Structural Unemployment Is Coming, Says WorkingNation Founder

Speaking on Wharton’s SiriusXM radio show Knowledge@Wharton, University of Pennsylvania alum and board member, Chicago Booth MBA grad and founder of WorkingNation Arthur Bilger spoke on what may be the next great economic epidemic: structural unemployment.

In the flurry of the 2016 presidential election in the U.S., the idea of how much structural automation and globalization may alter the working economy has only been lightly treaded. Mostly due in part to its honest unpredictability. And the lack of discussion is becoming concerning.

“It has been quite amazing to [see how little of the crisis is perceived by] even by the most sophisticated people,” Bilger said on the show. “I have laid [the problem] out to major news executives, foundations, corporate executives—and people haven’t really understood the magnitude of this and how quickly things are changing.”

The principle conceit of Bilger’s point came up initially three years prior during a dinner event with famed Harvard economist Lawrence Summers. Bilger asked the question of how the U.S. economy can survive and thrive in the future if rising high school dropout rates and increasing life-spans coexist?

“Here’s the math: A third of the population drops out at 15 and we keep them alive to 85. What do you do?” he asked.

This was only the beginning of his eventual three-year-long inquiry, which eventually tied in concepts of globalization and rapidly advancing technology, leading to some potentially horrifying figures.

“A study out of Oxford show that we could lose 47 percent of all our jobs within 25 years.”

Taking the potential rise of structural unemployment must be first approached by recognizing the problem; something many institutions are not doing or are not meeting fast enough. But Bilger maintains some optimism that the challenges will be met.

“As we’ve watched [presidential candidates] Donald Trump and Bernie Sanders build their movements over the last year and a half, they made the point that we don’t have to look to tomorrow [for employment disruption],” he explains. “It’s here today. Donald Trump’s election, which I believe was very much facilitated by the pain and discomfort at local levels, [was] about economics and jobs.”

“I believe there will be tremendous action that will take place,” he continues. “[The Trump and Sanders movements that tapped into job insecurity fears have] made my job of creating awareness much easier. Now, the key is [collaboration among] corporations, nonprofits, academics and local government to better understand and accelerate a lot of the programs they’re already thinking about. There are federal policies that can influence it … Listen, the whole infrastructure job discussion that they’re talking about now is one of the stories that we were actually going to tell.”

One of the first signs that advancing technology will begin to cancel out jobs is already well underway with automated driving. Bilger notes that delivery driving is the biggest source of employment in many states across the U.S. and companies like Uber and Tesla are already proactively making automated driving a reality. Education and re-education is a primary model that can combat these changes, but doing so means much of it also has to structurally change. That means training potential students for future-minded careers earlier and re-educating those who no longer fit within the modern economy. The latter, Bilger notes, is often more difficult.

“What would our society be like with 25 percent, 30 percent or 35 percent unemployment?” he asks. “I don’t know how you afford that, but even if you could afford it, there’s still the question of, what do people do with themselves? Having a purpose in life is, I think, an important piece of the stability of a society.”

You can read the entire transcript and listen to Bilger’s interview on Knowledge@Wharton here.

regions: Philadelphia

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