Update: After Trump’s Philly job party, Fed report warns robots are taking over
Training for digital jobs "is not cheap. You need machines."
Update: The day after President Trump hailed "the best economy in our history" at the Pennsylvania Convention Center in Philadelphia, where he bragged to the National Electrical Contractors Association how tax and regulatory cuts had fueled rising investment and hiring, the Federal Reserve Bank of Philadelphia reminded workers not to take good times for granted, with a new report on how digital automation is replacing hundreds of thousands of the six million jobs in eastern Pennsylvania, South Jersey and Delaware.
Trump and the Fed agreed on a key point: the nation will need more apprenticeship and training programs to prepare workers for new construction, healthcare, distribution, computing and food jobs in newly-digital workplaces. Too many high schools and colleges are still prepping young people for the jobs of the past; building-trades labor unions, which charge bosses and members to fund training programs, are a model that should be copied by more industries, according to Trump, Labor Secretary Alexander Acosta and Philadelphia Federal Reserve President Patrick Harker.
The Philly Fed report, "Automation and Regional Employment in the Third Federal Reserve District," was put together Lei Ding, an economist at the Federal Reserve Bank of Philadelphia; Elaine W. Leigh, a Penn doctoral candidate; and Harker, a Gloucester City native, engineer and economist, former Wharton dean, and ex-president of U of Delaware.
Harker has made the central-banking job his bully pulpit for preaching the gospel of tuning our schools toward preparing more people for the altered job market, now that so many fields are going digital, and half of Pennsylvanians are over 40.
Black, female and low-skilled workers, and people earning less than average — but more than the minimum wage — are more likely to see their jobs replaced than college-educated, skilled, and white or Asian workers, according to the report.
New Philly-area jobs in occupations not so easily automated will include many tens of thousands of nurses and aides, waiters and food servers, warehouse worker and software developers.
There should also be increases in demand for managers, sales reps, maintenance and repair workers (to fix all those digital machines). In many parts of the region there will also be more opportunity for construction laborers and skilled trades workers such as electricians — and tractor-trailer drivers, despite all the noise about self-driving vehicles. Thus the interest in apprenticeships — because people aren't finishing school ready to work in many of these and other growing job categories.
"The risk is there. We need to be prepared for it, so we are in a better position to handle it," Ding told me.
Who's in danger? Collecting data from recent studies and localizing it for the relatively educated, well-paid, office-oriented Philadelphia-area workforce, they estimate that 200,000 clerks, cashiers and secretaries, 20,000 fast-food cooks, almost as many groundskeepers, and 10,000 bank tellers, among others, are likely to be replaced by computer applications or digitally controlled machines, maybe in the next ten years.
Black, female and low-skilled workers, and people earning less than average — but more than the minimum wage — are more likely to see their jobs replaced than college-educated, skilled, and white or Asian workers. Of low-skilled jobs, "one in four have a high risk of automation;" they write. For high-skilled jobs, less than one in 50.
New Philly-area jobs in occupations not so easily automated will include 140,000 nurses and aides, 110,000 waiters and food servers, 50,000 warehouse workers, 18,000 software developers. There be strong demand for managers, sales reps, maintenance and repair workers (to fix all those digital machines) — even tractor-trailer drivers, despite all the noise about self-driving vehicles.
This isn't just for kids: Training is extra important in states like Pennsylvania, where a majority of residents are now over 40, with skills that might not match employer demand.
To get into the fortress-like Fed to see Harker and Ding, I had to wait a full minute while the guard handcopied my driver's license information. Automation "is not going to happen overnight," Harker acknowledged. "We can adjust to it. We have time to respond to this. Firms will make decisions about capital deepening" — training workers, investing in worker-friendly machinery upgrades. "But we can't just do nothing. We have to think carefully about how we train the workforce for the next generation of jobs."
Who's "we"? Harker says a lot of solutions are already in the works, close to home. He cites employers, chambers of commerce, job-training programs, and trade-union apprenticeships that have added programs on general and specific skills for the jobs ahead. Plus high schools, plus community colleges — which have moved the most rapidly to help students prepare for new jobs — and area state and private colleges, which face a decline in high-school grads, and will need more useful programs if they are to stay in business.
One size won't fit all. The Trenton-Princeton and Philadelphia areas enjoy higher wages and more-skilled jobs, a little less vulnerable to digital automation, than old factory areas like Scranton-Wilkes-Barre or Johnstown-Altoona, for example. Harker is enthusiastic that Reading Area Community College, in an area that has held onto factories and continues to attract immigrant workers, "has done a good job of manufacturing training. There are a lot of opportunities and a lot of open jobs, and the community college is responding very nicely to this. They view it as their core mission."
There's a distinct approach in Lancaster, where Christian congregations have a long history of welcoming and sponsoring refugees, and aid in integrating some into local factory and food-processing jobs, and eventual business ownership, Harker adds. But training for skilled digital jobs "is not cheap."
Why aren't employers raising wages more, if they need workers so badly? Even when they do, it can take years to build a pipeline of skilled workers, Harker says. Entry-level welders, some of them young people supporting families, are attracted by slightly higher-paying but dead-end warehouse "logistics" jobs, though if they stay as welders and get specialized training, they can earn a lot more money, he says.