
Loans you may never be able to pay back… but that’s another story.

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You don’t know what you’re going to do and you don’t have much ambition.
You’ve been told that your lifetime earnings will be much greater with a college
degree, and your loving parents want to see you succeed, so off you go. “I just
need that degree,” you think, “That’s my ticket to the good life. And college will
be a blast. And if I don’t go, then what? But, just don’t make it too hard.” Not to
worry.

Students may not be sophisticated, but they can’t miss obvious signs of a
declining job market. They are swimming against the tide of demotivation,
spinning in the vortex of “No Help Wanted” signs. They see unemployed parents
and neighbors; they see the underemployed now working part-time for $10 an
hour, displaced from jobs that paid three or four times that much a decade ago.
They see jobs going offshore or disappearing into thin air.

Really good students (like you) will do just fine, but the fat of the bell-curve will
have a hard time visualizing a rosy future for themselves. You’ll opt for the gut
courses, just to get that degree.

Why is it that today only 75% of high school students graduate from high school?
Why do more girls graduate from college than boys? Sloth, you say? Grand
Theft Auto? Drugs and alcohol? Yes, they contribute. But stop. What are the
best motivators? Is it the prospect of a rich and rewarding life, and a belief that it
is attainable if you work hard? That’s when distractions hold less sway. An
imagined life, one that marries aptitude, opportunity and prestige, is what makes
the difference between being easily distracted or motivated to learning. Without
such a vision, you have today’s high college dropout rates. Less than 50% of
male college freshman graduate.

Could a factor be that jobs that were traditionally dominated by men, like in
manufacturing, have disappeared? Gender is less a determinant of success for
today’s jobs. Women and men are equally adept at most jobs. In fact, I can
think of many reasons why men may not perform as well, like stereotype-
conflicted self-esteem, masculine expectations and testosterone (born out by my

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own observations in business.)

So, here you are; your male mentors are shuffling around complaining life is
unfair and it’s all those Republicans’… Democrats’… Bankers’ … Socialists’ …
Corporate elites’ fault, but, at the same time, your parents expect you to ignite
that spark of ambition that will launch you into a really high-paying career.
“Doing what?” you ask. “Well, something will come along… some exciting new
technology like the Internet or renewable energy will light your fire.” Trouble is,
on a macroeconomic level, those new technologies are likely to hollow out more
of the middle class by elbowing aside more workers. Think about the effects of
the Internet on retail, where a website can eliminate the need for retail outlets
and the function of bricks and mortar is reduced to marketing, useful for driving
people to a website. Don’t think Apple builds stores to sell computers. They
build them to sell image. Most people buy technology on the web.

While I agree with Paul Krugman's analysis, I’m not ready to accept his solutions.
I think expanding education opportunity; collective bargaining and tax reform
(where the rich pay a greater share) will only take you so far. They’re stopgaps,
necessary, perhaps, but not farsighted and, in today’s political climate, not very
realistic. Looking further into the future, it's hard to imagine how 7-9 billion
people will be productively employed.

In the 50s, the question about where the explosion of computer technology might
lead was academic; today it’s anything but. Is the workforce doomed to be
unemployed or underemployed? If you look at the trends of the last 60 years,
and in particular, the last decade, it’s hard to conclude otherwise. We read about
Americans loosing high-paying jobs who are now either unemployed or working
for $10 an hour, without benefits. The underemployment 5 rate in the US is about
18%6. We read that real wages of middleclass workers (adjusted for inflation)
have been stagnant for the past 10 years. Is work becoming obsolete? More
5
The unemployed, those who have given up looking and those who have taken part-time jobs just to make
ends meet.
6
The official unemployment rate includes only those people who have been actively looking for a job in
the past four weeks.

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and more of our nation’s resources are being directed towards projects that will
increase the wealth of a few, with the unintended consequence of impoverishing
the many.  

What’s the Endgame?

The pie is shrinking. What’s left of
the pie is being consumed by
those who own a seat at the table.
The rest are left fighting over the
crumbs. I don’t intend this to be a
political diatribe railing against
wealth or dividing the world
between the haves and have-nots.
Circumstances are accomplishing
that all on their own, people are

Great Ride, but where are we headed, anyway? just doing what people do. This is
an attempt to understand the
factors at work: to understand trends over a span of decades and what they tell
us about the future. I don’t blame those who have been successful and find
themselves on the winning side. I’ve been more fortunate than I could have ever
imagined. It’s just that the long-term consequences are likely to be very ugly if
we don’t figure out where we’re headed.

The stark reality is this: If you are not in a position to control the production of
wealth, you will be out of a job or minimally employed to the degree that you
make just enough to consume what’s necessary to keep the engine running—for
most of the middleclass, that means running on idle.

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