Ed Gordon and Ron talk about the challenges we face with education and the workforce.

I'm wonderful. I'm so happy you could join us.

Well, thank you for the invitation.

And share with us your thinking. The series you've been running this year, I think you're calling Job Shock.

Right. That's right.

What was your goal with that whole process?

Well, the goal is to alert more people across the U.S. and around the world to the fact that we now have the situation where we have too many people who are looking for jobs and can't find a good job. And we have too many companies looking for qualified, skilled people, and they can't find enough qualified, skilled. people and that this is a problem that has been growing for quite some time.

What do you think the cause is, Ed?

The primary cause? Well, I think the cause is that culturally, business believes that they really don't need to train workers anymore. That there's a big enough pool of skilled labor that as they introduce more and more technology robots, that they can reduce the size of the number of their employees and they can skim the cream of skilled and educated people off the top of society and that as a result, productivity will increase, their big payroll costs will go down and they don't need to train. They think that training is an expense and it should be eliminated. That's part of it. The other part is that most people in America think that the kids are doing all right, that they're doing fine in school, and that most students come out of high school or community college or college and they have the skills for life that they're going to need. The purpose of this is to show people that the kids and the workforce in America isn't doing all right.

And that we now have a very undereducated workforce for the fourth industrial revolution that is now rolling around the world.

It's rather shocking, isn't it? That it's a confluence. A lot of people, when they leave school, breathe a sigh of relief and say, well, boy, I'm glad that's done.

Yes, you're right. You're right. And, you know, in 2020, most of the states reported more job vacancies than there were people applying for jobs. Now, this is before COVID occurred. And since that time, in fact, just last month, the National Foundation of Independent Businesses reported that 56% of small businesses, these are 500 or fewer employees, were looking to hire. And 91% could not find qualified applicants. This is the highest percentage ever in the history of their poll that they do every month. It's 20% higher.

It's shocking, isn't it?

Yeah, so we really have reached a very, very big turning point because jobs now require a higher level of general education and then specific skill training for individual jobs across all disciplines, across all business sectors. So this is not limited. to just the tech companies or the aerospace companies or the medical profession. We're now talking about everybody. And of course, the number of low-skilled jobs is continuing to shrink in relation to how many, the new jobs that we are creating, and many of them are being eliminated at the same time.

What's interesting is, along with all of this, artificial intelligence, autonomous vehicles, robotics, telematics, and the economics of technology, there's almost no low-skilled job that cannot be done by technology today.

Almost. Not quite, but almost. And it will continue to shrink.

One of the things I've been saying for years, Ed, is that we've been spending trillions and trillions and trillions of dollars on technology and hardly anything on sociology. So as a society, how we absorb, how we deal with the fact that there will not be gainful employment for maybe 50 million people in America.

Well, we're going to go into that. I will give you some projections to what we expect will be the situation by 2030.

Before we go to the projection, could you talk a little bit about the book that got you and I together of yours, Future Jobs? Right. How long ago did you write that now?

Well, Future Jobs came out in 2013, and then we updated it with a new edition in 2018. So Job Shock, which is being brought out by our Gordon Report, which is an economic report we bring out. quarterly, now we're doing it monthly with this new white paper, updates that information. And basically, the big news is that as of now, besides the official unemployed, we really have, and the official number of vacant jobs, we have about 10.6 million vacant jobs across the U.S. economy right now. Yep. All right. And that number is going, to go up substantially. States are already seeing their population shrink because businesses are leaving. Illinois lost a lot of population in the 2020 census. The chief demographer said the chief, one of the biggest reasons, it's not just taxes. It's the fact that Illinois does not have an adequate educated workforce, which is unbelievable. In fact, projections show that over this decade, Illinois will lose 9.

3 million jobs. And the economic impact by 20 over that decade will be a loss of $1.2 trillion to the Illinois economy.

You can't replace that. It becomes rather shocking, doesn't it?

Well, it's the breakdown of the education to employment system. Elementary and secondary, with parents encouraging their kids to do better in school. Some form of post-secondary, a certificate, two-year degree, apprenticeship, or four-year degree. And then... continuing lifelong learning in the workplace. So companies invest in their human capital, but they fail to invest. I'm sorry, they invest in their physical capital, but they fail to invest in their human capital. They think, again, it's unnecessary. It's an expense. Yeah.

And the other thing that's happening demographically is that there's because of COVID, I think there's a lot more people that are in our generation. that are saying, well, wait a second, what's this? If they can't afford, they stop. The trap is that there's not enough people that have looked after themselves. Go back a little bit. How long ago was it that you taught at University of Chicago?

No, Northwestern.

I'm sorry, Northwestern. Oh boy, that's blasphemy.

Right. I went to U of C for postgraduate work. I taught at DePaul, Loyola, and finally Northwestern. I ended that in 2003. because I was traveling a great deal doing regional and national conferences on workforce because this problem is not, this is not new. I first wrote a book about the shortages of skilled workers in 1991. It was called Closing the Literacy Gap in American Business. I want you to think about that. Then I wrote Skill Wars in 2000. And then The 2010 meltdown as the boomers started to retire. And of course, over this decade, we're going to see now the rest of the 70 million plus boomers retire and their skills will leave the workforce. And then future jobs, talking about what I discovered, that there are regional talent innovation networks that have started public-private partnerships.

an intermediary formed in a region to bring together the business people, the workforce boards, the economic development people, the school systems, elementary, secondary, higher ed, the unions, the nonprofits to re-energize, rebuild and reinvent a new education to employment system. So you have... So you have a larger number of kids coming out of high school who now will read at the 12th grade level of comprehension and have math skills at that level. That's a big range from today. We have a third. We need two thirds right now. By 2030,80% of the jobs will require that as a good educational foundation. And that's true across the entire country. All right. Plus, those jobs are going to require a post-secondary component. Now, most of them do not require a four-year college degree, but they require certificates, two-year degrees, apprenticeships. All right.

And we're just sort of used to the idea from the 20th century that we only needed about a third of the workforce. to have that kind of background and the rest could muddle along. So right now we have the knowledge workers, about a third. We have the walking dead who are people that graduated from high school. They have some additional college or apprenticeship or something that maybe not, they haven't completed it. And then the bottom third may be dropped out to school. graduated at a very, very low level of reading and math, and they're the walking dead. They're the techno peasants. All right. Yeah. That's where we're at right now.

The other thing, if I remember right, and I don't know this, you might know the accurate statistic. I think something like 50% of the vocational schools in America shut in the last 15 years for lack of interest.

Yes. That's true.

It's shocking. And to some degree, Let me attribute a little bit of guilt here. I think that the American family has pretty well been convinced in the last 20,30,40,50 years that you have to have a four-year degree if you want to succeed in life in America.

Correct. That's what's been sold.

And I believe that's a shameful thing to have said.

Well, look, if we prepared. enough students to go into post-secondary, not just college, but these other areas, we'd be fine. But right now, on average,40% of entry-level college freshmen are in remedial reading, remedial math, remedial writing. All right? 40%. And in many cases, at community colleges and other institutions, it's far higher. Now, the purpose of higher ed is not remediation, is it? No, it isn't. Those skills should have been gotten in elementary and high school.

How do, when you're bringing in these groups of people, all of these different, I'm going to call them focus groups for a second.

Well, they're called RETAINS, Regional Talent Innovation Networks. These are groups that set up a nonprofit organization to do it.

How do we get the NEA, the National Education Association, the American Federation of Teachers, to acknowledge that, to some degree, they're failing at their mission?

Well, the solution to this problem, Ron, is going to be done regionally. Yeah. As it spreads across the country, then the national associations will finally join the bandwagon. You will simply not get the individuals. who are defending the status quo to admit that these shocking statistics exist. All right. I've seen this for decades now, as I've done consulting and work. People think everything is fine. We'll muddle through. And that's, you know, look, right now we're on track that by 2030. We'll have 20 to 30 million vacant jobs across the economy in the United States. And we will start losing by 2030 $2.5 trillion in the GDP per year in lower productivity and profit. The economy will begin to atrophy across the world. Now, this is a global problem. This is not a problem. You're going to see a 95. million vacant jobs and a global loss of at least $18 trillion. Now that's shocking. Yeah.

It is. The consequences are more than shocking. It means that the disparity in health and life expectancy and poverty and hunger are going to continue to get worse, not better.

And COVID has just now accentuated all of these things. That's absolutely true. In what way? Companies are buying more technology, automating more. We see more potential breakthroughs in basic fundamental energy sources, such as cold fusion. Cold fusion will happen before 2030. Solid state batteries rather than alkaline batteries will be a reality before 2030. These things will fundamentally change the way in which manufacturing and many other things are done in this country. But the problem is we don't have the skilled people to invent the products and services that will come out of that. The equipment, the industrial stuff, and then the consumer applications, etc. to build, maintain, repair, and manage that. And also, too, the workforce will hardly grow. The entry of new people in the U.S. will be offset by this. And then let's put it, look, right now children in the United States, most of them have lost at least one year of schooling.

Absolutely.

And since only a third come out of high school now reading at 12th grade level, what is that going to do to those statistics? Yeah. All right. Yeah. And now and we're talking when I say that to you, I'm talking about kids in suburban schools. I'm talking about kids in parochial schools or private schools. This includes all children. I'm not talking just about kids in the inner city or urban areas or rural areas of the South or West or whatever. All right. Don't kid yourself. Now, that is not to say there are not bright kids coming out of school and going post-secondary in many ways, going into apprenticeships and trade. There are career academy high schools. That's part of the solution. Getting kids into many more disciplines and many more jobs that most people don't even know about. All right. Yeah. But that's still not. That's the exception to the rule. All right. So that's what this is. That's what this is all about. Right.

Yeah. Again, sociologically, if you're if you're smart and you're hardworking.

Yeah.

You're fine.

Right.

The disparities in society, economic disparities are going to accentuate. They're going to get worse.

Well, if you're hardworking, it's fine, but you have to have knowledge now. Correct. You have to have thinking skills, problem solving skills, ability to work with other individuals. Let's just take a look at before COVID hit in February of 2020. We had 165 million jobs in this economy. All right. Now, of those jobs, about 114 million were high-skilled jobs. All right. 70% of all the jobs. Okay. But we only had about 55 million Americans who could fill those jobs. That's a deficit of 60 million people. Now, you're going to say, well, Ed, Well, what happened? The economy didn't fall apart, did it? No. Well, how did we fill that, Ron? I'll tell you how we did. First of all, you had a number of people imported from around the globe who are high skilled in many of these areas. All right. So we brought them and they've been going to graduate school here or their technicians have been brought in from. from overseas. Secondly, we used automation.

We used automation to cover the mid-level, many of these mid-level jobs. So as a result, we filled most of these other high-skill jobs. But by the end of 2020, we had still 10.5 million vacant jobs. Now, I'm not talking about the people that were laid off because of COVID. When we shut everything down or not almost everything down. All right. That was a loss of $263 billion in product profit and product for the for the country. Now, on the other hand, we still had 50 million low skilled jobs. Yeah. Which is about 30 percent of all the of the of all the jobs. And we have 110 million low skilled workers. I want you to think about that. Yeah. Now, that means we had 60 million people, surplus, low-skilled people out there. Many of them, of course, gave up or they have terrible work histories, but not all of them. All right. Now, let's fast forward to what we're going to look like in 2030. Well, in 2030, we'll have 170 million jobs.

Now, if we don't do anything to change the education and employment system, you're still going to have 128 million high-skilled jobs, high to middle-skilled jobs, which will be 75% of all the jobs. We'll still have, I hate to tell you, but we'll only have 56 million high-skilled, medium-skilled people, and we'll have a huge deficit of 72 million jobs. That's terrible. How are we going to fill that? And why, you know, the issue is that 70 million boomers will have retired. About a third of them will be high skilled people. You'll try to use automation to fill some of the jobs, but you're still going to have a huge number of vacant jobs in the economy. All right. Now, also businesses until now have built plants in foreign countries in Germany, South Korea. Japan, and they've exported those jobs to other countries. But these are high-skill, high-wage jobs. I'm not talking about making socks in China.

So if we do nothing, we could have 30 million vacant jobs by 2030 and a loss to the economy of $2.5 trillion. Now, I want you to think about that for a moment, what that will do to the economy.

Well, that's 15 to 20% of our GDP.

Yeah, I know. That's right. Now, on the other end, you'll still have 32 million low-skilled jobs, but you'll have 114 million low-skilled American workers. So you'll have over 80 million people with their low skill looking for work. Now, I don't have to paint a picture for people to understand if you have 80 million people who have given up looking. You're going to have severe social unrest in this country. Yep.

Not just this country, all around the world. Every country.

Well, all around the world. Now, lately, we have seen what propaganda can do to twist our society and the world. What I'm saying to you is this problem we're talking about is a cultural systemic problem that's been growing for a long time. Yeah. I remember when the Reagan administration brought out a report in the 80s about the insufficient number of educated Americans and what that would build in the future. Well, most educators said that that was un-American, anti-American, etc. Since then, you've had numerous organizations. And when you read Job Shock, you will see the references that we've used and the bibliography that when we publish Job Shock and Sentai later this year, we have national groups, government agencies, liberal think tanks, conservative think tanks, socialist think tanks, libertarian think tanks, all saying the same thing.

that we've run out of the education critical mass of the United States to run this high-tech society is running now out of steam. So it's not a question that the world's going to end in a bang. It's going to run in a slow grinding halt as things just don't work anymore. And of course, there's a trend that people have to think, well, we can dumb things down. Well, what will that do if we end testing for college admissions? What will that do? There have been some individuals, I've been told, that now want medical schools with doctors to operate without giving out any grades. Yeah. How does that make you feel when you had to have your appendix out or your heart? artificial heart put in. We're talking about a decline in quality and a decline in the educational ability of the United States to remain a world-beater economy and an inventor of all these technologies.

The other thing that leads to or tends is the leadership of the country. in all aspects of society, they're not equipped to be making these decisions themselves. They're undereducated for the task at hand.

Well, this is not a Democrat or Republican problem or a liberal or a conservative problem. But what I am saying to you is the founding fathers made it very clear that for a republic like ours to survive, You have to have a well-educated electorate.

Yes, sir.

And I always believed as a historian and as a business person that each generation of Americans were going to be better educated than the last generation of Americans. And I can tell you right now that since 1970, if you look at all the test data, in terms of achievement tests of students in elementary and secondary. You look at the ACT, SAT tests. You look at even tests done by the armed forces. We have flatlined on the number of what I call well-educated Americans. Is it too much to ask that most children after 12 years should have reading comprehension? at around the 12th grade level. If they have average intelligence, I don't understand what the problem is. Unless we really believe that education isn't really that important. And now it is.

Well, it's always been, but we seem to have convinced ourselves it's not as important as it used to be. We've reached the top of the mountain. And, you know, your comment about ACT and SAT and grade scores from different schools,1963, which is the year I graduated from high school, if I recall right, that was the peak of the SAT scores. They've adjusted the SAT two or three times since to keep the scores at the level. But how did we, it's not like we had dumb people in the past. How come we've been so much asleep at the switch?

The economy worked very well until the 70s with that arrangement, where 30% would be well-educated. They would be the professors. They would be the technicians, the tradespeople. They had specialized knowledge. The next third would come out of high school, and they'd get some additional training, but not much. And the bottom third would do... the low-skill jobs. All right? And that was sufficient for us. All right? Then we began to import knowledge workers from other countries into the U.S. We did that after World War II. We allowed many displaced persons from Europe, fleeing Europe, to come into the United States if they had a technical background. We did not allow, we were not letting in college people, people with college degrees, medical degrees. Many of them came in through Canada eventually, actually. And then we got the idea of the U.S.

building its plants in Europe and in Asia and employing skilled people in those countries, not for low-skilled jobs and low wages. Motorola. who invented the modern cell phone, had its most expensive operational plant in Germany, using the most high tech and had the highest skilled workers. And they made a tremendous profit. Now, Ireland is a good example of a country that in 1980 finally mandated that everyone had to go to high school. But then they built a huge technical college system. lowered their taxes, and then had an influx of many large tech companies from the United States and Japan to build and make products. And those products were then sold into the European Union from Ireland. And Ireland's economy boomed tremendously. Now, I'm not saying they got rid of all their problems. They also had a huge housing bubble, et cetera. But they even recovered from that pretty well.

Scotland is the same, an even smaller economy, only about 6 million people between Glasgow and Edinburgh. They have a huge industrial establishment, and they too have technical colleges and universities, so that they've worked very well. And this has nothing to do with North Sea oil. That's another factor that's helped Scotland. But in these cases, what I'm telling you is education, is the key for business success. Look at how many of you have ever watched the television show MASH. And you see that in the 1950s, South Korea was nothing. An agricultural economy bombed out of existence. Think of South Korea today. South Korea has one of the best educated workforces in the world. In fact, in some ways, it's too... They have crammed schools. It's too well-educated. But my point is, they had no resources at all. And yet, by emphasizing education, they now export. Think of all the products that the U.S.

buys from South Korea, that we buy from South Korea. Cars, televisions, et cetera, et cetera. And Japan, the same way. After World War II, Japan was flat on its back. Now, the United States, of course, has tremendous natural resources. We can feed ourselves. But now, of course, most of those farms are huge agribusinesses. You go to North Dakota, there's a farmer sitting in his home, and the reapers are out there, maybe 10 across, reaping the wheat, all computer controlled. The problem there is who repairs? the computers when they break down and who programs those computers. That's exactly right. So North Korea, I'm sorry, North Dakota started in the 90s to diversify its economy away from agriculture and into technologies. So Microsoft now has a 2,000 person operation in Fargo, North Dakota. Yeah. All right. And they have aerospace in North Dakota.

They have a huge pharmaceutical industry for at least that region, that northern tier of the United States. They did a great deal by, you know, they were investing in education and training their workforce.

North Dakota Science and Technology Technical School in Fargo. Yes. Is an example of that where society, the business community, the education community all got together and said, hey, wait a second. And, you know, it's interesting to me, you know, what triggered that? The kids are not staying on the farm. They were leaving North Dakota.

That's right. In the 1990s, the education, the population was declining. Small businesses were closing and the tax base was going downhill. Right. Those are the communities that I have worked with across the United States that have set up RETAINs, Regional Talent Innovation Networks. They're called many brand names.

Talk a little bit about RETAIN and how you get that seed to germinate and grow in an area. How do you make that happen, Ed?

I don't make it happen. The people do. Because they don't want to see their communities destroyed. They don't want to see their hometowns disappear. And they want to get together, burn their enemies list, and reinvent their economy. And they realize that on one end, you have to have a better educated workforce. And on the other end, maybe we can attract some other business sectors into our region that don't exist today. Or we can become a world beater in what we have that we just haven't properly developed. And it takes time to do this. So it's partly to retrain the older workforce to fill the vacant jobs they have so the current businesses don't die. And it's to better educate and... inform parents and students about the careers that exist in their communities. So take Santa Ana, California. This was happening to them in the 1990s. Orange County was booming. Santa Ana was dying.

And the reason why is the Hispanics were moving in and the Anglos were moving out. And the Hispanics did not have the education and training that the Angos had. Santa Ana is the second largest concentration of small manufacturing in the United States. So what they did is they ultimately set up High School Inc., which is career academy high schools that are fed by the elementary schools in six different... career areas that reflect the current economy in the Los Angeles region. All right. And those six are designed and supported by the local business community, which also helps on staffing the career academies, as well as teaching the content, the curriculums. collaborating with the educators who actually are doing the education mostly. But the idea is that these students are going to graduate from high school with a good solid general education plus a career component.

Now they may, you know, they have automotive, they have finance, they have electronic information technologies. They may or may not follow those careers later, but they all understand they're going to have to get a certificate, a degree, or go into an apprenticeship program if they want to really be successful in those jobs. All right? So that's just one. Connexus in Akron, Ohio. The Vermilion Advantage in Danville, Illinois. The New North,18 counties. in Wisconsin, north of Milwaukee. There are 1,000 of these retains with local brand names. And what they're basically doing is acting as an intermediary to bring people together to form a common vision and then rebuild this education to employment system, elementary, secondary, post-secondary, and lifelong learning in the workplace. So that... More parents have the idea that they have to support education actively every day.

And at the other end, businesses understand they need to make some form of contribution to lifelong learning for their workforce, as well as keeping that student population informed so that they have a next generation being prepared to come into their companies. All right. So for every dollar that Germany invests in worker training, the average American company invests 20 cents. Now, right now,30 to 40% of American businesses train. And a lot of that is for executives and professionals. Right. Or it's safety training. At one point in the 80s. you saw a renaissance in training. Companies were setting up training departments. You even had corporate universities set up in many businesses in order to train teams, train leadership, supervisory training, technical training, etc. Then around the mid-90s, E-learning came in and many companies said, this is great. We can buy the technology, the software, the hardware. We can shut down the classrooms.

You can learn at home. Well, it doesn't work very well, they found out. And then they just abandoned the idea and they can skim cream worldwide or try to poach from other people. Well, those days are over because now worldwide, we don't have enough. People ask me, Ron, what countries are? have tons of these skilled workers. Well, let's see. Finland, tiny little country. Singapore is doing very well in recruiting its workforce. South Korea and Japan, those populations are shrinking right now. All right. And they are desperately afraid that they will not be able to maintain their economies.

In fact, Trump is talking about importing workers for the first time in their history.

Well, good luck, because they are xenophobic. I agree. Germany has imported many workers, and now you see the tremendous backlash from the right politically in Germany. Russia's population is shrinking. China, with its one-child population, is shrinking. You know, China is a huge population of over a billion people. Several hundred million are well-educated. Rural education is a disaster. So India, the same. You know, so there is, you know, this is a worldwide, I wrote, I did write a book on this, by the way, in 2009 called Winning the Global Talent Showdown. where I talked about 25 countries and what they were doing right and what their problems were. All right. So my point is this. If we do nothing, if we just are, if we allow the Luddites, you know who Luddites were? Yeah. You know, the guys that were throwing wrenches.

You can't say that, you know.

They were throwing wrenches in the machines. In England, in the first industrial revolution, John Ludd. Well, now the new Luddites are the bureaucrats, people in the educational system, people in business, people on Wall Street, parents who say, oh, we'll muddle through. My kid's fine. My workers don't need any more education. If you read Future Jobs, which is readily available in paperback, hardcover, it's also a... a talking book, you can get, you know, you can get all that or go to imperialcorp. com, our website, imperialcorp. com. You can read Job Shock. Contact me. I'm on LinkedIn. Happy to converse with you. But there are ways to do this to get people to learn to work together. Right.

Right. I think you've put a glove on the floor for us all to be serious about it. It's a most serious problem that isn't going to go away. You're absolutely right. And I think you've got a lot of examples of successes that more of us need to pay attention to. If you don't mind, I'm going to start issuing your job shop. January, job shop, February, job shop, March to my audience. This podcast will go out to my audience as well. We've got about 6,500 followers. It's not a lot, but it's enough to maybe make a bit of a difference. So at this point, let me thank you for your time. You're welcome. And hopefully in another three, four months, whatever, when you're back in the desert again, maybe next fall. you and I can do this again and have a checkpoint and see where we're at, if that works for you.

So I ask your people that listen to this, go to imperialcorp. com, our website. Our email is imperialcorp at juno, J-U-N-O dot com. Feel free to contact us. I'd be happy to talk to you and give you more information.

Ed, I appreciate your time this afternoon very much. And to those of you out there listening to us, thanks for being with us. We'll talk to you the next time. Thank you for listening to our podcast. We appreciate your support. Should you have any thoughts or comments, please don't hesitate to contact us at www. learningwithoutscars. com. The time is now. Mahalo.