My parents came to this country in 1978. Like so many first generation children of Indian immigrants, I learned to believe in a dream that is as much American as it is universal: a dream of equal opportunity for all based on merit, of power concentrated not in the hands of a few at the top, but fanning across a large, educated, and civically engaged middle class.
The reality, though, is that Americans have an increasingly difficult time rising from the bottom of the economic playing field. Part of the reason is because of the severe poverty that exists in the US–people have a harder time rising to the top because they start further behind. What’s worse is that people born into poverty tend to stay there.
At least five major studies in recent years have found the United States to be less mobile than comparable nations. A project led by Markus Jantti, an economist at a Swedish university, found that 42% of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25%) and Britain (30%)—a country famous for its class constraints. Meanwhile, just 8% of American men at the bottom rose to the top fifth. That compares with 12% of the British and 14% of the Danes.
The income compression in rival countries may also make them seem more mobile. Reihan Salam, a writer for The Daily and National Review Online, has calculated that a Danish family can move from the 10th percentile to the 90th percentile with $45,000 of additional earnings, while an American family would need an additional $93,000.
The bottom line is incomes have stagnated for working class Americans, driven in part by technological advances. The GDP and productivity rates, traditional measurements of economic growth, have slowed greatly over the last decade. While many believe these fail to take into account significant technological advances such as the iPhone, Uber, and other digital creations, it’s clear that the economy is not working for all Americans.
In a recent interview in Harvard Business Review, authors Erik Brynjolfsson and Andrew McAfee explain that while digital technologies will help economies grow faster, not everyone will benefit equally. Brynjolfsson says, “Digitization is creating new types of economic disruption. In part, this reflects the fact that as computers get more powerful, companies have less need for some kinds of workers. Even as it races ahead, technological progress may leave some people—perhaps even a lot—behind.” It’s not worth disputing this fact. But it is important to discuss how we respond. The opportunity is there for us to leverage the forces of change.
Today’s digital shift occurs in concert with a massive movement of jobs from traditional employers to freelance marketplaces. These marketplaces, long stuck under the radar, are now exploding and growing 20% faster than offline work. They’re as varied as Uber and Lyft for transportation, Care.com for babysitters, home-health workers, and dog walkers, Postmates and Caviar for food delivery, and TaskRabbit for nearly any errand. And they are creating a new career path for a lot of people. According to newly released statistics from the Government Accountability Office, over 40% of all U.S. workers are contingent, which includes temp workers, contractors, on-call workers, part-time employees, and the self-employed.
According to McKinsey, by 2025, online work will add $2.7 trillion to the global GDP and enable 540 million people to access work. Yet our job training infrastructure, especially our publicly funded colleges and vocational schools—the basis for the kind of meritocracy my parents sought when they moved here—lags dramatically behind that of other countries.
Many federal and state-funded job training programs lack awareness of the explosive growth of the contingent and increasingly web-mediated economy. Community colleges, a system of schools designed to put people to work, have a 70% dropout rate nationwide. And even when people do manage to finish, they emerge with training that doesn’t equip them to succeed in the new economy—skills like marketing one’s talents in an online profile, submitting applications for project-based work, and developing new skills using on-line resources. Many of the non-profits providing free educational resources, including websites like Code.org and Khan Academy, mainly attract wealthier people who grew up using the internet and learning to be autodidacts.
But there are some promising efforts out there to alter this reality. The state of Colorado and the city of Phoenix have recently partnered with the Markle Foundation, which has convened a diverse group of CEOs, educators, thought leaders, and community advocates to expand opportunity for all Americans. Working directly with local communities, Rework America is currently focused on creating a skills-based labor market to better inform job seekers about the skills needed for meaningful work and to better connect them to those jobs, as well as help create a pipeline of more qualified workers to fill middle-skill jobs.
Some skills might seem obvious to those of us who grew up with computers in the home. If you’re reading this on a smartphone, tablet, or computer, you likely have a hard time understanding why the flood of websites offering part-time work at higher than minimum wage have a hard time finding applicants. The answer: our publicly-funded job training infrastructure doesn’t teach people how to navigate these systems. I’m not talking about coding, which has become a national obsession. I’m talking about the more basic skills required to find and, in some cases, perform part-time, project-based work through the internet. Skills like data entry, internet research, and an understanding of technologies like Gmail and Google Docs to secure one of the many jobs posted for virtual administrative or customer support in rising categories like Real Estate, Law, HR and Accounting.
Labor looks different in the 21st century. And so should our job training programs. In 2011, the US alone spent $18 billion on 47 programs that resulted in poor tracking and overlapping missions. Two major shifts would help us prepare more people for today’s workforce. First, all organizations receiving federal or state funds for job training should be required to have an online jobs component to their training programs, regardless of the type of job we’re training people to perform. Using the internet to secure employment is as vital to a construction worker as it is to a software engineer.
Second, we need to do more to ensure that people are not left out of the benefits afforded by technological progress. At Sama we do this through offering a free 10-week program to people in underserved communities, teaching basic digital literacy and in-demand skills like social media marketing and personal finance to help get people up and running on sites like Upwork and TaskRabbit. From those that have graduated and go on to complete freelance contracts, we’ve seen a 27% increase in hourly wages, which tells us this model is a successful model for change. We also just launched online with the intent to reach even more people, both domestically and abroad.
We’re not the only ones making progress. YearUp and Per Scholas are other great examples of organizations that are challenging traditional job training and thinking about how we can prepare more people for work in the digital economy. We’re doing our part by growing the talent pool and motivating more people to return to the workforce. Now it’s up to you to hire them.
This Labor Day, think about how we can give more people the opportunity to participate in today’s changing world of work. Encourage your local politicians to support online work initiatives and look closely at the education and labor policies your presidential candidate of choice represents. If you’re in the position to do so, consider hiring someone from one of the many online work platforms or through one of the job training programs I mentioned.
I still believe in the dream I was taught when I was young, in equal opportunity for all and an inclusive view of the future of work. It’s not that we need a new American Dream but a different approach in achieving it.
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