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“Highest stock market EVER! Jobs are roaring back!” boasted Donald Trump in a tweet in December. The US president is the most prominent advocate of the idea that quantity is almost all that counts when it comes to jobs.
But job numbers alone are an increasingly crude barometer of economic health. For workers under pressure from changing technology and globalisation, a new measure is required, based on job quality as much as job quantity.
More subtle politicians have been quick to realise this. Philip Hammond, UK chancellor of the exchequer, referred in his Budget speech in November to a “relentless focus on getting more people into work”. But he added the condition that such work should be “good quality and well paid”.
A few days later, the UK government laid out four “grand challenges” of its industrial strategy, including the promotion of artificial intelligence. “Embedding AI across the UK will create thousands of good quality jobs and drive economic growth,” the strategy document insisted.
Recent history suggests the UK may be indulging in some wishful thinking. Automation is one of the forces identified by David Autor of MIT as squeezing out “good jobs” — the middle-skilled roles to which “ordinary working people” (to use the politicians’ mantra) would aspire.
Globalisation is another such pressure. The remainder of the workforce is polarising into high-level managerial and professional posts and low-tier service jobs. Such good jobs as survive demand ever more sophisticated skills.
For managers who hold on to their positions, this poses important new tests. Rick Wartzman, whose book The End of Loyalty is subtitled “The Rise and Fall of Good Jobs in America”, says the challenge starts with whether to cut jobs, or find ways to reposition staff for the automation revolution.
“Management is about making these kinds of decisions,” he told me. For instance, “[how] to put people, or combinations of people and technology, in the right position to maximise effectiveness. Doing an across-the-board cost-cutting exercise isn’t management.”
The Brookings Institution recently looked at 14m “good jobs” in the US and found that their “digital score” — based on the knowledge, skills and tools needed to fulfil those roles — had risen from 29 to 50 between 2002 and 2016, out of a possible score of 100 for the most “digitally intense” occupations. In other words, basic digital skills are now a prerequisite for positions — mechanic, nurse, builder — which traditionally open the door to advancement for the two-thirds of Americans who lack a college degree.
The same challenge is multiplied by many millions in populous, fast-growing countries such as India. One Indian manufacturing tycoon I met just shrugged when I asked whether he felt any responsibility to the staff he would have to lay off as he installed more sophisticated machines in his factories. His response was just one indication that digitalisation could slam the door in the face of many young Indians, who are counting on basic literacy and numeracy to open up decent production line jobs.
Sometimes, a lack of such skills also blights the future of people forced out of good jobs. In Amy Goldstein’s book Janesville, workers laid off by General Motors flocked to the Wisconsin town’s college to retrain, only for their teachers to discover that some “didn’t even know how to turn [a computer] on”.
One responsibility of future managers is to ensure that this ground-level digital education is made available. “The next phase of the digital skills push needs to add a new, less-glamorous focus on IT basics such as Microsoft Office and basic customer relationship management (CRM) software to the cooler agenda of scaling up the code schools,” Brookings fellow Mark Muro wrote in a blogpost about the think-tank’s report.
The model, says Wartzman, needs to change to one in which managers offer staff opportunities for lifelong learning. Ideally, this should happen on the job, rather than after redundancy, when the efficacy of retraining may be undermined by the general lack of opportunities, as happened to Janesville’s unemployed car workers in the depths of the 2008-09 recession.
The last resort may be to find ways to change the status of what used to be considered poor jobs. In Taiwan, the government successfully improved urban cleanliness by upgrading the “bad job” of street cleaning. It now comes with a salary close to the national average and a decent pension. Public competitions pit “clean teams” from different districts against each other.
It is an idiosyncratic example, but it underlines a point that Trump may want to consider. Creating more jobs is a fine goal; creating better jobs is even finer.
Andrew Hill is the FT’s management editor