The world of work continues to change in the United States as brains replace muscle. Nearly 200 years ago, half of all workers were engaged in agriculture jobs; yet today those workers are more productive with less than 5 percent of the jobs. As Texas went from reliance on cattle and cotton, manufacturing rose. But Texas reflects national trends today with no relative growth of jobs in manufacturing for decades.
Population goes where the jobs are, and that is the service category. This includes moving manufactured products arriving from low-wage nations such as China via ships at Gulf ports to rails and highways supplying the nation’s interior. College majors such as “supply chain management” reflect the globalization of manufacturing. The best example is the retailer Wal-Mart, with stores filled with products from across the world maintaining low store inventories through regional warehouses and tight control of supply chains into Asia.
The most significant manufacturing growth that affects Texas occurs, in fact, in Mexico. Now, 1 in 5 of every auto manufactured in North America is made in Mexico. With labor costs as low as $2.50 per hour, auto manufacturing from Canada and the United States will transplant to Mexico. In Texas, jobs will continue to develop to handle the ordering and movement of goods from Mexico into the United States. Service jobs will develop near the Mexican border, mainly in the Valley and a small bump in El Paso. Meanwhile, manufactured goods arriving at Gulf ports will decline as increases in the cost of oil nullify the lower labor cost advantages of Asia. The trend is clear: We will transport more and manufacture less.
There are three basic sectors of the economy: extractive (mining, lumbering, agriculture), manufacturing and service. Service is a broad category including sales, hospital work, insurance, teaching, law, accounting, transportation, public safety and government.
Service is the largest job category in Texas and in the nation. It accounts for more than 80 percent of jobs. In the coming decades, Texas jobs will continue to migrate to services, with no job growth in the other two sectors, extractive and manufacturing. Job content in these two sectors will change, but relative numbers will not increase. Two important developments serve to prevent decrease, and these are the continuing growth of robotics appearing in agriculture, warehouse and medical care; and the ever more sophisticated manufacturing processes, including 3-D or additive manufacturing. The promise of 3-D manufacturing combining computers, the Internet and dimensional printing is to create products at-site and one-at-a-time, thus removing the advantage of low-cost labor far away. If promises are met, this will lead to the decline of Wal-Mart-style enterprises, including global shipping, supply chain management, business travel, etc.
Job creation that includes growing the number of jobs will continue to be in services and applying new manufacturing technologies. Service jobs are flexible and more amenable to innovation than traditional jobs. However, regions of low-cost labor with unskilled and semi-skilled workers will suffer severe job declines. Texas and even more so, Mexico, must increase educational levels or suffer high unemployment as the march of technology continues. Educating brains creates new jobs, and that is the future of jobs!
We are seeing a century-long emerging pattern in the changing character of jobs. One aspect of that pattern is the ever-increasing role of technology. Policymakers must create funding and incentives to push organizations and employees to avail themselves of education. Persons in charge of organizations must work to create continuous learning cultures. Honda received much favorable press years ago for the enthusiasm of its workforce and the power that line employees had to stop the assembly line if they spotted some manufacturing flaw. Those employees that found problems and worked on solutions were celebrated by peers and the corporation.
Parents also play a critical role in preparing their children to succeed at school and at work. Parents must make certain that their students are taking coursework in science, mathematics and technology. Writing and speaking are critical skills as well, and are developed through courses in English, history and the social sciences.
The jobs of tomorrow will continue to change, and we must be ready to harness the potential that tomorrow brings.
Michael Lauderdale is the Clara Pope Willoughby Centennial Professor in Criminal Justice and chair of the clinical and administrative leadership concentration at The University of Texas at Austin. Noel Landuyt is the director of the Institute for Organizational Excellence and a research associate in the School of Social Work at The University of Texas at Austin.
