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Workforce analysts often bemoan the fact that our economy is steadily losing manufacturing jobs, having them replaced by low-level service jobs. The basic idea is that the highly paid assembly line worker of former years now must eke out a living at a fast-food joint.
The culprits? Technology that eliminates jobs, and corporations that export manufacturing positions to foreign countries where the cost of labor is dramatically less. Mostly, this is true. There are fewer manufacturing jobs than there used to be. Technology has eliminated a lot of them and cheap offshore production is now standard among American manufacturers.
Mostly true. But not entirely. A new report entitled "Education for What? The New Office Economy," released by the Educational Testing Service, a nonprofit research agency, has found a major flaw in this standard line of economic reasoning. That is, the nature of our economy and the forces that drive it have changed so much that the traditional workforce categories — manufacturing, service, etc. — just don’t work anymore. Instead, the authors of the report, Anthony Carnevale and Stephen Rose, propose a broad new category — the office economy.
Office workers now make up 41 percent of our workforce. Further, our old image of the office as an assortment of secretaries working for a boss or two is outdated and misleading. Today's office workers are a relatively well-educated, highly skilled and mostly professional bunch. Theirs are the "good" jobs of our society. In fact, office workers now account for half of our earnings and include 65 percent of all managerial and professional jobs. Carnevale and Rose say that these folks — not the frequently lauded computer crowd — are the ones making our economy work. "This new Office Economy will reward the people who know how to deploy technology, integrate technology, and market technology. Better technology alone doesn’t win."
Impressions to the contrary, our country is manufacturing more goods than ever before. It just takes fewer workers. "Making the product has become a simple parlor trick in the global economy. It can be done with equal ease in Chicago or Bangladesh."
However, the global economy also has intensified competition. That's where the Office Economy comes in. Those companies or economies that win the contest are those that add the most value to their product — better quality, more variety, improved convenience, stronger customer service, etc. It is office workers — middle managers, financial analysts, marketing specialists and the like — who add most of this value.
The emergence of the Office Economy, argue the authors, coincides with the increased availability of college graduates. More than half of those who now work in offices have bachelor's degrees. The result is that the office is now the workplace destination of most of those who earn a college degree. The report contends that this is not a matter of too much education for the task at hand, since the wages of college graduates are increasing relative to those who are less-educated. Thus, Carnevale and Rose conclude "that the demand for college-educated labor must be increasing even faster than the supply."
A chief upshot of all this is that we have to look anew at how our economy works. We used to imagine the workforce as a pyramid, a handful of elite jobs at the top fanning out below to a much greater number of less-skilled jobs at the base. The report asks us to turn the pyramid over, to see a workplace with more elite and good jobs —more professionals and managers — and fewer less-skilled jobs. Further, the new economy, unlike the old, is more dependent upon higher educational attainment and more sophisticated talents, skills like "teamwork, networking, promotion, and management." Whether they are managers or marketers or consultants or accountants, these new office workers drive the economy by "reinventing, reorganizing, and rationalizing old industries." They are now "the tail that wags the dog."
Neil Murray is director of career services at UCSD.
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