Tim Wood Powell     The value of knowledge

The headline in today’s Wall Street Journal caught my attention:  “Bringing Jobs Back to the U.S. Is Bruising Task.” The article describes the Reshoring Initiative, a nonprofit group that helps companies return production to the US. 80% of these companies are relatively small, with revenues of $200 million or less.

The article describes that a key barrier to bring work back is the declining quality of the labor force in the US.  One of the issues is the lack of a good work ethic.  One company reports that when the announced that a drug test would be held for plant workers the following day, 20% of the work force didn’t show up for work.

2 + 2 = 5

But an even more fundamental problem — as has been widely reported before — is that American workers often don’t have the skills needed to run even basic manufacturing machinery.  The owner of a scented candle company that originally sourced in China and Vietnam reports that even elementary school math skills are absent in many of her US employees — including both line workers and supervisors.

As I understand it, making candles ain’t brain surgery.  If US workers can’t run candle making machines, how would they do in a factory making advanced electronics, or even cars?

This brings to mind the various surveys that continually report the low and falling test scores of US students relative to those in Asia, Europe, and elsewhere. (See, for example, data below from the 2012 Programs for International Student Assessment that originally appeared in the Washington Post.) This is not just some abstract global game of Jeopardy — it ultimately matters to how people put food on their table.

And to the future of the US economy as a whole.  While we in the US pride ourselves on our consumer-led economy, it’s clear that people can’t continue to consume stuff indefinitely if they don’t have adequate jobs.  The consumer-led economy only works when the people who buy stuff do so with money made by working in factories that make stuff.

Symmetry of supply and demand

A supply-demand push-pull economic engine is a beautiful, symmetric thing.  But when one side breaks down, the whole wheel comes off the wagon.

In the early 20th century, the affordability of the Ford Model T to the workers who made it was a lynchpin of Henry Ford’s business model.  He raised their wages while at the same time cutting the costs of manufacturing by using an assembly line.

This core equilibrium of US capitalism seems now to have been lost by indiscriminate offshore outsourcing, at least temporarily.  And the damage may become more entrenched if the US can’t field a workforce that has grown competitively flabby and out-of-shape (often literally).

National security = economic security

In my view, this is a serious competitive weakness — one that threatens our national security much more than the crypto-warfare and middle-Asian sectarian violence that makes for sexier headlines.

This suggests a direct connection between the Knowledge of our population and the Value we seek as a society.  Let’s say our top value driver is national security (and, more specifically, domestic tranquility).  That is supported by a strong domestic economy.  A strong economy requires BOTH demand (consumption) AND supply (production, including jobs.)

Production requires workforce availability and readiness.  A large part of workforce readiness consists of the skills and training necessary to do the work.

Competitiveness begins (literally) at home

Some skills and training can be delivered on-the-job.  But basic math skills?  That’s the job of parents and the schools, both of who seem to be doing a terrible job of it.

“From knowledge comes prosperity” is both the motto of my firm, and a principle in which I strongly believe.  As a corollary, I believe “national security”, as we commonly define it, almost by definition requires an educated and productive workforce.

Regrettably, the converse of this axiom is equally true.  A workforce that hasn’t mastered at least basic levels of literacy and numeracy will not be able to compete successfully on the world’s economic stage.

It has taken us years to get to this point, and if present trends continue it will take us considerable time and effort to reverse this slide.  We can’t afford to let this happen.

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