Thomas Friedman’s now famous book The World is Flat laid out a gloomy future for American workers. According to Friedman, technology has leveled the playing field at both ends of the labor market. For high-tech, high-skill American workers, outsourcing to India will change their ideas of job security as engineering, computer programming and the like are moved to cheaper, equally skilled Indian workers. At the other end of the labor market, relatively low-skilled American manufacturing workers are being undercut by cheap Chinese workers.
If you believe the globalization punditry, we better all learn Mandarin as soon as possible. In the new global economy, China is kicking our butt. The Asian powerhouse is gobbling up most of the world’s new manufacturing jobs and low-skill American workers are increasingly left scratching their heads. American companies are outsourcing manufacturing operations there faster than you can say, “Yuan’s up?”
For China, that means massive growth and development, the likes of which have not been seen since the industrial revolution. For workers in America—and specifically for low-skill, low-wage workers here in New Mexico—it means it is time to wake up and smell the ginseng.
Arguments about greedy, disloyal multinational companies aside, the reality for American workers, including those here in New Mexico, is that they will need to drastically and rapidly upgrade their skills or become irrelevant.
This may all sound like heartless economic Darwinism. It probably is. But short of a tougher trade policy to address the enormous U.S. trade deficit with China (we need one), or more pressure on U.S. consumers to save more (unlikely), or adding China to the Axis of Evil (not a good idea), the reality is that China will continue to pursue an aggressive economic strategy that undercuts most American manufacturers. Without a better-trained workforce, especially in manufacturing, the U.S. is doomed.
Two other important trends add urgency to New Mexico tackling the workforce development issue aggressively and immediately.
The first is the so-called “labor crisis,” a national phenomenon coming soon to a company near you. According to federal government estimates, in the next decade, the U.S. economy will create about 10 million more jobs than we have people to fill them. An estimated 76 million baby boomers will be leaving the labor force in the next decade, but only 48 million workers 40-and-under will be available to replace them.
The second is the mismatch between today’s education system and the needs of the new economy. Richard Murname and Frank Levy in their book Teaching the New Basic Skills: Principles for Educating Children to Thrive in a Changing Economy explained that the demands for basic literacy and numeracy skills in today’s economy have grown dramatically. Even though schools have made some improvements over the past two decades, international competition has left many American high school graduates without the basic skills they need to earn a middle-class wage.
Despite these sobering prognostications, here at home in the greater Albuquerque metropolitan area, things seem to be booming. New high-tech companies from solar manufacturing to aviation to film are growing all around us. The workforce to serve those exciting new industries, however, is not growing as fast.
Rusty Schmit, president and CEO of Advent Solar, a maverick, solar panel manufacturer in Albuquerque, talks about the strategic initiative the Germans have undertaken to lead the new solar photovoltaics (PV) sector. He says the Germans have created more than 100,000 new jobs in the industry, including in the less-skilled, less-developed former East Germany. An aggressive strategy to build the expertise and workforce has made the Germans leaders in this important new industry. It’s the kind of strategy we need.
In aviation, Eclipse is revolutionizing the Very Light Jet (VLJ) industry by offering an affordable (for CEOs, at least) jet that will change the way we travel. The product is moving from development to manufacturing in the next few weeks once they receive final certification from the FAA. Will Eclipse be able to hire most of the workforce to build this exciting new jet locally? The company hopes so. But with serious challenges in our workforce system, there will need to be a concentrated strategy to retrain existing workers for this new process and to begin training new workers, now in high school.
It is a tough new world economy. The growth in the developing mega-countries of China and India, and other nations like Indonesia that are sure to follow, is good news for them. However, for workers and policy-makers here at home, it is time for a major paradigm shift. Major investments in workforce development must be a central piece of our future economic development strategy from Albuquerque to Washington, D.C.
The truth is, in the new economy, Albuquerque and the state as a whole are well-positioned to be winners. There’s a booming film industry, demonstrated by the multimillion-dollar investments being made in the state by major studios such as Lions Gate and Culver City. There’s a nascent commercial and space tourism industry already attracting several space-related companies to the state. There’s a revolutionary aviation industry led by Eclipse. And there’s a new renewable energy industry with solar energy companies like Advent and Sacred Power leading the way.
With all these new industries, New Mexico’s economic future looks bright. But will we have the workforce to serve these industries? The answer is “maybe.” That is, if we make some tough decisions pronto.