Donald Trump won the U.S. presidency in large part on a promise to help American workers displaced by trade and technology. That’s a worthy goal – but if he wants to deliver, he’ll have to rethink his approach. Above all, he’ll need to recognize that the modern economy is not just about digging holes and bashing metal.
To date, Trump has focused narrowly on industries such as mining and manufacturing – for example, by loosening environmental regulations on coal producers and by haranguing automakers in an attempt to keep jobs in the U.S. These efforts are woefully misdirected, and not just because technological progress and global competition should be embraced and not blocked. It’s also a matter of scale. Today, goods-producing industries have far fewer jobs at risk than the vastly larger services sector.
As a new Bloomberg analysis demonstrates, businesses such as department stores and landline telecommunications have recently become the biggest job losers among 350 subsectors of the economy. To be sure, overall employment in services has gone up since Trump won the election last November, but the effect of job displacement on many individual industries and their workers has been severe.
The coming decades may be even more disruptive. Artificial intelligence is threatening new swathes of the labor force. Researchers at the University of Oxford estimate that nearly half of all U.S. jobs – about 69 million – are vulnerable, particularly such low-wage occupations as office clerks, food servers and cashiers.
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Such projections are speculative, and it’s impossible to say exactly how technological change will affect the workforce. But even if the losses are smaller than the scariest estimates -- and even if new, as-yet-unimagined occupations arise to take up the slack – millions will face the huge task of adjusting. They will have to find new careers, learn new skills, and move to where their labor is in demand.
The U.S. is ill-prepared for this challenge. The main government retraining program, Trade Adjustment Assistance, focuses on manufacturing jobs that have shifted overseas or succumbed to foreign competition. That’s far too narrow. And little is being done to attack the other obstacles that make it harder for workers to switch jobs: the difficulty of moving without losing government benefits, zoning rules that make it hard for low-income workers to find affordable homes, occupational licensing that’s needlessly strict, and more.
The U.S. needs to furnish opportunities for retraining to all who lose a job through no fault of their own. Every level of government should cooperate with employers to create more ambitious and effective apprenticeship programs. Benefits should be more portable and other barriers to mobility – geographic and occupational – should be urgently identified and removed.
The future of jobs needs to be a much higher priority – and the president and Congress need to think a lot bigger.