The issue is critical given the biggest social and economic challenge facing the world — the dislocation of workers by artificial intelligence and automation. This transformation is exacerbating the crisis of inequality. So far, the answer from politicians of both parties is simply for those individuals to “re-skill.” This is a mistake — and one we’ve made before.
In addressing the last major disruption — globalization — policymakers’ attempts at labor-market reform lagged behind rapid economic transformation, thus undercutting workers. Today, expanding access to skills must be part of a broader agenda that results in workers obtaining power in the marketplace; they should share in the wealth their know-how creates and benefit from the data their engagement provides. This is what will bring back income growth and career security and preserve the dignity of work.
To start, employers need to make their employees’ talents more transparent, so workers can capitalize on their value. Today, people trained on the job have no way of marketing the skills they have gained to potential new employers. An experienced auto mechanic, for instance, is viewed as just that by the labor market, even though his employer values him for his in-depth knowledge of intricate machinery, electrical systems and computerized diagnostics. If that auto mechanic wants to get a job he is surely qualified for as a repair tech at an advanced manufacturing company, he is nearly powerless to do so. Some may point to licensing as a solution (about 30 percent of U.S. workers require a license to do their job), but licenses rarely reveal the underlying skills necessary to a job.
However, if employees were provided with a skills transcript — a verifiable account of all the skills in their job — they would not be constrained by their job title and could pursue any job that needed their unique collection of skills. As technology transforms the workplace, such a transcript could be a passport to opportunity; individuals could market their skills portfolio, and employers would gain access to a broader pool of talent.
Our lack of transparency around skills is far from the only way that skills have been systematically undervalued by the labor market. Employers routinely use the traditional four-year college degree as a catchall qualification. Indeed, that experienced auto mechanic likely wouldn’t even be considered for that advanced manufacturing job without a bachelor’s degree in mechanical engineering. The almost 7 in 10 Americans without a college degree are screened out of many jobs in the digital economy despite marketable skills and capacity to learn.
Employers are beginning to accept nontraditional certifications as credentials, which is encouraging, but we must do more. After all, a self-taught coder may be just as good as one who took a 12-week course at a local boot camp, and a carpenter who learned in a friend’s garage may be just as good as one who completed a class at a community college. Much like how colleagues can use Web-based tools to “endorse” an applicant’s skills, we need an infrastructure that allows for skills gained through such channels to be endorsed, displayed and valued.
State and federal governments wield a tremendous amount of power to support workers and encourage companies to do the same. They can increase and direct financial support for lifelong education and training, and promote improved data-sharing among sectors and states, so educators know what kind of skills they need to teach and individuals can decide which training programs are worthwhile.
When viewed through a lens of workers gaining power in the labor market to advance themselves, the tax code appears ripe for examination. A first step would be creating pretax “skills accounts” — like health savings accounts, but with the money to be used for education — and expanding use of training tax credits. We should look for ways to treat employees as a highly valued asset, not just a cost.
Unions can also contribute to individual workers’ market power as well as their collective power, through training, job data and advocacy. Because many jobs in the new economy fall outside the scope of unionization, unions need to look at how they also can support nonunion workers in achieving market power.
In the past, we’ve evaluated economic policy proposals from a politician or a CEO on a variety of metrics. But in an economy in the throes of transformation, it’s time that we adopt a new measure: Does it give U.S. workers more real power over their future?