The focus in the labor market over the past year has been on the labor shortage. Not all workers who left their jobs during the COVID-19 recession have returned as the economy has improved. This situation has left many businesses short of help.
One of the reasons for the shortage is that many workers have moved on to other jobs that pay better. So, there’s not only a labor shortage, but also a labor reallocation.
Economists agree the reallocation of workers will continue in the future, and likely at a faster pace. The reason is the fast development of new technology impacting how work tasks are accomplished.
The big questions are: how will this technology change the labor market, what kinds of jobs will expand and what kinds will shrink, and does North Carolina have the training programs ready to facilitate the shift in jobs?
Technology has been changing the labor market for decades. The technology of tractors and harvesters took the place of thousands of farmers who moved to the city to work in factories a century ago. Later, new automation in factories pushed many workers to the service sector after World War II.
Today, technology is rapidly expanding. Any task that is done over and over, in the same way, can be accomplished by a machine. But the scope of what machines can do is growing. “Artificial intelligence” — which is based on replicating human decision-making — is allowing machines to do tasks never before contemplated, like driving, cleaning and reading data and charts.
Futurists expect the emerging technologies will replace many jobs in hospitality and leisure, manufacturing, sales and even personal services. At the same time, there will be growth in jobs in sectors like information technology, the sciences — particularly engineering, computers and life sciences — as well as health care and financial and business services. In summary, there will be a greater need for workers who think and solve problems and less need for workers who perform repetitive and physical tasks.
I call this coming change in jobs the “great job shift,” and I and many other economists think it will be a big feature of our economy in upcoming decades. Workers entering the labor force will obviously want to be aware of both increasing jobs and decreasing jobs. Perhaps more importantly, we want to make sure there are retraining programs ready for those existing workers who need to change occupations.
North Carolina has highly respected public universities and community colleges that are ready to help train new workers and retrain existing workers for future occupations. However, existing workers who are older and have families to support don’t have two to four years to learn new skills.
Therefore, North Carolina also needs educational programs available to rapidly re-skill existing workers, programs that take months to finish rather than years. The state also needs an expansion of apprenticeship programs, where an individual learns new skills on the job. Recently, North Carolina expanded funding for apprenticeships.
Sometimes workers who lose jobs can find new jobs in other regions of the state, but they don’t have the funds to relocate. The state could consider establishing a “relocation fund” for workers who have found jobs in other regions but who have financial constraints on making the move.
Through its NCWorks Centers, North Carolina has served as a clearinghouse for businesses seeking workers and individuals needing jobs. The state may want to consider expanding the use of this information in two ways. One would be to actively suggest matches between businesses and workers. The second would be to use the information on the kinds of jobs workers lost and the types of jobs that need filling to inform educational institutions of skills in demand.
Unfortunately, sometimes job shifts occur on a large scale, as when an entire company shuts down. Such large-scale closures can be devastating to local communities. North Carolina could think about establishing a “rapid work response unit” to assist displaced workers and communities when large business closures occur. The unit would have two responsibilities — making sure short-term assistance for necessities quickly reaches impacted households and helping put displaced workers on the path to re-skilling and re-employment.
Economies constantly change over time as new inventions and innovations occur. In most cases, these changes improve our lives, but there can be problems for some workers in changing from outdated jobs to new jobs. These changes will continue in the future, but probably at a faster pace. Do we have systems and programs in place so everyone benefits and no one is left behind? You decide.
Walden is a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University.
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