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The American Prospect

Since the 1970s, the composition of the work force has changed significantly. While manufacturing cut many skilled, blue-collar, and relatively high-paying jobs, the “boom” in services created ever more low-paid, low-skill jobs (cleaners, restaurant personnel, drivers, health-care assistants, and the like), most of which paid less than $15,000 a year.72 The other trend was the growth in white-collar, technical jobs, especially in information and research sectors of the economy, requiring advanced training and higher education. According to the Hudson Institute survey Workforce 2000, by the end of this century as many as 52 percent of new jobs may require at least some college education.73

Yet the supply of so many educated persons is in doubt. For years the number of American Ph.D.s in mathematics and engineering (and faculty instructing them) has been inadequate, but while that may be another sign of a declining manufacturing culture, the shortfall can be made up by recruiting foreign doctoral students and professors. On the other hand, American industry has found it difficult to recruit workers to fill jobs not requiring a college education. The chairman of Xerox Corporation has declared that the skill levels of American society have “the makings of a natural disaster,” while New York Telephone reports that it had had to test a staggering 57,000 applicants to find 2,100 people qualified to fill entry-level jobs. As business spends ever more on training (the total may now be over $50 billion annually), there is increasing concern over the extent to which America’s educational deficits will reduce economic competitiveness.74

Demographic trends suggest the worst is yet to come. Of the new entrants into the work force, white males—currently the best educated sector of the population, especially in science, technology, and engineering—will comprise only 15 percent, and the rest will be women, minorities, and immigrants, with the latter two groups making up the two fastest-growing segments of the work force. The point here is not race per se, but educational access. Since minorities and immigrants have generally gone into low-paid, unskilled jobs, there exists a potentially enormous mismatch between educational levels and the forecast demand for jobs requiring advanced technical or higher education. Unlike Germany, Sweden, or Japan, however, the United States does not possess a systematic approach to remedial training or, the experts say, to vocational education as a whole, preferring instead to retain haphazard, laissez-faire methods.75

Demographic trends also influence the long-term American response to changes provoked by the introduction of robotics and automated manufacture. While intelligent robots are being designed for specialized circumstances (space exploration, undersea mining, hazardous-waste disposal), manufacturing as a whole has less incentive to automate production than in Japan. Although one might imagine that the “graying” of the Caucasian males among the American population would stimulate automation, the simultaneous “browning” trend provides a cheap labor pool in many repetitive jobs. Just as the relative cost of manual versus automated production hurt America’s early lead in robotics, so is it likely that demography and work force composition will slow any overall move to automated manufacturing.

This generalization may not apply to certain sectors of industry, for example to American factories owned by a Japanese multinational, or companies under pressure from East Asian competition and also able to raise the capital to make large-scale investments in automation, or firms preferring robots to poorly trained workers. However, with the collapse of America’s indigenous robotics industry during the 1980s, around 75 percent to 80 percent of robots sold to US firms each year are imported, worsening the trade gap. Moreover, if the investment in robots is not accompanied by retraining the redundant workers by either the company itself (as in Japan) or the state (as in Sweden), then the decline in well-paid, blue-collar employment would intensify; just as, if the surviving workers are not trained to work with robots, the increases in output will be much less than expected.

American agriculture will also be challenged by the newer global forces for change, certainly by biotechnology, and possibly by global warming. The biotech revolution in farming and food processing appears to offer enticing prospects to the large pharmaceutical and agro-chemical firms that have invested heavily in both research and production in this field and are constructing large factory complexes or “refineries” which, in essence, replace the traditional farm. As they also increasingly link up with giant food distribution and chain stores, conglomerates are emerging that will control every part of the process of providing food, from the seeds and fertilizer (or the in vitro hormones and genes) to the canned and packaged goods in the supermarket.

For American farmers themselves—and their communities—these trends are disturbing. Abundant agricultural output made the United States the reserve “bread basket” of the world for the past century, earning large amounts of foreign currency. Because of improved technology, American farming is becoming more efficient each year; in fact, according to the US Office of Technology Assessment, the United States has the capacity “not only to meet domestic demand, but also to contribute significantly to meeting world demand in the next 20 years,” enough indeed to meet the expected 1.8 percent annual growth in world population.76 While that forecast would be contested by environmental groups which believe that US agriculture’s long-term prospects are being damaged by overgrazing, loss of topsoil, decline in water supplies, excessive use of fertilizers, and other unwise methods that aided the original expansion of output, there is no disputing that present productivity per hectare is impressive. But that itself is now a problem.

The challenges facing American farming are large scale and structural. Even if only 3 percent of the total population is nowadays involved in farming, far more is produced than can be consumed at home. To avoid a crisis of agricultural overproduction—of which there have been several since the late nineteenth century—farmers have pressed US administrations to discover and open markets overseas. At present, however, such a solution is put in doubt by chronic imbalances in global supply and demand for farm products. Dozens of poor countries would welcome the continued flow of American food supplies, but have no funds to pay for them. Similarly, the erstwhile USSR and certain of its former East European satellites require food to make up for their own farming deficiencies; but unless international aid pays for this, there is no way that those societies can themselves provide the hard currency required. (In any case, if they do eventually manage to restructure agriculture, all or most of them could well become surplus food producers.) Efforts to lower or remove tariff barriers to American food imports into, say, Japan or Korea provoke violent reactions from local farmers.

Meanwhile the EC’s common agricultural policy, which subsidizes and protects millions of farmers, has eroded American farm export shares in both European and third markets—compelling the US government to subsidize its own farmers in expensive ways. The recent hard-fought GATT negotiations, which provoked riots by alarmed French farmers, have only slightly improved America’s export opportunities. But if in fact agreements were reached to phase out all subsidies and price supports—which is highly unlikely—the greatest beneficiaries would probably be countries like Australia, New Zealand, and Argentina, whose farmers are efficient enough not to need agricultural tariffs. While consumers might rejoice at the drop in food prices, many American farming communities would wither away.

It is here that another new technogy—the biotech revolution in agriculture and food processing—will make its impact. With artificial sweeteners having cut heavily into the American sugar market over the past decade, and with forecasts that the use of the bovine growth hormone to increase milk production could lead to a 50 percent reduction in the number of dairy farms by 2000, it is not surprising that some groups of farmers are campaigning against the new technologies. However, unless these innovations can be proven positively harmful to health or the environment—and therefore banned by federal agencies—the response is likely to be mixed. Many better capitalized farms could be attracted by the promise of greatly enhanced yields from “designer” herbicide-resistant seeds and the accompanying herbicides, or by the greater productivity that will flow from new information technology equipment.

What might this mean in overall numbers? One study by the US Office of Technology Assessment calculated that the new biotechnology and information technologies would be adopted by more than 70 percent of the largest farms in the United States, but by only 40 percent of the moderate-sized farms and about 10 percent of small farms. Many of the nation’s two million small farms are run by people with other income, so the impact there might be less. For the moderate-size, full-time farms, traditionally the back-bone of American agriculture, the results would be very serious as they struggled to compete. By the year 2000, the number of such farms might have shrunk to 75,000, compared with 180,000 in 1982. By contrast, the largest farms are expected to grow in size and efficiency, and by the end of the century a mere 50,000 of them could be producing around three quarters of all agricultural output.77 Whether they will still be regarded as farms, or simply as the upstream production facilities of food-processing companies, with wage laborers supervised by corporate-style managers, is an open question.78 In any case, the traditional style of farming, in middle America no less than in rural France, is little prepared for the next century.

Given these prospects, moreover, it is to be hoped that the “greenhouse effect” does not result in the temperature rises forecast by the gloomier studies on global warming; for that would increase the pressures upon farmers whose livelihoods are already endangered by the biotech revolution.

6.

Environmental changes outside the national boundaries are also affecting American society. For example, while the recent flood of Haitian refugees to the United States was prompted by political turbulence, another more important cause is that peasant landowners have eliminated the forests (only 2 percent of the land is still forested) and the subsequent exploitation and loss of topsoil have worn some areas down to the bedrock. With farmable land (only 11 percent of the whole) continuing to shrink, total fertility rates still very high, and population control negligible, more and more people—already the poorest in the Western hemisphere—are left with fewer and fewer resources. Given the mass unemployment rates of 30 percent, is it any surprise that many of them struggle to get to the United States and regard repatriation as close to a death sentence? And once they arrive in Florida or New York, is it a further surprise that—through no fault of their own—these immigrants are additional burdens upon the sorely pressed educational and social systems of the inner cities? Here, in microcosm, is an example of how entwined demographic growth, environmental damage, social and economic catastrophe, and mass migration have become.

It is while they confront these challenges that citizens of the United States are being urged to adjust to the borderless world of twenty-four-hour-a-day financial flows, electronic trading, and the globalization of business and communications. The general sense is that America enjoys enormous advantages in the form of giant multinationals and banks, traders, consultants, and service industries, the dominance of the English language and the US dollar, an entrepreneurial culture, and numerous highly educated scientists, engineers, designers, lawyers, and other “symbolic analysts” whose skills are in global demand.79 On the other hand, the relocation of industries abroad, the increasing redundancy of various occupations, and the inadequate educational levels of many workers for high-tech employment suggest that the lower four fifths (or more) of Americans may not enjoy the oft-proclaimed benefits of globalization. If demographic trends lead to a relative decline in the number of Americans with marketable skills, and if US multinationals find themselves increasingly pitted against foreign rivals with larger capital resources and better trained labor, those benefits may appear ever less obvious.

If the above analysis is generally accurate, the United States may not be a “loser” in the face of global changes, as many desperate societies in the developing world will be; but because of its social and economic structure—its altering demographic pattern, its educational and social deficits, its fiscal problems—it could be less than a clear “winner.” What emerges instead is a mixed picture: some industries rising as others fall, traditional farms losing as agribusinesses gain, consultants flourishing as blue-collar workers face fewer opportunities, the slow growth in overall per capita GNP barely concealing the widening gap between those whose skills are in demand and those whose skills are not.

Moreover, despite the proclaimed intentions of the Clinton administration and the possibility of some corrective measures being implemented here and there as the 1990s advance, the size of the federal deficit, together with the nature of American society and politics, makes it unlikely that a national “plan” for the twenty-first century will emerge such as may be formulated in France or Japan. Instead, there will be differentiated responses and local initiatives in the traditional American way: states and school districts will push ahead with their individual schemes; communities will grapple with local environmental problems; towns and cities will attack urban poverty in various ways; some regions will benefit from fresh foreign investment, others will suffer as American companies transfer production overseas.

There is a lot to be said for this sort of differentiated, decentralized, individualistic response to change: it is in the tradition of American free enterprise and its libertarian culture; and it is what the nation is used to. The United States is, after all, a demi-continent, not a small country like Japan, which finds it necessary to stress social harmony and organization in order for everyone to exist on its mountainous, crowded island-chain. America, by contrast, is the home of those fleeing from constraints elsewhere; it has offered an open frontier to dissatisfied people; and its sheer size, “escapist” culture, and lack of serious external threat has combined to foster dislike of organized, central government. This cultural heritage means that, as the United States turns to meet the broad forces for global change, its response is also likely to be differentiated, decentralized, and individualistic, “muddling through” rather than a coordinated, centralized attack upon the problems. After all, a country like Great Britain “muddled through” for a very long time.

But that returns us to historical analogy as well as to the core of the American dilemma. One hundred years ago, Britain, which was widely regarded then as Number One, was engaged in a similar debate about its future prospects. It was, of course, a very different society from America today, and occupied a different geographical position as the island center of a worldwide empire rather than a resource-rich continental land mass. Nevertheless, the dilemma Britain faced was like the one facing the United States now. Both were preeminent world powers whose economic competitiveness and general international position seemed less assured at the century’s end than it had five decades earlier. In both, alarmed citizens called for changes to improve national competitiveness and “prepare” for the next century. The difficulty was, however, that the proposed reforms would threaten many vested interests. Britain’s spending priorities, its public educational system, the efficiency of its industry, its treatment of poverty, its levels of investment, even the pattern of career choice (more engineers, fewer lawyers and bankers), might all have had to be altered to match the new global competition.

While reformers in turn-of-the-century Britain urged the need for tough solutions, and cultural pessimists bemoaned the evidence of “decline” and “decay,” many disliked the idea of change. It would mean the loss of institutions and work habits that were familiar, cozy, and reassuring. It implied that national traditions had to be amended in imitation of foreign ones. It upset powerful vested interests, and made for uncertainty. It involved costs, or a redistribution of national resources, when economic growth was moderate. Besides, there were many other academic “experts,” journalists, and economists who said that things were still fine, that the declinists were alarmist, and that Britain still had the energies and resourcefulness to remain ahead. All this made sense to a people taught that it occupied a unique historical place, and was an example to others. In sum, there was an understandable and deep-rooted antipathy, both psychological and cultural, to the idea that great changes were needed, especially if they involved pain or money. Rejecting the calls for change, the British people thought it was better to “muddle through.”80 Why, then, cannot America today do the same?

The answer is that the long-term implication of muddling through is slow, steady, relative decline—in comparative living standards, educational levels, technical skills, social provisions, industrial leadership, and, ultimately, national power, just as in Britain. The British may have avoided hard choices by “muddling through” policies, but that evasion ultimately caused the loss of their place in the world.

This, then, is the great test facing President Clinton and his new team. While an impressive array of American companies, banks, investors, think tanks, entrepreneurs, educators, and others are aware of the global forces for change and individually scrambling to prepare for the twenty-first century, the United States as a whole is not; indeed, it probably cannot prepare itself without becoming a different kind of country, transforming its health care, public education, inner cities, job-training, social security, energy consumption, and fiscal system by measures that would make the New Deal look dilettante by comparison—and in the process offending large numbers of Americans who called for some of those reforms but would be hurt economically by others.

Can Mr. Clinton, already in danger of being preoccupied by immediate foreign policy issues (Somalia, Bosnia, Iraq), make a difference? Can any American government improve the country’s changes of meeting the enormous, transnational forces for change bearing down on us? One thing, at least, is clear. Whatever America’s prospects are, there can be no coherent response to those challenges unless the President himself recognizes them and has the political courage and ability to mobilize opinion to accept changes that many Americans will find uncomfortable. It will require, in other words, a leadership very different from that demonstrated by recent incumbents of the White House, whether it concerned domestic deficits or global population growth or education reform.

Perhaps America now has such a leader, one who can really institute significant if painful reforms. Or perhaps, instead, traditional “muddling through” methods will prevail despite Mr. Clinton’s pleas for “change”—leaving the American people to pay a high price in the future for having assumed that things can stay much the same at home while the world outside alters more swiftly than ever before. Truly, as the Chinese curse has it, do we live in interesting times.

—January 28, 1993
(This is the second of two articles.)

  1. 72

    See again Reich, The Work of Nations.

  2. 73

    Hudson Institute, Workforce 2000: Work and Workers For the 21st Century (US Government Printing Office, 1987), p. 98; see also, New Perspectives Quarterly (Fall 1990), p. 37.

  3. 74

    The quotation and statistic are from p. 23 of the Report of the Commission on the Skills of the American Work-force, America’s Choice: High Skills or Low Wages! (National Center on Education and the Economy, 1990); see also N. J. Perry, “How to Help America’s Schools,” Fortune, December 4, 1989, pp. 137–142. For the shortages at the higher levels, see R. Atkinson, “Supply and Demand for Scientists and Engineers: A National Crisis in the Making,” Science, April 27, 1990, pp. 425–432; and “Needed: Home-Grown Talent” (editorial), The New York Times, December 26, 1990, p. A30.

  4. 75

    America’s Choice: High Skills or Low Wages! has frequent comparisons with what occurs in the European and Japanese educational and worker-training programs. See also J. Jacobs, “Training the Workforce of the Future,” Technology Review (August/September 1990), pp. 66–72, pointing to the potential in community colleges.

  5. 76

    Technology, Public Policy, and the Changing Structure of American Agriculture (US Congress: Office of Technology Assessment, March 1986), pp. 3, 11. (The 1.8 percent annual increase referred to in this report concerns “world agricultural demand by the year 2000,” but that figure is clearly related to expected population growth.)

  6. 77

    Technology, Public Policy, and the Changing Structure of American Agriculture, p. 20.

  7. 78

    See the description of agricultural “refineries” in F. Rexen and L. Munck, Cereal Crops For Industrial Use in Europe (Amsterdam: Lars Munck, 1984).

  8. 79

    See again Ohmae, The Borderless World, passim, and Reich, The Work of Nations (although Reich also points to the many Americans who will be disadvantaged by globalization).

  9. 80

    See the account in C. Barnett, The Collapse of British Power (Morrow, 1972).

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