Today I read in the WSJ that since Bush took office in 2000, the auto industry has lost almost 500,000 jobs. That kind of dramatic and steady job loss is indicative of manufacturing in America. The number of jobs that you can get without a college degree is shrinking. The amount of money paid by labor jobs is shrinking. Despite the empty promises of politicians, the middle class is vanishing because the jobs that created the middle class are vanishing.

economic transition number two

The post-WW2 American way of life that we are used to is going away because of two trends:

• technology allows fewer people to do more work
• fewer people have the skills for technology jobs

In the great depression, the US was largely an agricultural economy. By WW2, our economy gradually moved to a manufacturing one. The jobs lost in farming were replaced with jobs in factories and the machines that factories built allowed fewer farmers to grow more food than before. Farm labor went down even as yields went up such that today farming is about 2% of the workforce.

Not for the first time, I find myself asking if the Information Economy can support our country. Are we are seeing that same painful transition all over again except this time the labor force is not able to make the transition? Are we doing more work with less people and we dont need the people?

In the last transition, unskilled farm laborers could find jobs in factories. There was unskilled labor to do in factories and people could learn the new skills on the job. But that is not true today.

A 40 year old factory worker from a Chrysler factory is not able to step into a job producing biotech drugs or designing a new microchip. Many of them cannot even operate the new robotics that are used to make cars in the very factories they used to work in.

We dont need those cars from Detroit but those people do need jobs to feed themselves and their families. I fear that the advance of technology is creating structural unemployment on a massive scale and we as a country are not facing the issue.

raising the minimum bar

Recently I was thinking about a similar but different aspect of this issue. A young man came to our door selling magazines. He was in a program to turn his life around. He was 19, had a 2 year old daughter, and no skills or education. I immediately liked him. He asked me what I did to get where I am today so that he could learn from me...

Well I studied hard in high school and got a scholarship to a top private school. Then I got into a top university. Then I picked a very hard degree of study which I knew would pay well and have some job security. Then I got jobs that payed well, I worked hard, and I moved with changes in the industry. Then I got a masters degree from another top university. All of which before I took on the challenges of parenting.

What could I tell that young man? Did he have any hope in hell of following my path given that he was already 19 and a parent? I found this personal experience to be both profoundly moving and sad.

The bar today is so high and getting higher.

My grandparents immigrated to this country in the 1950s with no education, no money and two children. Through physical labor and two jobs each, they were able to make a life for themselves. Significantly, they were also able to get their children a good education in public schools. Neither of my grandparents finished high school themselves but they knew that education is what set people apart. They had enormous respect for education and there was never any doubt that their children (or grandchildren) would get good degrees as a way to secure their financial future.

Today you pretty much need a college degree from a top university and in an applied degree of study. Most leaders I work with have masters degrees or phd's.

But everyone isnt able to get a law degree. Everyone isnt suited to configure email servers or work in a clean room. Someone still has to cook the food, mow the lawn and build the cars. What do we do with all those people? What kind of life will they have in America?

moving fast with no directions

The pace of change in the information economy is amazing. Computers barely existed 30 years ago and today Microsoft employs 90,000 people and is one of the most profitable companies in history. If you got in early, you probably feel like a king, like you and your stock option money are smarter than everyone else.

But how does the rest of America feel? My guess is that there are a lot of people who feel lost, confused, abandoned and afraid. They see the changes of technology but they dont understand it. Maybe they can operate an iPod but they have no idea how to make one. the changes threaten their jobs and they see people half their age making twice the money and then eliminating their job altogether.

When people are afraid, they react in two ways: a) they admit they are afraid and ask for help; b) they deny they are afraid and spurn help.

It strikes me that there are millions of (b) people out there and they may be the reason why our country feels so divided and irrational. I see this fierce idea that "Im as good as everyone else no matter how I talk or where Im from" in the 2000 election of Bush and the current nomination of Palin. Part of the 2000 election was that Bush was a "regular guy" not an educated guy. He talked like a moron, chopped wood, you can trust him. Why were Americans so drawn to the idea of Bubba running the country? Governor Palin's story is almost identical. Soccer Mom from the Boonies gets tapped by Washington to run the country. Brings tears to your eyes. It could happen to you!

There is a twisted logic at work here that creates a movement of the left-behind (and the literal Left Behind books) that seem to gravitate to the new Republican party. It is an emotional and irrational movement that Abe Lincoln would barely recognize. Listening to what Colin Powell says and comparing it to what other Republicans say, its hard to believe they are in the same universe let alone the same party.

the same coin

"Dont worry about me, I will be rich some day. Go ahead and cut those taxes. Its my money and I dont need no stinking socialism handout from the government." etc.

For years now, I have found the twisted logic of the Republican party to be baffling. I have friends that voice these opinions and when I talk to them, it is clear that they dont see the circular logic they espouse. It doesnt take long before they react harshly: I'm an elitist, Im attacking them, etc.

Why would the poorest people fight so hard for policies that hurt them and made the richest people richer? Why do we spend so much energy on the issue of abortion when our bridges are crumbling, are government is broke, and we are all worried about our jobs?

After struggling with trying to understand people, I now think we are just seeing two reactions to the same fear. Republicans reject the changes and want to restore the past through tax cuts and military spending. The Democrats have an equal pipe dream of restoring the middle class through government intervention.

Both reactions are two sides of the same coin. Both sides are reacting to the same fears about the future they are just doing so in opposite ways.

forecast calls for more of the same

Sadly, I dont think the transition we are experiencing is fixable.

As technology becomes more complex, it will take more and more training to contribute. The people that fall off the learning path or were never on it to start with will never find technology jobs. They will be left competing for minimum wage work or unemployed.

The best we can do is discuss the situation honestly and decide how we want to treat people. We could improve education. We could give more people a chance but it will cost money. Or we could continue down the path of every man for himself, but that too will cost money, largely in crime and quality of life. Money that we have less of every day as we lose jobs and make it up with debt.

Whatever happens, I think we are at an inflection point in history. This period may last a lifetime but life moving forward will be forever changed from life before. First we will face economic changes; soon we will face environmental ones.