Ball State University sits in Muncie, Indiana, at the heart the “Rust Belt,” so educators there have the right to be pessimistic about the drift of the U.S. economy. But a report by the school’s Center for Business and Economic Research goes even further.
“We found a toxic brew,” said CBER Director Michael Hicks. “Automation is likely to replace half of all low-skilled jobs, and roughly one in four of all American jobs are at risk from foreign competition in coming years.”
This is happening right on Hicks’s doorstep. While the nation’s most vulnerable area is the Aleutian Islands, some of the hardest hit places are likely to be Midwestern counties only 15 minutes from his office.
These areas face a downward spiral fed by shrinking job opportunities and the severe damage that can have on entire communities. As people lose their ability to make a living, they lose their resilience to bounce back, get retrained and transition to other careers. There are fewer new jobs in the entire region, so the surrounding communities also grow poorer. Many residents find it necessary to move, which not only disrupts their families, but their children’s education as well, undermining their chances of advancement.
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This “clustering” of declining areas around the U.S. – often in this zone of discontent – accounts for much of the polarization in voting patterns. The study said that, “With broad job losses, red districts get redder, and blue districts get bluer. Any observer of the 2016 presidential primaries will appreciate that.” The political promise of more jobs by the Trump administration hasn’t helped revive these local economies, and neither have longstanding federal and state programs designed to attract new business, the study went on to say.
While the nation has largely recovered from the 2008 recession, the disparities between rich coastal areas and poor Midwestern ones remains. For example, during the recession Montgomery County, Maryland saw its unemployment rate reach 6 percent, while in Elkhart, Indiana, it soared to 20 percent. The relative decline in joblessness since the recession hasn’t changed the basic equation.
Some of the jobs most vulnerable to being exported to other countries might surprise you. According to the study, these include so-called STEM, or science, technology, engineering and math, jobs, such as computer programming, data entry, electrical and electronic drafting, and computer and information research. Among the occupations most likely to be disrupted by automation in the years ahead are some people in the mathematical sciences, such as math technicians, who typically work on engineering projects or are involved in scientific research. Technology also threatens to make insurance underwriters obsolete.
Work that’s harder to hand over to a machine or outsource includes professions where you have to reach out and touch someone, according to the study. That includes jobs such as recreational therapists, front-line supervisors, mental health and substance abuse workers, audiologists, social workers, and occupational therapists.
“Sometimes we just train for the wrong things,” said Hicks, an economist. “Right now, there’s a shortage of truck drivers, but that can be automated in a few years, leaving a lot of younger people unemployed.”
The CBER study also shows that the U.S. labor market increasingly shuttles workers from the middle class to either low-skill or high-skill occupations. The Center then linked those conclusions with data from the U.S. Bureau of Labor Statistics to identify the parts of the country experiencing the most growth, usually urban labor markets, as well as the biggest declines in rural pockets of the South and Midwest.
For many American families, the conclusion was devastating: a lifetime income loss of about 20 percent for displaced workers, and a post-displacement impact up to 20 years after job loss.
“Considerable labor market turbulence is likely in the coming generation,” Hicks said. And with a note of sarcasm, he added, “If you liked the economy over the last 15 years, you’ll really like the next 15 years, too.”
Source: CBS News – Moneywatch