Robots and Half-Jobs

Many news stations today have reported on Harvard Business School’s report, An Economy Doing Half its Job, by Michael Porter and Jan Rivkin. The news stories have concentrated mainly on the big picture executive summary of the report, where the authors point out that large and mid-sized firms are recovering in the U.S., but that the individual workers comprising the middle class have been thoroughly left behind.  One issue close to my heart is the state of K-12 education in the U.S., and this report does not make that picture a pretty one. K-12 continues to decline in quality, and what efforts business undertakes to help end up being piecemeal, never really positively affecting the systemic problems with education that we face across the nation. 

Fundamentally, the report is a snapshot of inequality. Some choice passages:

In the lower and middle strata of the income distribution, household incomes have remained stagnant in real terms for decades…Labor force participation in America peaked in 1997 and has now fallen to levels not seen in three decades. Real hourly wages have stalled even among college-educated Americans…Notably, all of these trends began well before the Great Recession. they are structural, not cyclical.

 

But the report does reach conclusions on the question of underemployment as well, in a section labeled An Aversion to Full-time Hires.  The leading paragraph is well worth quoting in its whole:

First, our survey reveals that business leaders in America are reluctant to hire full-time workers. When possible, they prefer instead to invest in technology to perform work, outsource activites to third parties, or hire part-time workers. For instance, 46% of survey respondents strongly or somewhat agreed that their firms’ U.S. operations prefer to invest in technology to perform work rather than hire or retain employees, while only 25% disagreed.

The report goes on to say, preferences for automation, outsourcing, and part-time hires are likely to lead to less skills development. True, the workers who run the automated equipment, the employees of outside vendors, and the part-timers may receive some training, but that is unlikely to offset the skills that are no longer developed in equivalent full-timers.

Many more details are in the report- particularly on page 22- and I recommend you leaf through the report yourself. You can download your own copy here.

 

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