Education and the U.S. Workforce

FASKIANOS: Good afternoon from New York and welcome to the Council on Foreign Relations State and Local Officials Conference Call. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. We’re delighted to have you on the call. We have participants from forty-six states on today’s call. As you may know, CFR is an independent and nonpartisan organization and think tank. Through our state and local officials initiative we strive to serve as your go-to resource for information and analysis on international issues that affect state and local governments. And we can offer you access to CFR publications such as the Task Force that we’ll be discussing today, expertise on a wide range of policy topics, Foreign Affairs magazine, and personalized briefings with our fellows.

You know, we know that the issues related to education and workforce development policy are some of the most pressing challenges that you face as state and local leaders. And that’s why we’re having today’s conversation with Chike Aguh, who’s been a thought leader in the area throughout his career. He recently served as a member of the CFR-sponsored independent Task Force on the future of the U.S. workforce, which we shared in advance of this call. I have circulated his bio, so I will just give you a high-level overview. He currently serves as a principal at the McChrystal Group, where he focuses on growth strategy. He’s also a partner at Inncuvate, a Maryland-based firm growing innovation-businesses and ecosystems. And before that he served as CEO of EveryoneOn, a social enterprise that has connected over five hundred thousand low-income Americans in forty-eight states to affordable internet, computers, and digital skills. He also worked as an education policy official with New York City Mayor Michael Bloomberg, a second-grade teacher, and Teach For America corps member.

So we’re excited to have him with us. For the ground rules, we will begin just with a few opening remarks that will be on the record that you’ll share with your colleagues. And then we will follow with a question-and-answer portion that we will keep off the record so that we can have a candid discussion. And you can also share and exchange best practices amongst yourself.

So, Chike, thank you very much for being with us. As I mentioned at the outset, you served as a member of our independent Task Force on the future of jobs. And I thought maybe you could talk a little bit about the findings and recommendations from that report, what jobs are at risk for automation, and how policymakers can deal with these as they’re thinking through their workforce.

AGUH: Irina, thank you so much. And really, thank you to everyone who’s on the call today. I particularly have affinity for this group. I started my career with Mayor Michael Bloomberg in New York City almost fifteen years ago as an education policy official, and also spent some time working with Governor Deval Patrick when he was governor of Massachusetts, working also on education issues. So this is, again, very, very close my heart, and you all are at the front lines of creating a future of work for everyone.

So what I wanted to do was frame first the challenge of the future of work. And I’d like to be really precise about it, because I think it’s important to ground us. Talk about kind of the four buckets of recommendations that are in the report that our Task Force came up with. Again, it’s a long report, very detailed. I want you all to delve into that at your leisure, but I want to frame those recommendations. And then lastly I want to speak about kind of the role that you particularly can serve as officials in local and state-level government who, again, are really critical to this. From there, hopefully I will be quiet after that and then would really love to have a conversation.

So let me frame the challenge to future of work, as we saw it. And let me frame it in two areas—one, talking about the jobs that are at risk from automation, literally not existing, and then secondly the jobs that are going to change due to automation. So the example that I always talk about with automation is the rise of autonomous vehicles. When you look at autonomous vehicles, when we were doing our Task Force the belief from all the people that we talked to was between 2030 and 2040 we would see those vehicles en masse on long roads, likely starting with commercial trucking, and the moving to public transportation, and then slowly—moving slowly to consumer.

When you look at the data, there have been predictions that this will increase U.S. GDP by at least $800 billion a year and, of course, those of you who have worked in this industries, that development logistically will be a huge boon in terms of just efficiency. The downside is that driving vehicles is the most commonly held profession by American men. If you look at the data, there are almost as many people who drive a vehicle for a living as there are teachers, roughly 3.1 to 3.2 million. And, again, by between 2030 and 2040 many of those jobs are going to be at risk. That is one aspect of this challenge, the jobs that are truly going to be at risk because of these new technologies and phenomena. And we can imagine a number of technologies that could have a similar effect.

Secondly there are the jobs that are going to change. And McKinsey has a great figure about that for all jobs, about 30 percent of that job can be automated. So those jobs are going to change. One example that I always use is that of the loan officer. If you were to think about when I was much younger, a loan officer was a person that you went to, usually at a bank or some other commercial institution. You would bring a number of documents saying how creditworthy you were. And that person would make a call whether you got a loan or not.

That job is very different today. There is still a person to whom you bring your documents and all your stuff. And usually at some point in the conversation they’ll step into a backroom. And when they come back out, they will tell you if you got the loan or not. What they’ve done in that back room is made—you know, is they consulted an algorithm to a greater degree of specificity and accuracy than a human being, who is credit worth and who is not. And so the call who gets a loan now is less and less as a loan officer, the person. And that job as a loan officer is more about front-end prospecting, making sure the right people come to the door, and then back-end servicing. So that job is now very different. And, again, across our economy that’s going to change.

And so think about those two challenges to the future of work as you see it. Some jobs that may go away entirely and some other jobs are going to change fairly dramatically. So the question is, how do we make sure that people are ready for those two types of phenomena that are going to exist within our economy? And so when we looked at this as a Task Force, what we came up is really four buckets. And I want to talk about those four buckets at a high level. I would love to dive in in the conversation. I think one thing that we started out with was that generally the future of work, when you have this conversation, solely focuses on the worker, which is super important. But they—that is necessary but insufficient, because there are other things around the future that also have to be right to make that future work, no pun intended.

So I’ll go through these four buckets really quickly. The first bucket starts with a question which is for there to be a future of work, there has to be work. So the question is, in your state, in your jurisdiction, where are the jobs of the future? Where are they going to come from? And how can we accelerate their creation? If you look at our recommendations, we focus on a number of things that is meant to increase the amount of jobs that are going to be there in the future because when we spoke to a number of economists—and I’ll tell a funny story here. We went to the MIT media lab, and we were able to convene a group of extraordinary economists, technologists, people who think about this on a regular basis.

And we asked them a question, which was: In 2050 will the U.S. economy endogenously, organically create the amount of jobs that we need to achieve full employment? And when we asked that question, we got a room literally split down the middle. Some people said, the machines are going to wipe out all the jobs. Some other folks said no, no, no. It’s going to be like it’s always been, the machines will create more jobs, but they’ll be different. And the truth is, we don’t know. And so what we came to, as a Task Force, is that jurisdictions need to proactively take steps to make sure that there will be work.

And so the way to do that is a couple of things. And lots of these are tools that are already in your toolkit. But how do we increase the success rate of small businesses, because that’s where most Americans work, through things like, again, intelligent reduction of regulation, making sure that small business owners, particularly of really small mom and pop shops, have the business skills to actually persist. Because maybe some small businesses are not necessarily good at accounting or marketing, but they are good at a particular service. So how do we give them the tools?

Similarly, how do we invest in the innovations that are required to power that economy? Again, that’s generally something that’s really thought about at the federal level, but if you think about any of your local or state jurisdictions, each of you have community colleges, state colleges that are producing IP on a regular basis. How many of you are satisfied with your technology transfer? I’ve never met an official who is. And that’s another way that you can begin to put fuel in the engine of your economy, locally or statewide, to create those jobs. That is where the conversation has to start. Where will those jobs come from?

Secondly, once we have the jobs, how do we make sure that there are the people who have the skills to do them. And this is where I think you all, and the role that you serve, how do we—how does government and all of the other relevant institutions have an idea what that private sector’s going to need now and in the future? And then how do we reverse-engineer our education system going as early as pre-K all the way up through workforce development to make sure that that’s happening? So as—I’m going to sing to choir here, but all of you know that now college is, let’s say, may not be what is for everyone to get them into the job that they want, or the job that they need.

Does not mean that college is not necessary. In fact, for many jobs it’s still very required—(inaudible)—value. But how are we adding certificates, credentials, associates degrees, and credentials that, frankly, we have not solidly figured out, to that mix? And how do we make sure that they are tied to what the market needs, and of a quality that they actually need when people get them? I’m happy to dive in there. And, again, like, a lot of states—I remember when I worked for Governor Patrick, he convened his P-20 Council. I remember the—I expect that many of you have similar councils. But how do we make sure that all of those parts of the education system, from elementary to tertiary to advanced and workforce development, are all walking in lockstep to make sure that those workers have those skills.

Second bucket: Few other buckets that we tackled which are generally not talked about as much are, thirdly, how do we make sure that once you have the work and the worker that they can find each other? And I’ll use a very particular example here. I’m from Prince George’s County Maryland. We are right—literally, above the northeast and southeast part of Washington, D.C. And in my home county MGM built the largest casino on the eastern seaboard. In the first two years of that casino, they had probably between three to five thousand open jobs. Most of those jobs were in things like CDL, food service, building and groundskeeping—things don’t necessarily actually take a long time to train someone on.

In my home county as well, we have an unemployment rate that usually sits two points above the statewide average. So you have a place that has work, and people who need work. But for years that casino couldn’t fill all of its jobs. Very simply, there was a—there a—not a mismatch, but a lack of matching between people who could do the work and the work that needed to be done. And the question is, how do we solve that? Because to be very honest, that kind of a—that’s almost a crime, the fact that you have people who need work and work that needs to be done that can’t find each other. That is capacity that could be put to work that’s not, and that’s the real low-hanging fruit. But we’ve not solved that as a country.

Lastly, how do we set up a social safety net that supports a worker through this whole process? Again, if you think about our social safety net system, it largely exists unchanged from the new deal to roughly the 1950s, when we created Medicare and Medicaid. The example that I always use here is if you think about 1962-ish, John F. Kennedy talks about trade adjustment assistance to basically help workers who have been displaced by factory closings and trade. You can fast-forward to 1983, the year that I was born, and you can go and look at the announcement speech of Gary Hart when he announced he was running for president. He talks about using community colleges to reskill workers and create an account for them to do that. You can go to 1993, Bill Clinton’s first State of the Union, when he talked about using community colleges to do the same thing.

And what you can see is a safety net that has not kept up with the changing economy—again, from industrial to service. From service, where we are now, to something else entirely going into the future. And we must update those. And the question is, how do we do that, particularly in ways that allow workers to move efficiently from one job to another seamlessly, and not necessarily be caught in what Jon Gruber, the great economist from MIT, calls job lock, where people stay in a job where they essentially shouldn’t be, which is potentially is not what they want to be, which potentially isn’t even the smart place to be, because of their benefits. And a lot of their safety net for themselves and their family are tied there.

So those are those four buckets. Again, what is the work of the future? How do we make sure that we have the workers who have the skills to do that work? How do we make sure that those workers can find that work, and vice-versa? And lastly, how do we make sure that there’s a safety net to support them the entire way? Those are really the four buckets or recommendations that you’ll see in our report at CFR.org/TheWorkAhead. Feel free to go into—and, again, if you have questions about those recommendations I’m happy to tackle those during our conversation.

And then lastly, I really want to talk about you all. You all, representing forty-six states at local and state-level government. And, again, you all are, I would argue, critical players who have not been enough part of this conversation, I think less because you don’t want to be but because I think Washington has not necessarily thought enough about you. And I’ll say two things about where you all have particular value. Number one, you all being tightly tied with your private sector, knowing what it needs, so that you can create the structure or the policies to create the skilled workers that they need—number one. One-A—or one-B, rather—is also that being tightly tied with that public sector so that you can get into things long term, not just about necessarily reducing tax rates or reducing regulation but thinking in a really smart way about those macro issues that are going to affect their success, like the creation of skilled workers.

 Secondly, if you look in our report what you will see is all our recommendations are not just for governments. A lot of our recommendations are not just for the federal government. They’re for state government, they’re for local governments. But they’re also for the private sector, and they’re also for higher institution. And what’s needed, we find, across a number of jurisdictions is a convener and a convening body function platform to get all these folks around the table and moving in the same direction. Very, very rarely is there anyone with more legitimacy than your mayor, than your governor, than your state legislators, than your local city council people. You all have the legitimacy to actually get these folks together and rowing in the same direction, and it’s a power that you should not underestimate.

So I’ll end my remarks there. I went through a lot very quickly. Again, happy to have a conversation. And, again, thank you all for being on this call and I really thank you for what you all do.

FASKIANOS: Thank you very much, Chike Aguh, for doing this call, we really appreciate it. We are going to continue this conversation. We’re trying to work out a date for former Secretary of Commerce Penny Pritzker to lead a discussion. She was the co-chair of this Task Force. So we will continue to explore these issues with all of you. And we also just released a Task Force report on innovation, which is also available on our website, which is the follow-on to this report. So we’ll also be organizing conference calls to focus specifically on the findings, the recommendations from that Task Force.

Chike, we appreciate your being with us, what you’ve done in your career, and sharing your expertise. You can follow him on Twitter at @CRAguh. And please, we hope that you’ll share your feedback with us on how we can support the work that you’re doing. You can email us at [email protected]. And if you need any additional resources, we’re standing by to be of service.

So thank you all again. Thank you Chike. And we look forward to reconvening.

AGUH: Thank you so much.