This entry reflects some of the best reporting produced in 2019 by Becca Schimmel.
The stories included here tackle complicated and multi-layered subjects and present them in a way that is accessible and interesting to our audience. Becca's stories explore the potential impact increased automation might have on our region's workforce, and how many of the worker retraining efforts lauded by political and business leaders won't likely have the promised results.
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Automation For The People? Ohio Valley At High Risk For Job Losses
Amazon employee Andre Woodson made his way among yellow bins traveling through a vast warehouse filled with boxes and envelopes to be packed, sorted and shipped. In Amazon-speak, this is a “fulfillment center.”
“Our Jeffersonville, Indiana, fulfillment center is about 1.2 million square feet, which is equivalent to about 28 football fields,” Woodson explained.
About 2,500 people work here. But looking out across the floor it’s sometimes hard to find a human among the boxes, bins and conveyor belts. Often they’re working closely with the machinery. At a packing station an employee is surrounded by boxes and envelopes of different sizes.
“So here at our ergonomic pack stations our great associates interact with the technology to package customers’ orders,” Woodson said as the employee scanned items. A computer shows the optimal box size to be packaged. “The tape machine will push out the perfect amount to tape so they can seal the box,” he said.
There are about 20 Amazon fulfillment and distribution centers like this in Kentucky and Ohio. Some are the host town’s main employer. About 20 percent of the workforce in Campbellsville, Kentucky, for example, works at Amazon. UPS and other product delivery services have a large presence in the region as well, and all are likely to make more use of automation.
“We have a lot of what we call 'pick and pack' warehouse facilities and those facilities have a lot of people in them, but they also have a lot of computers and robots,” Michael Gritton said. He’s executive director at KentuckianaWorks, a nonprofit organization focused on workforce development in Kentucky and Indiana.
“Over time you would expect those facilities to have fewer people and more computers and robots,” Gritton continued.
The Ohio Valley has seen its workforce disrupted from the decline in the coal industry and globalized trade's effects on manufacturing. Automation is again changing the way we work and is predicted to lead to more disruptions.
That has planners like Gritton concerned about what rapid automation could bring, and it’s not just the warehouse workers at risk. A recent Brookings Institution report showed about one-quarter of all jobs in the Ohio Valley region have a high chance of being wiped out by automation, with service jobs, truck drivers, and office administrators among the most vulnerable. That could lead to disruptions in employment and greater income disparity.
Growing Gap
The Brookings report ranked states according to the proportion of their workforce deemed vulnerable to dislocation. Indiana and Kentucky are ranked first and second, respectively. (Ohio comes in 13th and West Virginia is 16th.)
Gritton worries that disruption could result in more people moving to the bottom of the earning scale, further exacerbating income disparities. A graph showing the income and job distribution would begin to look like what he described as a barbell, with low-wage workers at one end and “a few, big super-winners, and not much in the middle.”
More people could become reliant on jobs that involve irregular schedules and lower pay. “That doesn’t seem to be a recipe for a happy Kentucky, a happy Louisville or a happy America,” he said. “So that’s the conversation the country’s going to be having about this change as it happens.”
Gritton said education is going to be key in adjusting to changes in the workforce. He said government leaders need smarter strategies to invest in people more than one time in their lives.
“We’re trying to work to help people reskill and retool where they can,” he said, but noted that the demand for that is beginning to look daunting.
“There are going to be more and more people we’re going to run into who are going to be asking for this opportunity to upskill, to move their skill levels up to make them marketable in an economy that’s going to be demanding that. But I think it’s a big open question, who pays for that?”
Constant Learning
Mark Muro is the lead author of the Brookings report, which does more than just point out potential problems. The report also showed that education can make places and people better able to adapt.
“We call it promoting a constant learning mindset, but it can’t simply be the responsibility only of the workers,” Muro said. “The whole system has got to change.”
Muro said the way the education system is set up now doesn’t encourage lifelong learning and the constant development of new skills.
He said people need affordable ways to develop the skills that are uniquely human by investing time into becoming creative problem solvers and developing interpersonal skills.
“Get better at being human,” he said. “What we should not do is try to compete with the robots because they will always do a better job at basic rote tasks.”
Muro said the places with higher levels of degree attainment will have the least amount of exposure to automation. The Ohio Valley is at a higher risk because of the share of workers in agriculture, small factories and the service industry. But Muro said because the Ohio Valley region is mostly rural, it may have more time to adjust to these rapid shifts and prepare people for change.
“The technological possibility doesn’t mean reality and there is likely to be a time delay,” he said. “Which may be a time for the region to buy itself time and begin thinking about retraining some of its workers to make sure they’re in the most resilient and promising fields.”
Muro said it’s important to understand that new technologies will be able to do a lot of different tasks but not whole jobs. He said that means entire jobs or fields won’t be suddenly replaced by robots.
“It’s not like this has created an epidemic of joblessness and done away with wholesale employment, that’s simply a misnomer,” he explained.
The Brookings report looks at what it calls the Information Technology Era. When machines handle routine activities, it frees up the human capacity to create new products and tasks. For example, the report notes that the increase in consumer banking services was occurring as ATM machines were replacing some tasks bankers did.
Bargaining Power
Not everyone sees automation as the great threat some predict. Jared Bernstein is a senior fellow at the Center on Budget and Policy Priorities. He recommends a more nuanced view that emphasizes job quality over quantity.
“Try to understand less the extent to which technology is going to displace workers, because that’s actually pretty unknowable, and more thinking about its impact on the quality of jobs,” he said.
Bernstein said the problem with the argument that robots are coming to take jobs is that the country is creating about 240,000 jobs a month and unemployment is low.
“I don’t mean everything is fine by a long shot, but I think people face a lot of economic challenges that don’t have all that much to do with automation and have a lot to do with just their personally weak bargaining power,” he said.
Bernstein said automation has changed jobs for those who have reskilled and made themselves complementary to the machines. He said it’s the responsibility of the government to push companies like Amazon in the right direction.
“Left to their own devices private companies would never invest enough to help workers make a transition because it’s not in their interest,” he said. “They can’t profit if they teach you to be more productive in a different industry or a different job.”
However, Bernstein warned, the government’s track record for preparing workers for these type of transitions is not good enough.
Rapid Change
Jane Oates agrees that automation and technology have always led to disruptions in the workforce. The difference this time, she said, is the pace of that change. Oates is the President of WorkingNation, a national nonprofit focused on what it calls the looming unemployment crisis. She said people need to understand that every sector is changing and those who aren’t willing to make changes to become lifelong learners are going to be left behind.
“We as a country had 140 years to move from an agricultural society to an industrial society,” Oates said. ”We could adapt to anything with that kind of warning time, but now things are changing over a weekend.”
Oates agrees with Bernstein that employers should be responsible for preparing the future workforce and she said there’s a way the government can reward workplaces that do.
“When you allow federal dollars to be spent for incumbent worker training, that sends a clear message that if an employer wants to do the right thing there are government dollars that could assist there,” she said.
That sort of proactive policy could be the difference as automation changes the workforce. Without it, it’s possible that a place like the Ohio Valley could be left further behind.
Correction: The organization WorkingNation formats its title as one word, not two as the name originally appeared in this story.
Rethinking Retraining: Why Worker Training Programs Alone Won't Save Coal Country
Bobby Bowman mined coal in West Virginia for 12 years before his employer shut down.
“I don’t think that mine will ever open again,” he said.
Bowman lives in Welch, in the south of the state, where he worked at the Pinnacle Mine, which shut down almost exactly one year ago, putting him and about 400 others out of work. After waiting a month in hopes someone would buy Pinnacle and the mine would reopen, Bowman decided to do a four-week training program offered by the United Mine Workers Career Center.
He enjoyed it and earned a certification in heavy equipment operation. But when Bowman came back home, he struggled to find a job in the field. So Bowman took matters into his own hands.
“So I sent myself through truck driving school and that’s what I’m doing today,” he said.
Bowman is not alone. In the midst of the region’s declining industries, politicians are betting big on job training, with millions directed at those who lost jobs in coal mining and power plants.
The U.S. Department of Labor recently announced nearly $5 million for worker training programs in Appalachia. It’s the latest influx of funding aimed at blunting the job losses in the region’s coal sector.
Recently Sen. Mitch McConnell of Kentucky announced more than $2 million in funding from the National Dislocated Workers fund, and Sen. Joe Manchin of West Virginia announced more than $1 million in funding from the same program.
But critics say worker training alone is no solution and that such retraining programs have a poor record in actually connecting dislocated workers with local employment that pays a comparative wage.
“There are great examples of ones here in Appalachia who have trained people for jobs then they couldn’t find employment,” Ted Boettner said. The executive director of the left-leaning West Virginia Center on Budget and Policy, Boettner said job training hasn’t made up for the number of jobs lost by the coal industry. He and other economists argue that a more broad-based approach to jobs, public investment, and wages will be necessary for coal country.
Wage Gap
“You have to realize a lot of this is in the backdrop of 40 years of wage stagnation across this country and especially men in West Virginia,” Boettner said.
He said job training needs to be connected to employment that pays well because it’s difficult to go from a $75,000 a year coal mining job to one that pays $12 or $15 an hour. Boettner points to areas of opportunity, such as Appalachia’s needs for mine reclamation work which could also provide jobs for coal miners similar to the work they’ve already done.
“We have $4 to $5 billion in mine site reclamation that needs to happen,” he said. “That's enough jobs, that's thousands of jobs, and billions of dollars of investment right there.”
Josh Benton is deputy secretary of the Education and Workforce Development Cabinet in Kentucky, where miners have been hurt by recent coal bankruptcies. Benton said the state has had some success retraining people to work in the healthcare industry. But the real challenge is finding jobs where that displaced worker lives.
“The challenge that we face is not necessarily are the training programs effective? It is, are there other industries, for those displaced workers to go to work,” he said.
Benton said the jobs that have been created in technology or healthcare don’t make up for the ones lost in the energy sector over the last 10 years. Wages are another concern. He said it’s a tight labor market and he tries to communicate that to employers who are looking for skilled workers, but offering low wages.
“If a manufacturer, for example, is paying an entry-level wage of $11.50 an hour, you know, if we're aware of that, we can say that the average entry-level wage for manufacturing across the state is really $14 an hour,” he said. “So, it's not surprising that you're struggling to find someone because you're paying below market value.”
Political Appeal
Gordon Lafer is a professor at the University of Oregon, a research associate at the Economic Policy Institute, and author of “The Job Training Charade.” Lafer argues that job training pushes a false narrative that employers aren’t hiring people because they can’t find workers with the right skills.
“I think that job training keeps being promoted because it solves a political problem both for elected officials and for employers, but it doesn’t do anything for the economics,” he said.
Lafer said the most important thing to understand about job training programs is that they don’t create new jobs. However, he argues, those programs do create a convenient narrative for politicians on both sides of the aisle.
“Job training is one of the favorite things of both Democrats and Republicans because it’s cheap, it’s symbolic,” he said. “It kind of places the blame on workers instead of employers because it suggests only if you had the right skills or the right work ethic or something then you wouldn’t be in the trouble you’re in.”
Lafer said the employment picture in the Ohio Valley is especially important because of its connection to climate change. He said talk of a “Green New Deal” and a move away from polluting industries should include a just transition for those who would lose jobs.
“It’s just not in good faith to say, one group of people is going to pay the price for saving the planet,” he said. “Either we have to say, we’re going to take care of people from age, whatever they are when they lose their jobs to when they would retire. Or there have to be other jobs that are real jobs.”
Lafer said he’s heard this public policy touted as a solution for years, but it isn’t creating employment opportunities as advertised.
“You could take on every argument, bring all the statistics and show why it doesn’t make sense. As a policy job training feels like the undead to me,” he said. “Like you can drive a stake through its heart and it keeps coming back up.”
Different Approach
Lafer said a better approach is to train people and invest in the industries that can’t move to a different country with cheaper labor once they get to a scale where they need more employees. Some of those industries include healthcare, construction, education, and tourism.
Economist Ted Boettner said public investments in infrastructure, including expanded broadband, could help create a stable economy that works for everyone.
“Have we upgraded our antiquated grid? That’s thousands and thousands of jobs in West Virginia if we just upgrade the grid,” he said.
As automation continues to grow, and the coal industry declines, more people will be displaced. The challenge is training those workers for jobs that pay well and aren’t likely to be outsourced or automated.