Entrepreneur, Explorer, Angel.

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18TH February 2011

Culture - Entrepreneur

American jobs? Stuck in the middle with you…


Gerry Rafferty, rockin' the 70's thing

and  I don’t know what it is I should do…

Gerry Rafferty had it right, bless his soul. There is less and less in the middle these days, and of course, if you’re a “self made man” as the song says, someone is bound to hit you up, knock you down, or both (full lyrics below for the 70’s lovers).

This song was playing in my head as I was having monthly breakfast with NAE’s Bo Cutter, et al  and listening to MIT prof David Autor reflect on what happened to the middle of America, jobs-wise. This phenomenon, which also takes place in Europe, can be explained by the automation of routine tasks (thanks innovation!) and by patterns of educational attainment: (his words below).

  1. The economy is adding jobs at the high end of the wage scale (managers, professionals and technicians) and at the low end (food service, security and personal care workers).
  2. The economy is subtracting jobs in the middle of the scale, both white-collar (administrative, sales) and blue-collar (production, fabrication and repair).
  3. “Middle-wage, middle-skill” jobs were decimated during The Great Recession (2007-2009) while employment at the ends of the scale held steady (high) or increased (low).
  4. Jobs in the middle of the wage scale are characterized by routine tasks. These jobs are easily automated, computerized or performed in other countries. Rapid decline in costs of technology drives automation. Offshoring is properly considered a subset of automation since it involves the same technologies.
  5. Jobs at the ends of the scale are difficult to automate. High earners need advanced education, intuition, analytical and persuasive skills. Low earners need adaptability, mobility and language skills.

News that Watson wiped the floor with all prior Jeopardy legends would seem to support the theory of what’s sure to come: machines gut the middle class jobs. But perhaps the most fascinating of all this is the irony. We as entrepreneurs are exhorted to innovate, create jobs, create wealth, and hopefully invest it back into the economy (net of taxes). But  David’s data suggests that innovating and creating high-skilled jobs will, in the long run, serve to marginalize the skills in the middle, which are easily automated.

His policy recommendations were:  Encourage higher education and begin preparation early. Emphasize re-training programs to boost skills in the low wage sector. Invest in R&D and infrastructure to create new jobs.

I would add to that: Learn to learn, because with the speed of innovation it doesn’t take much to feel old and useless.

Here’s the rest from Gerry Rafferty and Steelers Wheel:

Yes I’m stuck in the middle with you,

And I’m wondering what it is I should do,
It’s so hard to keep this smile from my face,
Losing control, yeah, I’m all over the place,
Clowns to the left of me, Jokers to the right,
Here I am, stuck in the middle with you.

Well you started out with nothing,
And you’re proud that you’re a self made man,
And your friends, they all come crawlin,
Slap you on the back and say,
Please…. Please…..

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