Brown on skills

Brown says we need to become more skilled:

As a result of changes in the global economy many of the jobs British workers do now are becoming redundant.
Of today's 6 million unskilled workers in Britain we will soon need only half a million - over 5 million fewer.
We have 9 million highly qualified workers in Britain - but the challenge of the next ten years is that we will need 14 million - five million more. Higher standards of living will depend on higher standards of learning.

There are four problems here:
1. The misplaced confidence  in futurology. How can Brown claim to know what  thousands of employers will need in years to come, when he and his colleagues don't even know what their own employees are up to today?
2. The fallacy of composition. For any one individual, getting skills is the key to getting better wages. But it doesn't follow that the same is true writ large. If we all become more skilled the effect might be merely to bid wages down.   
3. The Star Trek fallacy. It's a common error in forecasting to extrapolate present trends; Star Trek writers foresaw space travel but not the internet. Maybe Brown is doing the same. Let's grant - which might not be true - that globalization has in recent years raised demand for skilled workers relative to unskilled ones. It doesn't follow that this will remain the case. This paper (pdf) argues that even skilled workers will soon face competition from lower-paid Chinese and Indians. Meanwhile, demand for many workers deemed to be low skilled - cleaners, shelf-stackers, care home workers - is sheltered from foreign competition. And indeed, there might be a replacement demand for such workers, as the current generation of older unskilled workers retire.
4. Blaming the victim. What Brown doesn't say is that there is already an over-supply of skills. Table 3 of this paper estimates that over one-fifth of men and a quarter of women are over-qualified for their jobs. Table 5b of this this paper (pdf) reckons that over half of workers are moderately or severely over-qualifed.  And this paper (pdf) estimates that a third of graduates are over-qualified for their jobs.
One could equally well argue (pdf), therefore, that what the economy needs is not more skilled workers, but rather that employers use the skills workers already have.
However, one feature of Boss party ideology is that workers must adapt to the needs of capital, not vice versa.

Comments

[Bob B]

All very curious. Here is Gordon Brown today on Keynes:

"For most of the past half century we have had a Keynesian paradigm - either you are in work or you are on welfare. And in the old days it was the economy that had to create work - what prevented full employment was lack of jobs. Now we need a new and very different paradigm. If in the old days the problem as unemployment, in the new world it is employability. If in the old days lack of jobs demanded priority action, in the new world it is lack of skills."

And in the Financial Times today, we have Lawrence Summers (professor of economics at Harvard and previously US Treasury Secretary in the Clinton administration) saying what urgently needs to be done to avert recession in America:
http://www.ft.com/cms/s/0/b56079a8-9b71-11dc-8aad-0000779fd2ac.html

Whose economics am I to believe?

[Maynard Handley]

You forgot fallacy 5, the Economist's fallacy:
The assumption that the quantity of stuff in the world can magically expand to accommodate an ever larger and wealthier population.

There is only so much land in the world, only so large a sustainable fish catch, only so much tropical timber, only so much oil. The more once-poor people (China and India) there are sharing in the goodies, the fewer goodies there are going to be for the West. All the changing of skill-sets in the world will not change this fundamental reality.

We've now had thirty five years of scientists telling us our population growth is unsustainable, and thirty five years of know-nothing economists (not to mention their idiot allies in the religious and political spheres) telling us no, no, magic extra oil and fish and irrigation will bubble out of the earth if we only pray hard and cut taxes.

[nigel Clarke]

Interesting comment but as Gordon Brown has been wrong on most of his statistics I feel I can only give him 10 out 6 on his predictions.

[MJW]

Does it really matter what Brown says about upskilling the workforce if the actions his administration actually take are counterproductive to any such statements?

http://politics.guardian.co.uk/publicservices/story/0,,2214382,00.html

http://www.bbk.ac.uk/news/birkbeck-briefings/elq-briefing/q-a/

[reason]

You are correct on all points. But it doesn't change the fact that there is a significant micro-economic problem concerning work skill aquisition in a rapidly changing world, where firms can not capture the value of their investment in training, and individuals carry high risk and opportunity cost in doing it themselves.

Lifetime learning = micro-economic reform. 60 hour weeks (for parents leading to divorce) and leaving skill acquisition to chance on the job training aren't the answer.

[Glenn (aka angry economist)]

The lastest employment demand forecasts from Warwick Uni's Institute for Employment Research are in 2014 for 10.4 million employees in low or no skilled jobs - representing 33% of all employees.

http://research.lsc.gov.uk/LSC+Research/published/skills-in-england/

Who's gonna wait tables, sell the Evening Standard, pick up litter etc? these jobs still need done, you don't need a degree to do them.

Chris - you're right about replacement demand.

I think Brown has got mixed up between the level of skills required for a job and the qualifications of the workforce. The projections for workforce with no quals might well chime with his spiel. But what matters is skills demanded and deployed in the job, not qualifications of the workers.