Part 8 of 10: Why more education and training won’t fix technological unemployment

This is the eighth in a series of ten posts on the threat to jobs and growth from technology and online distribution, and what we might do about it. 

  • The first part summarises the argument
  • The second introduces the challenge.
  • The third looks at the threat to jobs from automation.
  • The fourth looks at the threat to jobs from online competition.
  • The fifth looks at what economic problems this might cause.
  • The sixth looks at the social and moral problems it might cause.
  • The seventh looks at some of the arguments against a policy response: are we really sure this is a problem? Doesnt technology always create as many jobs as it destroys? Surely there is nothing we can do?
  • The eighth explains why more education and training isn’t the solution to technological un and underemployment.
  • The ninth explains why more self-employment and entrepreneurship isn’t an adequate solution either.
  • The tenth looks at other solutions, and proposes a new one.

If technology really does reduce jobs and work, isnt the solution just better education and training, skilling up?

This seems to be the conventional wisdom.

This solution comes in a number of forms: more money for schools, colleges, and universities, more and better apprenticeships and training, on or off the job. Perhaps an expanded scheme of career development loans and lifelong learning schemes.

When the Civil Service considers more automation and unemployment, this is what it recommends, for example here (p.21).

More and better education is a good thing in itself. But it wont fix the problem.

A good education, training scheme or apprenticeship will only mean a good job if there are enough good jobs out there.

If the problem is not enough middle jobs, the solution is more middle jobs. If the problem is not enough jobs, the solution is more jobs.

Larry Summers put it well:

If we allow the idea to take hold that all we need to do is: there are all these jobs with skills and if we can just train people a bit, then theyll be able to get into them and the whole problem will go away. I think that is fundamentally an evasion of a profound social challenge. The core problem is that there arent enough jobs.

That challenges a very ingrained mindset.

Parents are accustomed to waving their children off to schools or universities safe in the belief that their education means they can expect a good job. And yes, it will always help. But the bigger the hole where the middle jobs should be, the harder it will be for education alone to fix the problem.

And in one sense, more education and training is not helpful because it adds to the demand for middle jobs, and so bids down their salaries. Italy, Spain, the US, and the UK have all experienced rising skill unemployment because they have ever more skilled graduates chasing a dwindling number of skilled jobs. Germany hasn’t. As economist Dalia Marin put it: ‘in Germany, skill unemployment is low and did not increase between 2000 and 2012 precisely because education was advancing slowly there’.

This boils down to an uncomfortable trade off. In a country with a permanently lower proportion of middle skill jobs, should we prefer commensurately fewer skilled people to do them? Or an equal or greater proportion of skilled people, even if it means more people get stuck in jobs they’re overqualified for?

Anyway, if education and skills arent the answer, what about entrepreneurship? Surely if there are fewer jobs, more people are just going to have to create their own?

The next post looks at this argument.