May 4, 2020 - From the May, 2020 issue

WorkingNation’s Art Bilger & Jane Oates on COVID-19 Jobs Recovery & Workforce Transition

There have been more than 30 million claims for unemployment insurance since mid-March, when shutdowns to contain the novel coronavirus became widespread. Americans also cut back on spending by 7.5 percent in March—the biggest monthly decline on record since 1959—and saw personal income fall by 2 percent, the largest decrease since 2013. To gain an insight into the workforce challenges of the aforementioned, TPR spoke with WorkingNation’s Founder and CEO, Art Bilger, and President, Jane Oates (pictured), on their organization’s mission—to inform and educate on the changing nature of the economy, the future of work, and the skills gap—to address what was once a looming, but is now a pressing, nationwide unemployment crisis. 


Jane Oates

"What is taking place right now with this massive spike in unemployment in this country is catalyzing the workforce displacement that we’ve been talking about for a while as globalization, technology, longevity, and broken education all come together."—Art Bilger

“As people are figuring out their strategy for reopening, they should be thinking of their strategy for bringing their workers back and reskilling them before they actually put them back on the floor.”—Jane Oates

‘Coronavirus Pandemic Compels Historic Labor Shift’ was the headline of the Wall Street Journal’s coverage at the outset of the month as the nation’s staggering and record-shattering unemployment numbers began emerging. How has COVID 19 affected the very strategic and innovative work that you've been doing at WorkingNation on upgrading workforce skills and development programs?

Art Bilger: There are several factors to consider here; a couple of them are positives from the standpoint of our mission although negatives for society. What is taking place right now with this massive spike in unemployment in this country is catalyzing the workforce displacement that we’ve been talking about for a while as globalization, technology, longevity, and broken education all come together.

I was on Zoom with one educator recently, who was talking about how we're taking 10 years off the period of time it would have taken us to make the adjustment otherwise. For board members, management of companies, nonprofits, and those who run government—when considering ways to alter technological and globalization landscapes—I'm sure most of them were concerned for the people who have been on payroll for ten or twenty years. Now, with those people no longer on payroll in many cases, and with various governments coming up with programs to help support them—at least to some degree—I have a feeling that a lot of decisions about accelerating the jobs transition are going to be made much more quickly.

One challenge to our mission over recent years has been competing with the idea of a 3.5 percent unemployment rate. For those who are most sophisticated, they knew that number wasn't true. For the individual who didn't have a job and was unemployed, they probably didn't buy into it either. But the average person who had a good job, and had it for a while, probably bought into the marketing from the Bureau of Labor Statistics and the President that we had a 3.5 percent unemployment rate—the best in 50 years. 

One problem with that number is we don’t count people in the denominator who have stopped looking for jobs they can’t find. Another is that if you’re terminated from a 40-hour week job on an assembly line in a factory, and now drive an Uber 20 hours each week, you are still considered employed in the numerator. There are other nuances beyond that, but that’s basically why 3.5 percent really was not representative of the employment situation in this country.

Before we went into this terrible pandemic, there were something like 7.5 million unfilled jobs in this country, largely because of a skills gap. All of the sudden, as companies, governments, and nonprofits decide to make changes in terms of technology and operations on a day-to-day basis, the skills levels are going to have to increase. There are going to be a lot of people with a lot of time on their hands and all sorts of programs available to really upgrade skills levels.  

Jane Oates: Before COVID-19 hit we were deeply in discussions around the country about the skills mismatch and the need to upskill people. If you look at jobs, the big issues basically center around access and mobility.

We have no idea how many of the 30 million people who filed for unemployment claims will have a job to go back to. We'll know a lot more about what strategies need to be in place, once we see how many of them are looking for a new job. 

Jane, you were long-involved on these issues in the Labor Department under President Obama, but obviously have never faced anything quite like this. If you were in that position of responsibility in Washington DC right now, what would be on your mind, and what would be your thoughts about prioritization?

Jane Oates: The first thing on my mind is the capacity of the states. We have never seen states have to process unemployment applications at this magnitude before. When I was in the Labor Department during the recession, they were stretched thin even then; I can't imagine how they're doing it now, understaffed and with antiquated equipment. States have not kept this system nourished, and the federal government hasn't helped very much.

Second, I worry about some of the issues that we all care about around equity. When businesses bring people back, it would be horrible if whole demographic groups are let go and never come back. The tech industry is a sector that I hope comes back as vibrant as it was becoming before the pandemic. If we lose those new employees from the past three years, that's where all the diversity was. Those companies were just starting to diversify their workforce.

Finally, I would say this pandemic puts a real light on the healthcare discrepancies we have in our systems. I hope we now see health care as an issue interwoven around work and for the betterment of our society and the viability of business, even if we don’t care enough about the individual social justice of it. We are putting businesses in danger. As we come back, who knows what it's going to look like? We need to make sure that every American has access to health insurance. 

In that regard, Congress has passed some bills but is grappling with some appropriations. What should they be addressing this fourth time around, related to workforce and the comeback?

Jane Oates: First of all, I applaud Congress and the administration for getting something passed—but I think there are certain things that are missing. We have to make sure we're getting those resources to the populations that need short-term cash payments now. On the business level, we've all read that the amount put in to keep small businesses afloat hasn't been sufficient.

There's a bill moving to get some more money out, and I hope we're much more sensitive to giving money to the non-usual players in the big-banking industries. Nothing against the big banks, but there are many small businesses that bank through community banks that weren't able to get a share of funding, and some of them got no money at all. We should be making sure that money equally goes to community banks that serve small businesses—particularly women-owned and minority-owned businesses—to make sure those businesses come back after this downturn. 

TPR spoke to UC Regent Chair John A. Pérez who shared how the university is beginning to address the immediate challenges of transitioning to distance learning and the fiscal challenges ahead for the campus-oriented institution.  Speak to how this move to distance learning impacts the available programs for skills training that you just suggested might be a positive outcome of COVID-19? 

Art Bilger: One of the things that got me into Working Nation, one of the legs on the stool, was in 2002 when Mike Milken invited me to invest in an online education company that he, his brother, and Larry Ellison of Oracle were funding. Bill Bennett, the former Secretary of Education, and Ron Packard were the founders.

Mike already knew I was deep into the digital platform world, courtesy of Akamai Technologies, and I was already thinking about how my kids were going to the finest private schools in LA. How do you deliver that education to kids 5 miles, 10 miles, or 500 miles away? Mike asked me if I'd invest in the company. I had no idea if I'd make any money, but I said yes, only if I could go on the board and executive committee because I want to learn as much as possible. I stayed involved for six years until we filed to go public.

That has been a primary area of investment for me, not just in K-12 education, but in the whole online education area. It was expanding dramatically, even before disease overtook us a month and a half ago. It was accelerating quite a bit—and much of it not so much for teaching people the ABCs—but also the use of technology to help reskill people in the workforce. Again, we could probably do a good job with young people during their academic years if we gear up a bit, but to get that 48-year-old back into a classroom is a very difficult thing. Technology solutions are critical.

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Jane, elaborate on what WorkingNation is learning relating to workforce solutions that might be put to use in this unusual circumstance of pandemic today? 

Jane Oates: There have been some pretty terrific research studies done on what works. We've seen some examples of that with the apprenticeship model as its expanded outside of its comfort homes of construction and manufacturing, going into insurance and white-collar jobs. But, I think that this is the time when other solutions need to come to the forefront. We've seen great solutions, like the Year Up gap year, providing funding for students to learn for six months at a community college to continue their academics but also complete a six-month paid internship with a corporate partner.

We need to go back to on-the-job training. Any kind of paid experience where people are learning skills as they're moving up a career pathway is going to be the way out of this nightmare. Sometimes there isn't one big employer in a community who's going to be the panacea. It's a number of small employers, and those small employers may hire two or four people, but coming together in sectoral partnerships, you can create an education program that meets their needs. 

What are you seeing in terms of the reliance and use of artificial intelligence and how it’s changing the workplace?

Art Bilger: One area of artificial intelligence is the whole area of data and analytics. I have been a firm believer—and this goes way back even before WorkingNation—in the idea that within 10 or 15 years, data and analytics will drive many aspects of companies, nonprofits, and government in so many ways.

A marketing department of ten will become the marketing department of two, and those eight jobs that are disappearing are terrific white collar, middle and upper-middle class jobs in LA, Dallas, Detroit, or anywhere across this country. At the same time, there is a massive vacuum of people who have knowledge about data and analytics; it may be the fastest growing job area in this country.

Data analytics jobs are not just for MIT data scientists or Wharton School grads, they're really about people at all ends of the spectrum who know what questions to ask and how to interpret the data. If you walk out of a good data analytics program from a four-year college or maybe even a junior college with a major in data and analytics, you walk into a six-figure job right away in today's world.

Economic development enterprises—public and private—are right now having board meetings thinking about what their new role should be given the challenges. Do you have some advice and counsel for those cities around the country for how they should be reorienting and positioning themselves for the post-pandemic triage?

Art Bilger: I do think we are going to have to much more aggressively think about learning outside of the classroom, and we've seen it done quite successfully. At WorkingNation, we’ve done a number of stories about community colleges and what they have been able to do—particularly those who have engaged with companies and have a significant amount of employment orientation to it.

In a WorkingNation executive committee call recently about 12 very key people from around the country from different backgrounds came together. One of the things that was tossed out in that conversation was how are we going to rethink globalization from an economic standpoint.

One of our boardmembers, who is very much involved in the healthcare industry, firmly believes that industry is going to rethink how and where products are produced, and that far more production will happen in the United States, to lessen reliance on China or other parties in specialized areas of manufacturing, with health care being probably one of the most important. It was interesting to hear the concept of bringing manufacturing jobs back. Again, the skill levels will have to change, and so we're still back at that same question: how do we skill the workforce? 

Jane Oates: I think rebuilding the robust nature of the domestic supply chains across industries is one of the ways we get everybody back to work. Yes, manufacturing; yes, masks, gowns, and ventilators. In early March, Procter and Gamble put out a list of 200 personal care products that they thought would be in high demand but in incredibly short supply. You go to the grocery store today, and you can't get toilet paper or paper towels; our paper industry has gone away.

As Art has taught all of us to believe at WorkingNation, all solutions are local. These mayors and regional economic development groups—like how LAEDC’s Bill Allen bringing electric engine production into the LA area by sheer force of will—want to be able to make some percentage of our supply chain domestically, both for the jobs and for the security. We're seeing both of those weaknesses right now. 

Jane, if Mayor Garcetti or another mayor told you to leave WorkingNation to be their economic, labor and workforce advisor, what would you prioritize? With the pandemic’s impact on the economy like nothing we've seen before, what’s your outlook for a reopening of the economy given the circumstances of today?

Jane Oates: I’d certainly prioritize getting businesses back up and running. They would be my first priority because we can't worry about workers until the businesses are back. Then I would worry that we don't lose the momentum with underrepresented populations. We've done so much great work—and WorkingNation has documented some of it—on getting better diversity and inclusion measures; on opportunities for youth; on ex-offenders. I hope we don't lose sight of that. First, let's get the businesses open and moving again, and second, let's not lose our resolve to have a more inclusive, more diverse workforce.

 Both sector and geography are going to play a critical role in how we get back to work. I don't think that we're going to reopen the country on a Monday or that everybody's going to come back at the same time. I think it's going to be in waves, and I'm not quite sure what those waves will be. Clearly, in the entertainment space, a sports team can't put a game back on tomorrow; there's weeks of preparation that go into that. It’s the same in the entertainment industry, travel and tourism, restaurants, and retail.

As people begin to figure out their strategy for reopening, they should be thinking of their strategy for bringing their workers back and reskilling them before they actually put them back on the floor. What impact has e-commerce had on grocery stores? I don't know. It may very well be that they need three times the workforce they had in online orders and pickups tomorrow than they did before this. People may really have come to love Grubhub, so restaurants may have to completely retool their current staff to deal with more online ordering and delivery.

We're going to have to wait and see, and we're going to learn a lot as New York, LA and these big enterprises come back on. We're going to learn what industries are ready to come back fastest, how they bring their staff back, and what the new skills are that they may have to provide for their staff members in order to meet the new and emerging trends in that industry.

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© 2020 The Planning Report | David Abel, Publisher, ABL, Inc.