Sunday, May 29, 2016

American Politics and the Productivity Imperative

Go to any small town in West Virginia, Ohio, or even Pennsylvania, and you may hear this complaint: “we need our manufacturing jobs back.” The factory workers and miners of the rust belt don’t particularly care about emerging global markets, data, or innovation. They just know that they had good paying, family-sustaining jobs, and now they don’t.

The Great Rebalancing defined in “What Happens Next” shows incredible opportunity to shift our economy, re-train workers, and grow. Federal policies and programs to educate and prepare people for high knowledge jobs could mean recovery, prosperity, and spending power for many families. Moreover, improving the skills of the workforce could help match workers with the jobs that firms are looking to hire, enabling companies to grow faster. Having more talent, ready to innovate new products, services, and business processes, can ensure American companies capture market share in emerging markets.

And yet, many American elected officials and candidates continually exploit the hopes of un- and under-employed rust belt families, reciting nationalist tropes about imported goods and immigrant workers, rather than honestly addressing unemployment and the future of the American workforce. Indeed, nationalism is one of the things the McKinsey article identifies as a potential barrier for growing the global economy in the next decade. Take for example, Donald Trump, who spoke in Harrisburg, PA in April of this year, promising to bring manufacturing back to the region. Rather than positioning the United States to benefit from the Great Rebalancing, Trump’s isolationist economic policy proposals (including a tax on imports from China, our biggest trade partner) would cause workers and American companies to be left out of the most significant economic opportunity since the Industrial Revolution.  

Hillary Clinton, on the flip side, must continually defend herself for acknowledging the decline of the coal industry, despite market and financial trends that show she is correct. To be sure, transitioning the existing workforce for a new economy, and communicating the need for that transition, can be politically tricky.

Preparing for the future workforce, on the other hand, can be straightforward. Working in local government, I have been interested in the concept of universal Pre-K for some time. Investing in pre-k has been shown to have long-lasting positive effects throughout the life of a child, and we know that Americans support it. According to a 2014 Gallup poll, 70% of Americans favor expanding federal funding for Pre-K programs. Kids who attend high quality pre-k are more likely to graduate from high school and attend college-- in other words, they are more likely to become the knowledge workers American firms need moving forward.

To me, this is a policy that Congress can pass and the President can sign on its own merit. Pre-K is worth doing regardless of the changing economy. It's also a way to prepare for the future, matching knowledge workers with knowledge jobs, fulfilling the productivity imperative.

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