Business, government and nonprofit leaders across West Michigan have collaborated in non-political strategic community assessment and action initiatives for 20 years. Through objective data gathering and thoughtful dialogue, we have identified our strengths, weaknesses, opportunities and threats relative to other regions and communities. Our perceptions of how the world is changing and what we need to do in response to ensure our community continues to thrive in a sustainable manner align with author Thomas Freidman in Thank You for Being Late and Dobbs, Manyika and Woetzel in No Ordinary Disruption. Former U.S. Secretary of Labor, Robert Reich’s documentary Inequality for All offers similar perspectives.
Middle class, major worries
While West Michigan as a whole is thriving better than most regions, a large and growing number of residents are not sharing in this prosperity. Many of the challenges and disruptions our community confronts are similar to other communities across North America and developed nations in Western Europe, Japan and Australia.
Advances in computers, telecommunication and automation technologies, combined with global outsourcing, are irreversible realities that are severely impacting middle-class residents’ ability to sustain themselves. In addition, there is an accelerated migration of people seeking safety, freedom and work, causing our community to become more diverse.
The net effect of these shifting tides is that middle-class residents with relatively low education, knowledge and skills are losing their economic relevance and value to employers and, with this, their sense of grounding. They feel betrayed and believe the American Dream social contract of “work hard and play by the rules and you can get ahead” has been broken. They are scared and angry because they’ve lost their ability to earn sufficient income to sustain themselves and their families.
The inability to earn a living wage means families have inadequate resources to pay for rent, healthcare and childcare expenses. Their inability to accumulate savings means these families lack financial security to fund retirement or cover emergency medical, house repair or personal transportation expenses. The cumulative stress of living in a non-sustainable manner fosters a host of negative social outcomes related to mental health, substance abuse and family fragmentation. Most working adults who are caught in this dilemma don’t understand why their world is collapsing or what to do about it. They simply feel abandoned by employers and government leaders.
For the last 50 years, federal and state policies and priorities have primarily focused on promoting economic growth and supporting those living in poverty. Far less attention has been given to the growing plight of middle-class residents caught in between.
The basic framework of our American K-12 education system was designed in the 1800s as we were transitioning from an agricultural and apprenticeship economy to industrialization. Its goal was to train a middle-class workforce to perform repetitive tasks required to work on mass production lines and clerical pools or manual craft work. The level of knowledge and skill afforded by a high school education enabled families to earn sufficient income to support a modest middle-class living standard in the industrial era.
However, advances in computers, the internet, automation and globalization have changed the economic landscape and the nature of work. The economies of developed nations have been steadily evolving toward knowledge industries driven by new technologies and constant innovation. Production of manufactured products requiring significant labor content has increasingly shifted to developing nations with dramatically lower labor, benefit and operating costs. Many employers have been forced by competitive realities to embrace new labor-saving technologies and/or global outsourcing, reducing local demand for lower-skilled repetitive task workers. Furthermore, white-collar jobs are put at risk by the growing application of artificial intelligence made possible by quantum computing and hyperlinked computers that can perform, in a fraction of the time, functions previously performed by knowledge workers.
Through no fault of their own, a growing number of middle-class workers are losing their economic relevance to our community.
Focus on symptoms or causes?
Many of our community’s three-sector leadership conversations have been focused on the visible negative consequences of these disruptive global forces:
- Stagnant wages of less-educated and lower-skilled workers causing a growing income gap compared to those with four-year degrees.
- Lack of affordable workforce housing.
- Access to and affordability of healthcare.
- Increased rates of family conflict and divorce.
- Increased rates of children born to single mothers or raised in single-parent homes.
- Increased substance abuse.
- Increased emotional trauma and mental illness among students and adults.
The question we must ask ourselves is whether we are focusing too much of our time and energy on the symptoms rather than identifying and addressing the root cause of these disturbing outcomes: our growing population that lacks the knowledge and skills required to earn a living wage.
What are the likely long-term consequences, if we as community leaders fail to recognize this root cause and act with a sense of urgency to correct it?
Rethinking the model
The world is changing faster than our education and training systems are adapting. To earn a living wage in America today, every worker must be competent in basic “how to learn” skills like reading, math and scientific methods. They must also have knowledge and soft skills that are difficult to automate, such as the ability to work in cross-functional and cross-cultural teams to solve complex problems and innovate products and services to meet the needs of a rapidly changing world.
We each need to rethink our respective business and organization models relative to the knowledge skills our own employees require to earn a living wage while remaining competitive in the cost of our products and services.
As employers and education leaders, we must collaborate more effectively to adapt our education and training systems and funding models to better empower students and working adults with the knowledge and skills they need to earn a living wage. In so doing, we will reduce the cost of social services and create a strong, growing middle-class workforce with the knowledge and skills our businesses, governments and nonprofit organizations need for our communities to thrive.
Jim Brooks is a Holland-based philanthropist and business executive, and a member of the Talent 2025 CEO Council.