Tips on jobs from Zappos for US
By Richard Florida
Published: May 3 2011 23:28 | Last updated: May 3 2011 23:28
America’s job market is barely treading water. The rate of unemployment might have dropped below 9 per cent, but jobless claims have risen in recent months. This Friday’s non-farm payroll figures are expected to show slower growth than in previous months, while the average time a worker stays unemployed is now 39 weeks – the longest on record.
Some commentators – such as Christina Romer, who formerly chaired President Barack Obama’s council of economic advisers, and economist Paul Krugman – maintain that the problem is one of demand. They note unemployment is high across many occupations, and argue for increased investment and aid to local and state governments. Others reply that the problem will fix itself as growth picks up. But a closer look suggests neither analysis is right. Yes, we face a cyclical recession, but there is a structural shift too, which has left many workers high and dry.
This process isn’t new, of course. As the US economy has evolved, its job make-up has shifted too. By the middle of the 19th century some 60 per cent of the US workforce had been absorbed into industrial jobs, but those were often low-wage, long-day, dirty and dangerous. It wasn’t until a mixture of the New Deal, labour unions and postwar prosperity that these blue-collar jobs were transformed from bad to good.
America and other advanced nations are now in the early throes of a new jobs transformation, which requires an equally imaginative response. It creates two new distinct categories of jobs. The first includes millions of the best jobs America has ever seen: high-pay, high-skill jobs in professional and creative fields. The second, including such routine service work as care assistants and home health aids, retail sales clerks and food preparers, is less good. Pay for such jobs is roughly half that of manufacturing jobs. The result is as simple as it is tragic: a bifurcation of the job market and an increasingly unequal and polarised society.
Once we see this it becomes clear that neither a counter-cyclical approach to job creation, nor ideas of educating more people for higher-paying jobs, will work. The numbers don’t add up: some 45 per cent of the workforce are already toiling in low-wage service jobs that will remain so even when growth returns. These are also the fastest-growing jobs: the US will add a projected 7m more in the coming decade.
A successful jobs strategy must, therefore, focus on upgrading this entire job category. Thankfully much service work is not vulnerable to offshoring or automation: we need humans to care for our children and ageing parents, to cut our hair and steam our lattes. But we also need to see service work as a potential source of future profit and innovation. Some private sector organisations, such as the online retailer Zappos, show how this might be done, with their focus on helping service workers move through an internal career ladder from entry ranks to managers of divisions. These companies view workers as a potential source of innovation, and build a culture and community that delivers better services to customers. Others need to learn from them.
Instead of just focusing on training to push some into higher paid work, Mr Obama should make upgrading service jobs the next step in repairing America’s broken job machine. A national initiative, bringing together “service innovators” – such as Zappos, Starbucks or outdoor clothing retailer REI – would be a good start. Most services companies are small, however, so help is also needed to partner such organisations with universities, community colleges and industry groups. The administration should also consider using tax incentives to nudge such companies to upgrade service jobs.
Some of this may mean all of us paying a little more to those who cut our hair and sell us our clothes. But this is exactly what we did a half century ago to spur recovery by paying more to the workers who make our cars and appliances and build our homes. But these costs are modest, and unlikely to derail any recovery. The payoffs, both in terms of productivity gains and an upgraded American jobs machine in which all workers are given a fair chance, would surely be worth it.
The writer is author of ‘The Great Reset’, director of the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management and senior editor with the Atlantic
Copyright The Financial Times Limited 2011.