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New study shows what your community needs to do to survive the impact of automation

Every state requires multiple sets of strategies, per this analysis by Walmart.

New study shows what your community needs to do to survive the impact of automation
[Animation: PhonlamaiPhoto/iStock; Clker-Free-Vector-Images/Pixabay]

Imagine that you’re the governor of Pennsylvania or Vermont, and you’re trying to figure out how to help your state cope with the impact of automation. What policies do you pursue first to ensure that people can succeed as the job market is rapidly remade?

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Actually, that’s a trick question.

As a new study from Walmart makes clear, every state requires multiple sets of strategies, each one tailored to fit a particular “community archetype.” In fact, of the eight archetypes that the report identifies, Pennsylvania has seven of them within its borders. Even Vermont, with a total population just north of 600,000, contains four archetypes. On average, each state has five.

“It really highlights the need for local solutions,” says Kathleen McLaughlin, the chief sustainability officer at Walmart, which will release the analysis today at the Bentonville Conference on American Life.

Drawing on research from the McKinsey Global Institute, the Walmart study examines economic, demographic, and educational attainment data from the more than 3,000 counties in the United States. Accompanied by an interactive map, it paints a picture–“a striking national mosaic,” in its words–that reveals how incredibly complicated it will be to cushion most Americans from economic upheaval.

Disclosure: Walmart, along with Google.org., is the lead funder for an initiative that my Drucker Institute colleagues and I are undertaking to tackle this very issue. Along with our partners at the design firm IDEO, we’re creating a system of lifelong learning in South Bend, Indiana. If the system proves successful after we launch it in 2020, we plan to replicate the model around the country.

“The future of work is not a dichotomy of urban versus rural or the coasts versus middle America,” the Walmart report says. “Each archetype has distinctive strengths and challenges that will determine its resiliency and shape its response to automation.”

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As defined by Walmart and McKinsey, the eight archetypes are:

  • “Urban centers and core suburbs,” which are made up of the nation’s major metropolitan areas.
  • The “urban periphery,” which enjoy access to the cities they surround but are more distant.
  • “Smaller independent economies,” which stand economically on their own and boast a large portion of white-collar jobs.
  • “Americana,” which, while spread throughout the nation, form the core of what is commonly referred to as “rural America.”
  • “Distressed Americana,” which have already suffered from the drying up of manufacturing and mining jobs.
  • “Rural service hubs,” which are mostly in the Western U.S. and serve as distribution points and commercial centers for surrounding rural areas.
  • “Great escapes,” which are wealthy enclaves and tourist destinations.
  • “Resource-rich regions,” which are blessed with a bounty of natural resources, such as oil and gas or gold.

The Walmart report isn’t the first to use a community lens to zero in on the hazards and hopes that automation brings. A couple of weeks ago, the Brookings Institution published its own groundbreaking study that explores the uneven manner in which automation and artificial intelligence are playing out among various occupations, demographic groups, and places (in its case, at the metropolitan—as opposed to the county—level).

Working side by side with machines

Both the Walmart and Brookings studies share the view that automation isn’t going to completely wipe out most jobs (though it certainly will kill off some). Rather, technology is swiftly altering the nature of many types of employment, demanding that people learn new skills in order to work side by side with machines. If they can’t, more and more Americans are destined to be left behind financially and isolated socially.

Where the Walmart report separates itself is in its attempt to guide policymakers by giving them insight into the nuances of individual locations. Depending on which category a county falls into, Walmart suggests a specific “community intervention.”

Some are appreciative of the approach. Molly Martin, who directs the Indiana operation of New America, a nonpartisan think tank, notes how economic development officials in her state tend to lump together St. Joseph County and Elkhart County into a single region. But, even though they’re adjacent to each other, each faces its own serious threat.

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Among those most at risk to automation in the former, Martin says, are fast-food workers and office clerks, many of them women. But in the latter, with its concentration of production jobs, “it’s the guy in a hard hat, the guy on the assembly line” who is most in danger.

“It doesn’t mean the two counties can’t do things together or learn from each other,” Martin says. “But they are dealing with entirely different challenges.”

Others are skeptical of Walmart’s methodology. “I don’t understand why you’d do a county-by-county report when it’s metro areas that determine jobs,” says Nan Whaley, the mayor of Dayton, Ohio. “It seems like a silly exercise.”

For their part, Walmart executives stress that they’re not trying to be overly prescriptive. The study “is meant to inspire conversation,” McLaughlin says.

Indeed, regardless of how fine-grained you get, most any analysis is bound to miss a lot of what’s happening from one section of a county or one neighborhood of a city to another.

The Walmart study, for example, labels St. Joseph County a “smaller independent economy” because it is seen as being anchored by a major university, Notre Dame. In turn, Walmart recommends that the community focus on cultivating skilled white-collar employees and entrepreneurs while attracting businesses interested in taking advantage of this strong base of knowledge workers.

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“That makes sense–but it’s only part of the story,” says Pete Buttigieg, the mayor of South Bend, the seat of St. Joseph County. While Notre Dame is a huge asset, he explains, it doesn’t provide a realistic path forward for most of the people in a “diverse, low-income, post-industrial” city like his.

Buttigieg, who chairs the U.S. Conference of Mayors Task Force on Automation and is contemplating a run for the White House, believes that those in blue-collar and low-end service jobs–as well as the long-term unemployed and those who’ve dropped out of the labor force entirely–must be offered more accessible avenues to acquire critical thinking and interpersonal skills.

Struggling to stay afloat

The bottom line: Even communities that appear best equipped to absorb the effects of automation often have large numbers of residents struggling to stay afloat. Walmart acknowledges this sobering reality, pointing out that urban centers are “are well-positioned to harness automation for economic benefit, as evidenced by growing populations and GDP”—but they also “house considerable inequality.”

Mark Muro, a senior fellow at Brookings’s Metropolitan Policy Program, agrees that few, if any, places will be immune to automation’s sting. Big cities “contain the greatest socioeconomic diversity,” he says, “and there is no doubt that many of the most vulnerable demographic groups will be hit again” as the employment landscape becomes ever more volatile.

In addition to improving job training and education, the Walmart report calls out the importance of “modernizing the social safety net,” boosting mobility within the labor market, constructing necessary physical infrastructure (such as public transportation to get people to jobs), and spurring economic development. “Skill building,” it observes, “only has value if a community has jobs to tap the new skills.”

To implement this agenda–and to do it in the right sequence and with the right emphasis in the right spots, depending on the characteristics of any given community–won’t be easy.

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“Effective responses,” the report says, “will require an integrated approach and cooperation across a range of stakeholders”–public, private, and nonprofit. Unfortunately, it adds, “this collaboration is happening the least in the communities that need it the most.”

This is partly because, outside of big metropolitan areas, it can be all but impossible to mobilize sufficient organizational capacity, but it’s in these suburban, semi-rural, and rural communities where about 190 million people, or 60% of Americans, live.

Even when all sectors are involved, getting them on the same page can be hard. Many employers have a rough time articulating the exact skills they covet, making it difficult for workforce development boards, community colleges, and other educational institutions to put together courses that are relevant and up to date.

“You’ve got to break it down: What are the tasks to be performed? What are the competencies needed?” says Martin Scaglione, the president of Hope Street Group, a nonprofit whose “Sync Our Signals” program seeks to address this problem. “Employers have a tough time with that.”

Meanwhile, most businesses aren’t committed to teaching their current workers what they need to know in an age of automation and AI. Corporate training has long been on the decline, especially for front-line workers, and surveys indicate that the introduction of new technologies isn’t doing much to reverse that.

Walmart, the nation’s largest employer with 1.5 million employees, is a notable exception. Although the company’s critics maintain that it doesn’t pay its workers adequately, the retail giant has become an unquestioned leader when it comes to training and education. All told, more than 1 million of its U.S. employees have participated in corporate Pathways and Academy programs aimed at upgrading their skills, including in basics such as numeracy and more advanced topics like merchandising. Last spring, Walmart also began to subsidize the cost of an online college degree in business or supply-chain management so that workers contribute just $1 a day.

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Jobs we can’t even imagine

All of this should help prepare Walmart employees to be ready for new roles as they emerge. McLaughlin says that although automation may lead to a reduction in the company’s headcount over time (mainly through attrition), “there will still be lots of jobs,” many of them unimaginable today, and a good chunk of them higher-skilled. The report cites Walmart’s online grocery business, which has generated 35,000 “personal shopper” slots. Three years ago, that position didn’t exist.

Beyond having different stakeholders coordinate efforts, it’s also crucial that all government actors are in sync–local, state, and federal. “We need everybody at the table,” McLaughlin says.

Governors have the ability to assist communities grappling with the fallout from technological change by carefully steering budget dollars, enhancing statewide systems of higher education, and deploying networks of coaches to bolster workforce development centers.

“States are using all of these levers to help meet local needs,” says Molly Elgin-Cossart, director of the Markle Foundation’s Rework America Task Force.

But, again, none of this is simple. In the past, states would pilot a program in one county and then roll it out to others to achieve scale. As they consider ways to deal with automation, “Scale means increasingly targeting and localizing,” says Mike Bartlett, a senior policy analyst at the National Governors Association. “That’s a much different kind of ‘scale’ than states are used to.”

And what about the feds?

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Buttigieg remarks that one reason so many communities across the country have found it to be a “very fertile moment for local innovation” in recent years is that Washington has been mired by a “paralysis of problem solving.”

Nonetheless, he says, anything that a city or county might conceive to survive and thrive in an era when automation is fast intensifying still “takes place against a federal backdrop” that exerts tremendous control over education, infrastructure, and the social safety net.

The Walmart report also alludes to this power, recalling how the federal government shepherded the U.S. through previous periods of disruption by taking bold steps, like passage of the GI Bill in 1944.

“Maybe we could do something like that again,” says Buttigieg, floating the idea of having all young people devote themselves to a stint of national service in exchange for educational and economic opportunity.

In the end, it is likely the only chance that the United States has to adapt as automation accelerates: Think national, act local.

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About the author

Rick Wartzman is director of the KH Moon Center for a Functioning Society at the Drucker Institute and the author of four books, including his latest, The End of Loyalty: The Rise and Fall of Good Jobs in America. You can follow him @RWartzman.

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