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Sometimes insight and inspiration come from an unlikely place. Recently, I was invited to join the Facebook page for my high school’s 50th reunion, which is next year. As expected, it was fun hearing from those voices from the past, though I believe the Facebook connections were only a small fraction of the 1100 graduates in our class. My high school, Brooklyn Technical High School, or Tech, as, we called it, was a specialized high school that drew its students citywide and required a test to get in. I guess Tech was one of the forerunners of today’s magnet schools. Tech’s curriculum was designed to prepare us for entry into the technical industries with course majors in aerospace, electronics, chemical engineering, etc. It was rigorous and it was tough. And, hell, I was one of those geeks running around with a pocket protector with a six-inch steel ruler clipped to it, and a slide rule clipped to my belt (and I wasn’t teased for it because that was the norm).
One of my classmates made a comment that he noticed during a visit to the school that the foundry classroom had been converted into a storeroom. Foundry was one of those classes that was supposed to prepare us for a technical career. It was a shop class on how sand molds were made to cast steel parts. We also took another class called Industrial Processes that covered how metals, wood, and plastics were processed in industry. This was all part our training to ready us for a technical career in the 1960s. One highlight of the Industrial Processes class was a road trip to a Bethlehem Steel plant in Pennsylvania to view in operation the open hearth and electric arc furnaces that fabricated steel and steel parts. Even though low-cost imports were just beginning to come in from Japan, the plant was still a thriving, busy facility. My classmate’s comment about the Foundry class struck me immediately as a metaphor for what has happened in the US in the last three or four decades. I wondered about that Bethlehem steel plant and did a quick Google search, only to learn that the company had gone bankrupt in 2001. The plant that I had visited is now a Sands Casino (according to Wikipedia).
I’m now living in a Buffalo suburb. There are many old red-brick buildings in Buffalo and Lackawanna that reminded me of the buildings at that Bethlehem steel plant. These, too, used to be factories and manufacturing facilities employing thousands of people in well-paying jobs. They are now apartment lofts and museums. Yes, SolarCity is building a new plant here that will supposedly hire 1460 workers, but that is a shadow of what industry used to employ here. There is an effort to fund biomedical startups, but no one is under the illusion that we’ll be able to match the employment of my parents’ generation. Too many of the grandkids of the workers from those old plants now have far fewer opportunities and good paying jobs in manufacturing. Maybe they can get jobs at some of the local call centers (if the centers haven’t all moved to India) and as healthcare workers taking care of their grandparents. Unfortunately, many of those jobs don’t involve benefits. So, do you think this isn’t part of what’s powering the churn and disruptions in this year’s election?
While browsing Tech’s website, I discovered the method for students to choose their majors had been changed. In the sixties, you simply chose your major. Today’s it’s a process that involves something called the Power Index (PI), where each student is ranked according to his or her academic average, with some weighting on a couple of critical courses. Students then go online and list their choice of majors in order of preference. Those with the higher PI get their first choice, etc. Why is this process necessary? I think you can guess. I bet most of the students probably want to go into computer science. Well, why not? That’s where the money is these days. Unfortunately, the tech industry has not come close to filling all those abandoned red brick building with jobs. Not when they make their hardware, and even their software, overseas.
The method of major selection is also a metaphor for today’s data driven society. At one place I worked, I was forced to rank the engineers reporting to me. The bottom 10% were mandated to be graded as Needs Improvement, even if their work was satisfactory. This was in line with Jack Welch’s philosophy of ranking all workers and firing the bottom 10% every year. Today, workers are commodities that can be discarded. Yes, I know that to manage something you need to measure it first. At least that’s the theory. Problem is, people aren’t cogs.
I remember being told, “Don’t worry, even if the Japanese take over the steel and auto industries, we still have electronics.” Then a decade later, we were told, “Don’t worry about the electronics manufacturing plants that are being moved to Korea and Taiwan, because we still have the software and engineering.” Then a decade later we were informed of the research and engineering centers being opened in China by our transnational corporations. And, so it goes. Add the impact of automation on manufacturing and the future of those kind of jobs here looks rather bleak.
The rise of Trump and Sanders in this election season comes as no surprise to me. A century ago, William Jennings Bryan led a populist revolt against industrialization. He lost, but there was a future of industrial jobs created during the Industrial Revolution that helped mitigate the transition. The Information Revolution has not supplied the equivalent number of replacement jobs and is diligently working to eliminate more of them with automation. So what’s next? Tell me what the future will be for my grandkids?
This is the first in a series of blogs addressing this issue.
Note: A shortened version of this blog appeared in the Buffalo News “Another Voice” section on November 8, 2015
In one of those strange ironies of history, the automobile arrived as a response to an environmental issue of the time. In 1900, there were more than 100,000 horses in New York City and Brooklyn, creating about 4000 tons of manure and urine daily that had to be removed. Hundreds, if not thousands, of workers toiled daily to cart off that mess. Horse manure had become a significant health hazard for urban dwellers. There were even reports of a haze of manure and urine in the air in poor neighborhoods where the cleanup was not as effective.
A Rich Man’s Toy
Some saw the automobile as a potential solution to this problem. However, this was a time when automobiles were still in their infancy and could only be afforded by the wealthy. I bet those workers who mopped those city streets, along with buggy and buggy-whip makers, led those who derided these newfangled toys, with shouts of, “Get a horse!” when an early automobile drove by. Yet there was enough interest in the nascent automobile industry to spawn hundreds of automobile companies, each trying to build a better car and create a new market. Most of those companies came and went as they failed to find the magic elixir to excite the public. This is often the case with the introduction of new technologies. Witness what happened in the dot com mania of the nineteen-nineties when many of the companies touting a new business paradigm failed to succeed and create that paradigm. I bet the owners of the buggy whip makers probably pointed to failing early automobile companies as showing the folly of automobiles, just as the owners of brick and mortar establishments did during the rise of the Internet, and just as the fossil fuel companies and other opponents of global warming are pointing to the failure of solar energy companies like Solyandra as proof that renewable energy is doomed. In the first decade of the last century, the automobile seemed relegated as a toy, a plaything of the rich, much as the Tesla electric car is considered by some today.
Henry Ford: Game Changer
Then, in 1909, along came Henry Ford with his Model T automobile and everything changed. Ford touted the Model T as the “every man’s” automobile, while paying the highest wages to enable his workers to afford their own car. Sure, at the time, the Model T was probably more expensive to purchase than a horse, but what you could do with it! Suddenly the average worker could afford cars and the horse manure problem was solved. The automobile took off and became a huge industry employing thousands.
And what do you think happened to those workers who cleaned the manure off city streets when there was no more manure to remove? They probably ended up paving those streets for automobiles or they became automobile mechanics and gas station attendants. What about those workers at the buggy whip makers who lost their jobs? They found higher paying ones in automobile factories.
One man’s risk is another’s opportunity. Economists and historians have a term for this process of new industries and technologies replacing older ones: creative destruction. It’s happened time and time again in history. Prime examples include the supplanting of 19th century individual artisans with corporations driven by the Industrial Revolution-developed machinery and the aforementioned development of the Internet. In such instances there were winner and loser companies, but the winners always drove the economies to greater heights.
I’m reminded of that wonderful diatribe by Danny DeVito in the movie “Other People’s Money” (https://www.youtube.com/watch?v=62kxPyNZF3Q) where he played a 1980s style corporate raider, Larry the Liquidator, trying to take over a family-run wire-making manufacturing firm in New England. In his diatribe he talks about buggy whip makers. “You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw.” Then came the zinger. “Now how would you have liked to have been a stockholder in that company?” Isn’t it time to replace the 20th century source of energy with a 21st century source?
Do You Want to Own a 21st Century Buggy Whip Company?
Yes, there will be some disruption as we switch to renewable energy and sustainable manufacturing. However, in the long run, new industries will be created along with new jobs, and the economy will grow based on those new industries. Germany already gets about forty per cent of its electricity from solar and other renewable sources, and still remains a competitive world industrial power. Today’s fossil fuel companies are the buggy whip makers of the 21st century.
And, yes, the automobile ultimately played a significant role in another environmental problem, but along the way it contributed to a huge leap in prosperity, helping to create the richest country in history. So now we’ll use technology to solve the problem created by automobiles and fossil fuel electricity generation. Along the way we’ll spawn whole new industries with new opportunities. That’s just how the world works. The whole arrow of human history points that way. Who knows if Solar City, Elon Musk’s and other’s bet on solar energy, is the next Ford Motor Company? Only time will tell, but it’s a step in the right direction.
More importantly, by adopting renewable energy, we may save the world for our children and grandchildren, but that’s a subject for another day.