Conference Presentation, Panel, Fireside Chat, Interview
A Conversation with Wilbur L. Ross, Jr., Secretary, U.S. Dept. of Commerce | The American Workforce
Milken InstituteWilbur L. Ross, Jr., Gerard Baker, Bernard Harris, Jr., Barbara Humpton, Jonathan Sokoloff, John, Wilbur Ross
- The American Workforce Advisory Board, established by the President, has secured commitments for 7.5 million apprenticeships over the next five years, with a goal to reach 8 million.
- The U.S. faces a "barbell" demographic challenge: 111 million Americans over age 50 are the fastest-growing segment and most vulnerable to technological displacement, while 38% of working-age adults (44% of those under 25) are not in the workforce.
- Secretary Ross cites a "tragic truth" regarding the educational system, noting the U.S. has the lowest vocational training rate among OECD countries.
- Approximately 40% of college graduates work in jobs that do not require a degree, creating a disequilibrium where the bottom half of college graduates earn less than the top half of high school graduates.
- The student loan crisis involves 42 million Americans with an average debt of $32,000, exacerbated by the fact that 36% of four-year college students fail to earn a degree within six years.
- The administration advocates for a shift from a lottery-based immigration system to a merit-based one (similar to Canada or Australia) to prioritize skilled workers and STEM graduates.
- Current policy is criticized for deporting foreign STEM graduates educated in the U.S., resulting in the U.S. importing products that these individuals could have helped produce domestically.
- Siemens USA, representing the private sector, has set four board objectives: creating pathways beyond four-year degrees, increasing job transparency, reducing over-qualification requirements, and incentivizing corporate training ROI.
- The National Math and Science Initiative (NMSI) has engaged over 2 million students and 35,000 teachers, identifying 114 indicators to map "STEM deserts" at the state, district, and school levels.
- Only 25% of 12th graders rank as proficient in math, and another 25% possess limited numerical skills insufficient to read a pay stub.
- A 13% annual growth rate in STEM jobs projects a need for 2 million new workers in these fields within five to six years.
- Private equity firm Leonard Green & Partners manages a portfolio of 400,000 employees and faces a shortage of STEM professors, who must be paid 20% more than peers in other disciplines to attract talent.
- Millennials prioritize employer trust, higher purpose, and culture over salary, which ranks as their seventh-most important criterion for employment.
- Technological displacement of truck drivers (2.75 million employed) poses a unique risk to balance sheets due to the prevalence of independent contractors who own their vehicles and carry bank debt.
- Automation is expected to create a counter-demand for workers skilled in maintaining complex equipment, moving the labor market away from pure manual labor.
- Community colleges are emerging as critical partners in workforce development, with some institutions bringing mobile classrooms to work sites to facilitate combined earning and learning programs.
- Secretary Ross identifies a bureaucratic resistance in K-12 education, where principals reject industry input on "soft skills" due to state licensing requirements for teachers.
- Siemens is piloting a "digital readiness check," an online rubric that assesses employee digital skills and suggests targeted training modules.
- There is a strategic shift from viewing education as a one-time event to a lifetime model where workers may retrain in their 30s, 40s, and 50s as job functions evolve.
- Proposed solutions include simplifying the certification process for industry groups and unions to increase worker portability and social status for non-degree credentials.
- The terminology "blue collar" is viewed as obsolete, as many high-tech roles involve manual labor; the panel advocates for new language to reflect modern realities.
- Private equity investors observe a shift in consumer spending from retail (3% of portfolio) to service-based industries (63% of portfolio), driving demand for interpersonal and service skills.
- Optimistic projections suggest 200 robots per 10,000 workers in U.S. factories; even doubling this number would not cause a fundamental rupture in the labor market.
- Long-term labor demand is expected to shift toward "soft skills" in health care, counseling, and personal services that require human connection and cannot be easily automated.
- Future success for the Advisory Board is defined by penetrating the educational system to align student skills with market needs and expanding apprenticeship programs.
- New industries, specifically space (projected to grow from $400 billion to $4 trillion), are anticipated to create vast new job opportunities.