Nice Work If You Can Get It

It's hard to listen to a politician or pundit these days without hearingthat America is "losing jobs" to poorer nations -- manufacturing jobsto China, back-office work to India, just about every job to Latin America.This lament distracts our attention from the larger challenge of preparing moreAmericans for better jobs.

Most job losses over the last three years haven't been due to Americanjobs "moving" anywhere. They've resulted from an unusually long jobsrecession which, hopefully, is coming to an end. We can debate whether the Bushadministration has done enough, or the right things, to accelerate a jobsrecovery. But job growth eventually will resume, as aggregate demand bouncesback.

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It's true that U.S. manufacturing employment has been dropping for manyyears, but that's not primarily due to foreigners taking these jobs. Factoryjobs are vanishing all over the world. Economists at Alliance CapitalManagement took a look at employment trends in 20 large economies and foundthat between 1995 and 2002, 22 million factory jobs had disappeared. The U.S.wasn't even the biggest loser. We lost about 11% of our manufacturing jobs inthat period, but the Japanese lost 16% of theirs. Even developing nations lostfactory jobs: Brazil suffered a 20% decline, China a 15% drop. What happened tofactory jobs? In two words, higher productivity. I recently toured a U.S.factory containing two employees and 400 computerized robots. The two livepeople sat in front of computer screens and instructed the robots. In a fewyears this factory won't have a single employee on site, except for anoccasional visiting technician who repairs and upgrades the robots, like thegas man changing your meter.

Manufacturing is following the same trend as agriculture. As productivityrises, employment falls because fewer people are needed. In 1910, a third ofadult Americans worked on farms. Now, fewer than 3% do. Since 1995, even asmanufacturing employment has dropped around the world, global industrial outputhas risen more than 30%. In China, modern factories are replacing inefficientstate-sector plants. China produces more goods than ever before, but millionsof Chinese factory workers have lost their jobs.

We should stop pining after the days when millions of Americans stoodalong assembly lines and continuously bolted, fit, soldered or clamped whatwent by. Those days are over. and stop blaming poor nations whose workers getvery low wages. Of course their wages are low; these nations are poor. They canbecome more prosperous only by exporting to rich nations. When America blockstheir exports by erecting tariffs and subsidizing our domestic industries, weprevent them from doing better. Helping poorer nations become more prosperousis not only in the interest of humanity but also politically wise because itlessens global instability.

Want to blame something? Blame new knowledge. Knowledge created theelectronic gadgets and software that can now do almost any routine task. Thisgoes well beyond the factory floor. America also used to have lots of elevatoroperators, telephone operators, bank tellers and service-station attendants.Most have been replaced by technology. Supermarket check-out clerks are beingreplaced by automatic scanners. The Internet has taken over the routine tasksof travel agents, real-estate brokers, stock brokers and accountants. Withdigitization, high-speed data networks and improved global bandwidth, a lot ofback-office work can now be done more cheaply abroad. Last year, companiesheadquartered in the U.S. paid workers in India, China and the Philippinesalmost $10 billion to handle customer service and paperwork.

Any job that's even slightly routine is disappearing from the U.S. Butthis doesn't mean we are left with fewer jobs. It means only that we have fewerroutine jobs. When the U.S. economy gets back on track, many routine jobs won'tbe returning -- but new jobs will take their place. A quarter of all Americansnow work in jobs that weren't listed in the Census Bureau's occupation codes in1967. Technophobes, neo-Luddites, and antiglobalists be warned: You're on thewrong side of history. You see only the loss of old jobs. You're overlookingall the new ones.

The problem isn't the number of jobs in America; it's the quality of jobs.Look closely at the economy today and you find two growing categories of work-- but only the first is commanding better pay and benefits. This categoryinvolves identifying and solving new problems. Here, workers do R&D, designand engineering. Or they're responsible for high-level sales, marketing andadvertising. They're composers, writers and producers. They're lawyers,bankers, financiers, journalists, doctors and management consultants. I callthis "symbolic analytic" work because most of it has to do withanalyzing, manipulating and communicating through numbers, shapes, words,ideas. This kind of work usually requires a college degree.

Over the long term, symbolic analysts will do just fine, as long as theystay away from job functions that are becoming routinized. They will continueto benefit from economic change. Computer technology gives them more tools forthinking, creating and communicating. The global market gives them morepotential customers for their insights. To be sure, symbolic analysts arepopping up all over the world. More than half of all Fortune 500 companies saythey're outsourcing some software development or expanding their owndevelopment centers outside the U.S. But apart from recessions, demand forsymbolic analysts in the U.S. will continue to grow faster than the supply.

No other country does a better job preparing its citizens for symbolicanalysis. Our universities are the envy of the world. and no other nationsurpasses us in providing on-the-job experience within entire regionsspecializing in one or another kind of symbolic analytic work (New York forfinance, LA for music and film, Silicon Valley and greater Boston for scienceand bio-med engineering, and so on). Besides, there's no necessary limit to thenumber of symbolic analytic jobs because there's no finite limit to theingenuity of the mind or to human needs.

The second growing category of work in America involves personal services.Computers and robots can't do these jobs because they require care orattentiveness. Workers in other nations can't do them because they must be donein person. Some personal-service workers need education beyond high school --nurses, physical therapists and medical technicians, for example. But mostdon't, such as restaurant workers, cabbies, retail workers, security guards andhospital attendants. In contrast to that of symbolic analysts, the pay of mostpersonal-service workers in the U.S. is stagnant or declining. That's becausethe supply of personal-service workers is growing quickly, as more and morepeople who'd otherwise have factory or routine service jobs join their ranks.Legal and undocumented immigrants are also pouring into this sector.

But America's long-term problem isn't too few jobs. It's the wideningincome gap between personal-service workers and symbolic analysts. Thelong-term solution is to help spur upward mobility by getting more Americans agood education, including access to college. Unfortunately, just the oppositeis occurring. There will be plenty of good jobs to go around. But too few ofour citizens are being prepared for them. Rather than fret about "losingjobs" to others, we ought to be fretting about the growing number of ouryoung people who are losing their footing in the emerging economy.

Mr. Reich, former secretary of labor, is professor of social and economicpolicy at Brandeis and the author of "Reason: Why Liberals Will Win theBattle for America," out in May from Knopf.