New middle-class jobs might not be an oxymoron after all.
Even today’s super-lean, robotized U.S. manufacturing base holds the promise of some good jobs. For one thing, the McKinsey report emphasizes, manufacturing and service-sector roles increasingly overlap. Big industrial firms hire lots of designers, software engineers, accountants, and other service professionals. Architecture firms and design companies need their own 3‑D printers (and people to maintain them) and advanced-materials workshops. Across the board, McKinsey concludes, we should expect to see more of the kind of jobs that could help offset the winner-take-all pressures that have distorted America’s income distribution. Such positions aren’t likely to require the graduate-school credentials of the professional world, but they will pay much more than standard retail or food-service work—I have seen $17–$20 starting hourly wages at new factories in Mississippi and South Carolina.
“The automotive industry, for example, will need workers skilled in ‘me-chem-tronics’—an understanding of mechanical, chemical, and electronic systems—to support development of hybrid and all-electric power trains,” the McKinsey report says. It adds that America could soon face a shortage of workers in three middle-class categories: technicians of all varieties, workers in skilled trades, and engineers. If we know anything about our economy, it is that such shortages solve themselves, as wages rise and draw more people to a field.
Today’s arguments over taxes and regulation will bore tomorrow’s job creators.
Political discussions about boosting American industry typically stall on predictable arguments about tax rates or regulation. Of course everyone wants lower taxes. But in my interviews with entrepreneurs and industrialists, these familiar, divisive issues barely came up.
When Liam Casey took me through his Highway1 incubator for hardware start-ups in San Francisco, I spoke with 10 (mainly) young entrepreneurs who each hoped to set up a small hardware company somewhere in the United States. Not one of them volunteered tax or regulatory concerns as playing big parts in his or her go/no-go decisions. What they did want was a streamlined system to get their products into customers’ hands. To that end, they were concerned with things like the structure of retail distribution, especially the huge investment in inventory required to get their products carried in big-box stores. “Boring-seeming practical details make a big difference for these start-ups,” James Manyika told me. “If I am a small manufacturer doing something interesting, my chances are much better if I happen to be in physical proximity to a larger company, or to a network of experienced people who can help me get to scale.”
The list of ingredients that GE’s David Joyce sees as favorable to advanced manufacturing begins with a different kind of proximity: he wants each factory to be near both a research university and, ideally, a community college that can prepare people for high-skill, high-wage work. In our travels around the country for our American Futures project, my wife and I have seen many examples of community colleges and even high schools working with industries to equip students for well-paid technical jobs.