COVID-19 and the Future of Work
Chike Aguh, inaugural head of economic mobility pathways at the Education Design Lab, discusses how the COVID-19 pandemic is affecting the changing nature of employment and trends in the U.S. workforce.
FASKIANOS: Good afternoon to all of you and welcome to the Council on Foreign Relations State and Local Officials Webinar. I'm Irina Faskianos, vice president for the National Program and Outreach here at CFR. We're delighted to have participants from forty states with us today. Thank you for taking the time to join us for this discussion, which is on the record.
As you know, CFR is an independent and non-partisan membership organization, think tank and publisher focusing on US foreign policy. Through our State and Local Officials Initiative, we serve as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of policy topics. CFR is also the publisher of Foreign Affairs magazine. We're pleased to have Chike Aguh with us today. We previously shared his bio with you so I will just give you a few highlights on his distinguished career. Chike Aguh works across sectors to create a future of work for all. He's the inaugural head of economic mobility pathways at the Education Design Lab, where he leads a community college growth engine fund, an effort turning community colleges into bridges to careers in high growth fields. He is also a technology and human rights fellow at the Harvard Carr Center for Human Rights Policy, where he is writing a book on the future of work and racial inequity. And previously, he was senior principal and future work lead at the McChrystal Group. He also served as a member of the Council on Foreign Relations’ Future of Work Task Force, a bipartisan group. They came out with a report with policy recommendations. So Chike, thank you very much for being with us today. I thought you could get started by sharing your thinking about how the COVID-19 pandemic is affecting the nature of employment and trends in the U.S. workforce.
AGUH: First of all, good afternoon, and thank you to the Council for having me. Thank you to everyone who's on this call. The future of work is an issue that hits kind of both axes of the Eisenhower matrix. It is urgent and it is important, especially given the health outcomes and impacts of COVID. We have new jobs we've never had before. In terms of the employment crisis, obviously 35 million to 40 million of our fellow Americans are unemployed. And also we're having to contend now with inequities across a number of axes that have been here for a long time that really now come to a head in this time of COVID-19. What I want to do is I want to quickly--it’s important to know the impact on the future of work and employment right now--let’s figure out where we were before COVID hit. Let's talk about what COVID has changed and what it hasn't. And let's talk about some opportunities, and then we really want to throw it open for a conversation.
So when we think about the future of work, I always lay out two very concrete examples. One, for example, is autonomous vehicles, which are going to be on the road en masse between 2030 and 2040, likely starting with commercial trucking and public transit. And if you look at the projections, it'll add almost a trillion dollars in economic productivity to the U.S. GDP. The flipside of that is that driving a vehicle is also the most commonly held profession by an American man. And so between 2030 and 2040, a huge swath of our population, more people than the amount of school teachers that we have, will be out of work. And so the question is, what do we do about that, about those jobs that technology obviates entirely?
Secondly, you have a slightly different nuance of this problem. An example I always use here is a loan officer. If I think about when many of us were much younger, or during our parents’ time a loan officer was a person you saw when you went to the bank, you presented your documents, and they made a call about whether you qualified for a loan or not. Today, that's not what a loan officer does. The person who actually makes the call about whether you get that loan is a computer algorithm. That is, a multivariate regression that takes into account a ton of different factors. And the result out of that is more accurate than a human being. Now the job of the loan officer is front end recruitment, getting you in the door, and then also what we call account management on the back end, make sure that you're happy and do additional loans with the bank.
So the future of work before COVID had two dual challenges. You had a huge part of American jobs that may be obviated entirely by technology because they won't be needed. And then you have a huge other amount of jobs are going to be irrevocably changed so quickly that workers may not be able to keep up. That is the challenge of future work. And that was where we were before COVID. When we think about the COVID challenges, there are those two things have been accelerated.
So again, because now we cannot do things in person on site, the way that we used to have the need and the reliance on technology has only increased. We are seeing things done via technology virtually that we never thought of before, but they're now happening. And so the question is, what are we going to do? What do we do about those jobs that even more quickly being obviated, and then what are the jobs that are being trained? I'll use an example for some folks who may be on the call. As we think about something as simple as education, again, I mentioned my career as a school teacher in New York City, that entire profession is being changed. We still need teachers, but it's an entirely different skill set. How do you teach, facilitate, virtually? How do you make sure students are still engaged? How do you make sure that you're able to give and collect work, things like that things that we've never had to think about before? COVID has only accelerated those trends.
When we wrote our report on the future of work when I was part of the Task Force two years ago (go to CFR.org/the-work-ahead), you can still pull down the report and see a lot of our recommendations. We had really four key questions around the future of work that I still think are super important and plausible here that show the challenge and the opportunity.
First question, how do we make sure that there actually is work? How do we make sure that we're creating enough jobs for our people? How do you actually allow people to make the most of themselves and change the life of their families? And frankly, just subsist from day to day? Number two, how do we make sure our people have the capabilities and skills to do that work, not just the technical skills, but frankly, what some people call the twenty-first century skills, and I like to call the human skills of leadership, communication, things like that. That'll make them viable in this new economy doing the things that machines can't do. Thirdly, how do we make sure that the work that needs to be done and the people who need work find each other? We all have examples in our local markets of folks who are the people who needed it, who simply were not able to find each other because markets are inefficient. And also, at times, they're biased.
Again, we have one example that I always love is that if you look at two thirds of American administrative assistants today, they don't have a bachelor's degree. But if you look at 100% of job postings for administrative assistant, they all require a bachelor's degree. So again, this is where we get a mismatch keeping worker and work from finding each other. And then lastly, how do you make sure that we have a system of supports that support a worker and a business along the way to make sure that we get to where we need to. This is everything from unemployment insurance, which should be a lot easier to access than frankly it is in many jurisdictions, to accounts to pay for worker reskilling and worker retraining. And so those are really four questions. And so when we look at how COVID has accelerated a lot of trends that we talked about beforehand, if anything it’s that we actually now have to be able to, we have to deal with these issues on a quicker timeframe than we would have before. So let's look at potentially what are some of the opportunities. If we look at COVID.--again, we have seen a huge amount of unemployment. I'll say in my home state of Maryland, if you look at April 2020 versus January 2020. And you look at the amount of small businesses, we were down 45% of the amount small businesses opened than we were in January. But what we've also seen, frankly, because of the situation that we're in, we've seen a demand for new types of jobs we never saw before. None of us knew what contact tracing was six months ago. But now depending on where you are in city of a place like Baltimore City, you can make $35,000 or $50,000 doing contact tracing, because we need it so desperately. Similarly, when we look at the Allied Health fields, we have much shorter personnel for the last three or four months. And that may be a reality for that's with us for the foreseeable future. So why don't take advantage of the new jobs that are being created? And make sure that people are ready for them in places and quickly? Secondly, how do we take advantage of now the ubiquity of technology to give people more access to more opportunities, more and more, we are seeing the job and the location of the worker not being tied together. We've seen that a lot more things can be done virtually than we ever thought before. How do we take advantage of that? And additionally, how do we make sure on the skill side that we do the same this is why the conversation on things like internet and broadband access is critical. Because literally for low income communities, for those who have been left out for a long time, that's going to be their lifeline to many of the jobs and the skills they need to be successful, how do we take advantage of that right now? And then lastly, I think it is more of a higher level concern. I think it's important when CFR President Richard Haass launched this Future of Work Task Force three years ago now, actually, this was when we launched, someone asked him, why does a foreign policy think tank care about this? And what he said was, he said, if we don't get the future of work, right, it's not just going to impact our economy domestically, it's going to impact the state of political discourse here domestically, which will affect our ability to be a strong nation abroad. And so when we think about the future of work, how do we lift our eyes to the horizon a little bit and think up, not just how to make sure we put people back to work, but how do we build back in a much better way than we did before? And how do we make sure we don't simply go back to what we had, but build something better that the American people deserve and all the people in their jurisdictions deserve, and I think it's a chance not just to do what we've done, but to do what we should. And so I'm really eager to have this conversation with you happy to dive into any of the points that I brought up, and Irina, throw it back to you.
FASKIANOS: Great, thank you so much. So now it's to all of you for questions and comments. Please also share best practices as we typically do in this forum. To ask a question, you can click on the Participants icon and raise your hand, or else if you're on a tablet, click on the ‘More’ button and raise your hand you'll see the ‘Raise Your Hand’ in there. So let's see if we have any questions or comments queueing up. People are being quiet so far.
FASKIANOS: I wanted to just dig into, you know, you talked about automation and workers being displaced by technology. So how are we going to, you know, retool those people, reskill those people when and COVID—ostensibly, you know, probably has accelerated it more than we ever thought it. You know, it's here before we knew it.
AGUH: Absolutely. And so, in the body of work that I lead now, I'll say a couple of things. Reskill and upskill. Those are two different things. Those folks, clearly folks who have been displaced recently, and also those who, frankly, who were part time getting into the job market for a long period of time, a couple of things. One, we have to really rethink how we do workforce development, job training, I think the governor of Rhode Island used this phrase once and I stole it from her. But one of the phrases that we hear a lot and that she hears a lot is you need to stop using the “train and pray” approach. And what I mean by that is I train people and I pray that there's a job for them. Well we need to do is tie the jobs that were trained for directly to employer demand. And we need to be pushing employers to number one, be very precise about the skills that they say that they need. And secondly, we need to push them to make sure that once people have those skills, it's easy for them to make it into the, into the HR office, into the interview office and into the job. We don't make that as easy as we should write. Again, I always use that example of the administrative assistant. Most administrative assistants don't have a college degree but most postings require one. Why? And again, that's us as a system, having to be more thoughtful than we then we then we ever have. And so when we need to train for demand, and when we're training, we need to be trading not simply for a credential awarded, which is super important, but we need to be training with the end of getting that person into work. I have been as extreme as saying I think no publicly funded job training should be done unless there is a job at the end of it because particularly for someone who's been out of work, to ask them to go through job training without that promise, or at least the high level of certainty is too big a risk for them. So we've got to make sure that that training is effective and tied to employer demand. That's one, I think, two, we know that technology is going to become an even bigger part of the American workforce, we have 32 million Americans who are not comfortable using a computer. And if you look at the amount of those Americans who have access to training to get better, only 10% of them do. And so we know certain skills will be ubiquitous across jobs with all jobs, not technology, jobs, how are we training across our entire workforce for basic digital literacy, everything from turning your computer on and using Microsoft Office, all the way to high level things like coding AI and machine learning, quantum--just wishes down the pike. The third thing that I would say is when we think about workforce development, many jurisdictions think about workforce development as something that happens once someone leaves high school. I think those think those who have really been in the space know that these are things that we should be talking about when children are young. So when we see things like the computer science for all movement in in K-12, the opportunity for high school students to get externships while they're still students so that they can understand what it's like to be in the workforce, as well as actually getting connections that can help them in their career. That's really critical. So one, how do we make sure we are tying training to demand. Two, how do we make sure we’re giving every worker digital skills across portfolios so that they can use them in any job? And thirdly, how do we make sure that we're starting those things young? So that again, when people come out of high school, they are already developed for our workforce?
FASKIANOS: Great. Let's go to Ray McDonald, who's a city council member in Conroe, Texas, so please accept the unmute prompt before asking your question.
Q: Some great points you're making. I love what you're bringing up there. As we go back from COVID, struggling with people, being afraid of people working next to people, you know, how does this affect the way to move forward? I love what you said. Not looking back to what we had, but looking forward to what we know, there's something new, I wanted you to kind of unpack that a little bit. You kind of think it might be some of those things we're looking at.
AGUH: Yeah. And so, Ray, I lost a little bit of you, but I think what I heard you asked was basically, how will the workforce change going forward when for potentially the foreseeable future? It'll be hard, and people may be afraid of working next in close proximity to other people, or, or serving other people in close proximity. How does that--how are we going to think about that? So I think there's a couple ways one It means we're going to be more dependent upon technology, we already have seen that I'm sure all of us had never really used Zoom before six months ago. And now we've all gotten probably pretty good at it. Not everyone has the tools to do that. So again, going back to that digital skills piece, we've got to make sure that those are ubiquitous, to be honest, as quickly--if we're doing job trading, let's say doing shopping to be a pipe fitter part of using zoom should be part of that. Because again, whatever you're doing these virtual technologies, particularly those that are used for communication, like Zoom, like Citrix, is going to be really, really critical. I think that's number one. I think number two, what we're also seeing is this is a place where I think jurisdictions are going to need to be really forward thinking, what are the job opportunities that are being created because of this very, very strange environment? One thing that you're seeing right now, particularly as folks are trying to figure out what to do about school is they're seeing right now a bunch of is actually happening in my household. How can we come up with safe ways for kids to enter interact with other kids, whether it's for my son's story, he also started three year old soccer and it didn't quite work out. But you're finding right now seeing popping up across the country, matching services to match parents with other parents who can get their kids together in a safe ways so that they can have playdates. Similarly, you're sitting at a higher level, hey, how do we come up with safe ways to do education without dealing with potentially having my kid go back to a school? You're seeing I use those as examples, not saying whether they're good or bad, but what it shows is the thing about Americans during times of adversity, Americans innovate. So the question is, as jurisdiction probably sits on top of those innovations, figure out how to scale them, accelerate them, and also help support them. I'll use an example from my home state of Maryland, again, contact tracing, we basically created a contact tracing core across all of our counties where literally we have people who are unemployed, and we are re-employing them right now, at a wage of between $35,000 and $40,000 per year to go to contract racing, we're kind of probably, I'd say the top court file in terms of reinfection rates in cases. But we basically had people who needed work, found a need, trained them and got them back into the workforce and good for the state, but also be able to put food on their table. And so what I was saying is one, how do we basically get those digital skill lists? Two, how do we take advantage of those new innovations that are coming up? And then three, how do we as cities accelerate to create opportunities that solve a problem that we have in the public health perspective, but also solve an employment problem that we have in our jurisdiction?
FASKIANOS: Great, thank you. We have a question from William Tran. How do we adequately provide internet access to rural areas around the country? And do you see that there is a way to dramatically update infrastructure in the next years because obviously, you know, we're having this rural-urban divide. And if Zoom is the way of the future if people can't access the internet, it’s not equitable.
AGUH: Now, and I'll add a little bit on that question, which is not just a suburban and rural issue. This is an urban and suburban issue. If you actually look at the data, the majority of people in this country who are unconnected live in urban and suburban communities. The sources of that digital divide are different in different places for urban and suburban communities, usually, because the options available are too expensive for folks who don't have means, whereas in rural communities, it's the cost issue and the fact that may not be an option available to them. So I will say absolutely, I see this getting better in the next few years one because I think school is what's done it. I think those of us who have kids who had to be home with them and figure out how to help them learn on Zoom, we realized that frankly, if you if your kids don't have access to internet connection, they don't have access to education. In my home state of Maryland, we aren't going back to school in person before February 1. And in fact, it is possible that that date may get pushed back even further. So I think the focus on it, particularly in the education sense, has created a need and an urgency more than I've ever seen nationally, on these issues. The question for rural communities is will we have the investment for rural communities, you generally need an investment of fiber infrastructure backhaul, I won't get into all the technical pieces to make that happen. And the thing that I'm really looking to see is, in the meantime, until we get those things, are there stopgap measures? We have seen substitute solutions, like for example, can we give out connected devices meaning I basically have a tablet with a wireless card in it where it has a network like a phone, I can use it like a tablet, that's one very tactical example. But I think this will get better. It has to because if you don't get people that access, they don't have access to education. I also tell people from employment point of view, I ask people, when was the last time you filled out a job application on paper? I usually don't get many hands when I ask that question. So I think the answer is yes. I think school has driven the issue. And the question is for rural communities, will we see the investment? Will we see the stopgap solutions while we make those investments?
FASKIANOS: Great. Next question will go to Signe Friedrichs.
Q: Thank you. I'm a town council member in Herndon, Virginia. And I have a question that deals with kind of using other countries ideas maybe to help us and, I don't know if this is antiquated or not. But when I was a student, I studied German. And when I spent some time in Germany, part of our curriculum was to go around to other schools and find out how the Gymnasium worked and how the different kinds of schools worked. And Germany seemed to have a system where they figured out how many people they were going to need to do what job and specifically tasked those schools with training people for that job. And it doesn't seem like we do that here. I may be wrong about that. But there was a direct pipeline, basically, they were saying, we're not going to waste any time here. We need six welders, we need twenty-five plumbers, we need someone who can discuss Descartes. And that's what they did. I don't know how successful it was. It seemed very successful at the time and I know because we have a federal form of government perhaps that would need to be something that the state did rather than the overall government. But do you have any thoughts on that matter? I don't know if this is very antiquated or what?
AGUH: No, I mean, I'll say if you look at Germany right now, from a comparison of COVID infection rates, but also their, their economic situation, they're in a much better place than we are. Someone once told me that the U.S. has an unemployment system. The Germans have a reemployment system. They have a system built to get people to work and back into work if they fall out of it. There are a couple of reasons for that. One, they have a much, much more centralized form of government. So again, that was a national decision versus a local decision. That one that does complicate these efforts. You know, we have, I believe 14,000 school districts, and as an example, close to 100,000 schools, all of them managed by different school boards and things like that which you all as local officials understand these things unbelievably well, but let's take apart what you said. Someone somewhere had some clear idea of what demand was from the job market. Number one. So in that case it was the government, but it could be anybody. Two, they had a system of creating people with those skills to take those jobs. Again, in their case of schools, but it could be anyone for us. So the question is, how do we make those two capacities ubiquitous? And one of things that makes it possible is that frankly, government just listens to businesses when they say, here's what I think we're going to need. And not just saying, I'm going to need welders, but saying, a good welder at my company can do these five things. Whenever I speak to employers, I am always pushing them to be super precise in what they need. Because at times I find employers are not as precise as they should be. Looking at most jobs, they comprise of 32 separate tests.. I always ask employers, can you name those 32 separate tests so that when you're hiring, you can hire not for necessarily a credential, but what makes a good candidate for that job. And then number two, the schools are responding very, very quickly in real time to produce those things. When I ask employers how quickly between when you tell me you, you have a job to when it's filled, is too slow? I generally hear 90 to 180 days, and really closer to 90 days. In Germany, they have a system that can pivot super quickly, to create to create those skills. And I'll be honest, in the states, we don't have anything that can move that quickly, whether that be at the K-12 level or in the higher ed space. So if I didn't say what we need to do, how do we have a clear idea of demand locally, statewide, nationally? Secondly, how do we have a system at the K-12 level but I'd also say in higher ed, I spend a lot of time in the community college space that moves just as quickly so that we can fill demand. The last thing I'll say and this is an important thing, we have to train not just for a job, because we know jobs are going to change because of changing technology, but also careers. And so the question is not when I train you, not simply am I helping you for this job, you're going to get, but hopefully we will also be giving you capacities that will help you in jobs two, three, and four down your career. That's the best kind of training. And again, that's going to require a little bit more than beyond what you asked. But those are my initial thoughts, and what I feel the Germans are generally doing well, and right now it's rebalancing to their benefit, and we're suffering because we don't have some of those capacities now.
Q: I really appreciate what you said it. It brought to mind one other question that I wanted to mention. I have a liberal arts education. I'm in my late 50s. That was what we all did when we were when we were teenagers. But one of the things that they that they constantly reinforced to us was you have to prepare yourself for change all the time, you have to know that the skill you have now isn't the skill you're going to need. So how do you do that throughout your life--or how do we, as a government help people, if that’s what we want to do, reimagine themselves every (I don’t think every 90 days like you suggested) but every five or so years, our jobs are going to be very different. How do we keep sane and retrain ourselves at the same time while we're doing our job and raising our families and all that stuff? So that was just one of the things that your thoughts raised in my mind.
AGUH: No, absolutely. I think, again, I've heard this concept. We talked about resilience in terms of disaster recovery. But when we think about the economy, we want workers who are resilient not simply where they have the skills that they need to be successful now. We want to have taught the capacity to learn new skills and new capacities over the course of your career. So I'll say a couple things. One, I've started my career over. I taught second grade in Brooklyn, New York, when I first started. We spend a lot of time in the K-12 system teaching that discrete bodies of knowledge. That’s very important. No question. What I'd argue is more important is –because right now I can look up anything I want on Google. And I can know when the French Revolution started. Or I can go on my calculator and calculate this. What's more important is teaching critical thinking, problem solving leadership, communication, things that machines can't do, that no matter what job you're in, will be super effective. When I talk to employers, they generally tell me I can train anyone on technical skills that I need in 90 to 100 days, what I need are those things that machines can't do. Give me someone with those skills, and I’ll figure out the rest. That's one. I think, two, as we think as this is a policy recommendation, we put it into our report. We need a way for Americans to finance their reskilling across their career. Right now, if I want to, for example, learn full stack engineering, I need to drop out. If I have a family I have to figure out how to pay my rent or mortgage and buy my groceries and do ten or eleven hours a day to learn that that new skill, we have no system of financing for that, Germany does. So how do we think about that for people who need new work? I'll use another example. If you think about a four year degree, we have a system of finances that has lots of problems that I can go into, but we have a system where, if you don't have the money for that right now, you can borrow. We have no system like that that's analogous for short term skill training that can teach you a capacity to get you into the next step in your career. We've had thoughts about basically how do we basically make those types of funds available for that, but we're still not there. So I'd say two things. One, how do we make sure that K-12 education focuses on those human skills that can't be done by machine, as well as discrete bodies of knowledge. It shouldn't be either or, you need to put them together. Then secondly, we need a way for Americans to pay for and sustain themselves while they get new skills, so they can get back into the workforce.
FASKIANOS: So, Sarah Soroui from the Boston Mayor's Office raises the point that we need better data on work from home trends to analyze what's happening in the U.S, workforce. Do you have any recommendations on sources for that information? Is it being collected and any other perspectives to add?
AGUH: Sure, and in my prior place of work we did a lot of work with Mayor Walsh, so it's good to see someone from Boston. I lived in the Boston area for about seven years of my life. I'll say a couple of things. So there are a number of sources that I can name, sources like Burning Glass, MC, and actually the regional Federal Reserve Banks do amazing work. The Philadelphia Reserve Bank actually did a great study just recently, not just on trends, but also what are the careers that lead to other careers? What are the skills that build on themselves? And so actually, this report just came out, I want to say in July, so I really encourage folks to take a look. But what I'll say here is, while macro trends are helpful, I do believe they are, but you need to have that layer of data. What I find is at times, and I remember from my own days in government, you use the data to, in some ways, avoid the conversation with the people who have the jobs, who are the employers, whether they be small businesses, large businesses. And so the best approach is having the macro data, but then also having that regular contact with employers and force employers to be specific and can be committing to hiring for what they need in a quick time frame. That will always give you the best projection of what you need. You know, I'm in Prince George's County here in Maryland. What did MGM say in terms of how many groundskeepers they're going to hire or how many accountants they're going to fire? What did Marriott say in terms of how many people they need to do sales, things like that? That's always good. I find that bottom up data is just as important as the top down data.
FASKIANOS: Thank you. And I'm waiting to see if we have other questions or comments. I did want to talk to you about your work with community colleges. What are the primary concerns you're finding about education now during the pandemic? I know a lot of people are thinking and stressing, quite frankly, about the reopening of K-12 schools and universities that are starting. I mean, we saw the cases in Georgia. And I know that there has been a patchwork of some schools, I think you said in Maryland that are going to be remote through February and perhaps longer, and New York has announced that schools can reopen as long as they are following CDC guidelines, etc.
AGUH: Absolutely, you know, I lead this community college growth engine fund. And so first there's the safety concern, most of the schools that we're working with, as well as higher ed broadly is doing some type of hybrid instruction. Very few of them are doing full in-person instruction back in the fall or are worried about the safety of their students and the surrounding communities. But the second thing, which I see has been a big pain point, is two things. One is very practical, which is because many of these schools are going to some of the virtual instruction, they're seeing many students for reasons that are personal to them, saying I might want to defer a year. I may delay my decision to go into higher education. Not bad. The question, the challenge, is that that's 25, 30, or 40%, or even more of the incoming class that you're expecting that that is a huge revenue impact. And so every school is dealing with that. And one can imagine as they're making these decisions, that's probably in the back of their minds. They want to make sure that they’re around in the fall of 2021 to make sure they can continue to serve students. So number one, the revenue business model impact of having a number of their students defer entry. Number two is the reengineering of how they deliver their instruction. So again, let's use workforce development. Let's say you're doing an apprenticeship around construction. For example, you're used to doing that in person onsite, side by side. That's the nature of apprenticeship as we've understood it for thousands of years. Now, you've got to figure out how you do that virtually. And that is a pedagogical challenge. As a teacher, I'll say, very few teachers are taught, whether it be at the higher ed level or the K-12 level, how to do that intuitively. They have to learn along the way. So those are the two big pieces of heartburn that I have seen felt from the higher ed students that we've worked with. I'll say one thing that I find heartening, that is the opportunity that they see is, there is such a need in terms of people who need to work and work that needs to get done, that community colleges are seeing themselves as a bridge. The community college growth engine fund, at my place of work, we're basically trying to put a structure on that and give support so that they can build those bridges. So they see an opportunity, but the small concerns and the kind of cost concerns and changes that are coming definitely give heartburn during this time of COVID.
FASKIANOS: So I know one of the recommendations in the Task Force was the licensing requirements, having more portability for licenses to cross state lines. Are you seeing now with COVID that states are lifting those --making it easier? Not that you know, people can travel but in any case.
AGUH: I think the honest answer at least from what I’ve seen from local and state jurisdictions is that regardless of party or geography, I think the question is bandwidth. You have to figure out how you're going to pass the law because maybe your state legislature can’t meet and pass the regulation, or because the department of labor maybe can't meet. And also you have, of course, school safety, health, things like that. So I find people agree with this issue. But then just the bandwidth concern. That's I think, number one, I think number two adjacent to that, and I wrote about this particularly in the Task Force Report is we do have some states where there are barriers to licensure that don't quite make sense. So for example, there are still a number of states where usually there's some type of kind of governing body at the state level that says who can get a credential who can't for things like plumbing, being an electrician, things like that. And at times, things like a felony record, or a felony on your record, can be a barrier to you getting that licensure, even though you have paid your debt to society. You want to be an economically productive member, but your prior record stands in the way. And so I think at this point, the big question is how do we remove all barriers to licensure, whether they be geography, whether they be potential past record, things that can't be controlled, that don't bear on people's ability, because particularly in high growth fields that we need, we can afford to have these types of barriers.
FASKIANOS: I believe John had another comment or question, how do we assist college students who have not received financial assistance through COVID-19 relief packages, while also helping them to continue their college education and get jobs in a new job market?
AGUH: This is a great question. This is, I think, a million dollar question. I think one of the things, whatever one's thoughts are on all the patches that have passed Congress. I mean, one thing that has been tough is direct aid to individuals, particularly students, particularly those who have not necessarily started their economic turnings, yet. It's a place I think, that we've found ourselves wanting, and so don't have answers. But I think some outcomes that I think we do need to look for are one: how do we get some of the students into some of the work that needs to get done? We have seen places like I use again my home state city of Baltimore, or places like Massachusetts who basically said for folks who are not in work or who have been displaced from their college, let's put you into contact tracing. I use that as an example. But there are more types of work like that I think we can create fine. And again, it serves a public purpose, but also an economic purpose for that individual. I think number two, a really big question is how do we this is probably a federal issue, but how do we make sure that students who have been displaced in no fault around do the COVID, can still get some access to the aid they would have access otherwise? Whether that be Pell student, hopefully reasonable student loans, things like that. So those are some things that we can do, but I'll be honest, it's a knotty problem that we've just not quite figured out. And you know, it's left to me, this is something that we would have figured out during, when we were figuring out our rescue package is called earlier in the year than we could have taken care of.
FASKIANOS: So I think, Chike, state and local officials are facing a lot of challenges that start with a budget as they're trying to prepare and deal with this pandemic and safely reopening schools and whatnot. How would you prioritize what needs to happen in order to tackle all the different things and there are so many issues that have been surface that were there but have become really, you know, are in our face from health to clean energy to, you know, the list can go on, education.
AGUH: I am very loath to give a mayor or governor advice on how they should prioritize, but let me talk about this area of employment and skill. So let me talk about that. I think for every official that I talked to, they generally have roughly two or three priorities. One is, of course, keeping people healthy and safe. Second means getting people back to work. And so when we think about that, I would really go back to where I began, which is, as much devastation as we've seen in the economy, there are places that are still stable and growing. And the question is, how do we ascertain exactly what those jobs are the skills that are needed from their employers? And then, how are we working with any institution we can: K-12, higher ed, community based organizations, institutions that we've not even thought of yet and support them and train people for those jobs? That's number one. How do we get that skill in demand? I would say that it's a huge, huge need. That's number one. I think number two, there is work in the country that can now be done in a different location. So again, take something like, if you use Google Map things like geo tagging, where basically people are looking at images, certain things that can be done from anywhere. If I were mayor of a city, I'd be looking for what types of jobs are like that? How do I basically connect those to people who are unemployed, and literally, if I need to make sure that all of them have an internet connection and a computer, I'm going to do it so they can do that work. That's how much I paid for the internet and computer, it's less than then being on unemployment or other public assistance benefits, or people potentially getting involved in illicit activity. So how do we basically team agile work that may not be where I am, but that my people can do? I think lastly, all the public officials who are on this call, I know have long stories about the small businesses that were not helped and did not get enough help during the whole PPP crisis, particularly those that were minority, women-owned, people who weren't big. And so how do we think about small business relief? A number of proposals have been put out there. But thinking about even if it's some type of debt vehicle, meaning someone has to take out a low interest loan, how do we keep as many of those businesses open as we can, because what we saw from the great recession was that is far easier to as far less likely to keep someone in a job than they lose that joband you have to get them back in the job market. So I would say one, how do I treat both of the jobs that I have running in my local jurisdiction as quickly as I can to how do I train them for jobs that may not be in my jurisdiction, but can be done virtually? Thirdly, for the small business particularly that I have, how do I keep them open so that they can keep employing people because it's better to have those folks employed, keep that business open, whether it be a hardware store, a barber shop, dry cleaner, and have them on the beat, the unemployment rolls and then years later, potentially pull them back into the market which we know is economically difficult.
FASKIANOS: Are there some sectors that you see at risk of not having enough people to fill those jobs?
AGUH: I mean, if you if I look at still, in some ways we've seen some of these shortages expand in the Allied Health fields, everything from doctors, nurses, phlebotomist, you still particularly because we're seeing rising healthcare loads, this is differential a little bit throughout the country, but we're still not seeing I'm not seeing the single healthcare writer say I have enough of all those people. That's number one. Number two, in the in the in the technology stack, so whether that be data science, user experience engineer, back-end engineer. There are also a bunch of the middle skilled jobs, things like database security, cloud infrastructure, things like that. Still not enough of those, and if anything, they need more, because we're relying more on those technologies to run more and more of our society. And anyone who works in cloud, for example, has seen demand dramatically increase because we're relying more on service like Netflix and Amazon, to frankly, make sure we all don't go insane inside of our houses. Now, and for the last four months. So those are places that frankly still had a hard time filling. And I think that if you're lucky enough to either be located near something like that, or you can access that virtually hop on that because we are still hiring. I live in the DC metro area. Amazon is not just still hiring, they are hiring more people. They're hiring at a faster rate than they were before COVID partially because of their success during this crisis. And we can argue about why that is, but there are examples like that in most jurisdictions, and we really want to that local folks jump on that because I think it's going to be critical to making sure that people can sustain themselves during this time.
FASKIANOS: And we have a question from Representative Pamela Anderson from North Dakota.
Q: Thank you. I just have a comment about the small business loans, and (the information) actually came from one of the first of these conferences I listened to. We're very fortunate to have the Bank of North Dakota, our own state bank. But after listening, we have a micro business loan: ten full time equivalents or less, $25,000-no collateral, a little bit of collateral up to $50,000. And our payment plan is 1% for 10 years. So basically, it's, you know, $9 per $1000, I mean. So we're keeping some of our small businesses going, I think, because I listened to one of these first webinars. So and then I also have a question or a comment maybe. I think what COVID has done is, higher paying jobs you can work from home, lower paying you can't, right? So how is that going to change how people think about their careers?
AGUH: Absolutely. On the first point, Bank of North Dakota, is whether people want to public on bank or not. But what you all have done is, I would say absolutely right again, in the state of Maryland, we are down with half the amount of small businesses, relative to January, then relative now than then then to January. And that is a huge, huge concern, because that's where the majority of people work. And what you saw with PPP is if you look at who got loans, who were small businesses, most of them were over 100 people, nothing wrong with those businesses. When you look at businesses that were twenty-five people, ten people, the percentages were infinitesimal, because frankly, they didn't have the banking relationships and the time that goes through the whole process to get those loans. And again, that those are those people are employing a huge part of our workforce. So I think all those schemes that you described make a ton of sense, particularly focused on those small local businesses. The broader concern that you brought up is really important, which is a higher paying jobs, you can work from home but lower paying jobs, potentially, you can't. And so what's interesting is if you look at a lot of jobs that have now been deemed essential, they fit in that category. The folks who stocking shelves at grocery stores, the folks who are working at, you know, certain hospital jobs, public safety workers, things like that. I would argue one thing that COVID has shown is that some of those quote unquote, lower paying jobs, low skilled jobs, are actually quite important. And, you know, when I took economics, things that are important are things you should pay for. And so figuring out how we sustain people who are working those jobs, and also how we keep them safe during which is, again, another big area of controversy, but how do we make sure businesses are keeping their workers safe so that they can do some of that work is really critical, and I think has to be a part of the lexicon of business moving forward, you know, again, you know, this is must have insurance for certain things, businesses have to have certain safety protocols. We know sadly, that pandemic, this may not be the last pandemic that we see. And we've got to make some references are prepared for that. And we as a society have to make sure that we are willing to pay for people who are doing essential work, even though we didn't consider it that before COVID.
FASKIANOS: Thank you. And I'm pleased that our webinars having that kind of webinars are having that kind of impact. So thank you for that. The next question is from Sarah Soroui with the Boston mayor's office.
Q: I just wanted to sort of dovetail off of some of your comments, and I sort of study this stuff, too. I think and just from my work in the mayor's office and the office of workforce development, and then sort of my research work. I mean, it really is in the immediate term. In order for us to really understand what are the work of the few trends, we would really need a much better understanding of how COVID is accelerating digitalization of firms. So with the need to reassure customers that consumer experiences are, you know, compatible with minimal sort of social contact and human interaction, how is this impacting investment in automation and interactive communication and self-serving digital tools. And I think, as you were saying, of this educational inflation across a lot of occupations that we're seeing is kind of a proxy for digital literacy skills and technology skills in a lot of ways. So, and then on the other side of that is, the workforce development field hasn't, in the case of some rural areas, telecommuting or remote work, jobs haven’t really been a major focus. But now, you know, we're going to probably see the expansion of remote work jobs, which will, potentially, have some impact on localities in terms of competition, labor force, labor market competition. But there's on the other side of that, there's obviously a lot of opportunity. So those are, those are two areas that I think are really sort of important to understand as we go forward. And, you know, as we kind of emerge out of this pandemic mode.
AGUH: I agree with everything that you've said, I think, again, we still don't understand enough of what's happening within firms. And I will push and say, I don't know that firms are totally understanding what's happening within themselves right now again, because people are really just again, trying to make it from day to day. I think secondly, though, how we think about what will this workforce look like? I expect, I think most of us seen it, that jobs that people said have to be done from a certain place, you're going to see some loosening of that. And the question is, how do we take advantage of that? And I think what Sarah's speaking to is, and it's particularly a city concern is, oh, well, people not feeling like they need to live in the city anymore because they can be in other places and work far more remotely. I think the question then becomes, okay, from an economics point of view, what other things can I give people that they wouldn't get otherwise? Some of it is social proximity, some of it is amenities, but I think cities particularly, I think, some things to think about because one, how do we deal with the safety concerns of getting something if this happens again when we have that density? That's one, probably a manageable concern but one that that maybe has to be confronted. Secondly, how do we make sure that people still feel a need to be in the city, if, even though they may not need to live there to be successful? I think on the flip side, for your suburbs, for your rural communities, this is potentially an opportunity. You all may be able to provide things the city can’t provide, whether it be some land, being able to see the stars at night, whatever, whatever it is, as long as they can connect. When I think about the city in a place like Tennessee, I think about Chattanooga, Tennessee, they invested in a broadband network, which is world class that has changed their city from an economic and social perspective and created opportunities for their residents that didn't exist otherwise. And now, I imagine Andy Berke who's the mayor there is thinking about how he can position his city as one where people can move to and still work in places like New York and Boston and Philly, and Chicago.
FASKIANOS: Thank you very much. Let's go next to Uche Uwahemu for the next question.
Q: Hi, I’m from a California Assembly Member’s office. So real quick, I just wanted to ask, if you have seen a rise in new startups since the COVID-19 environment and if so, what sector and what area do you see them on the rise? And what are the challenges do you anticipate seeing coming for them?
AGUH: It is a great question and particularly in places like California, I'll be frank, this has been a tough time for startups. And let me say, small business but also startups in particular for a couple of reasons. One, unless you've just raised a huge amount of venture capital, you don't have a big cushion of cash. And so a lot of startups basically saw their customer balance dry out so unless you had the money and the cash to make it through a tough time, you are likely cash strapped and you had to lay people off, or you potentially had to shut your doors. Um, but you have seen again, in very particular places, particular industries, I've seen things in the health field, the education space, as well as the broad kind of virtual communication space, we can have some new startups pipe up, but I would argue, although I haven’t seen the full data on this, so I don't want to quote a statistic that I don't have. My instinct is that startup activity is down a little bit, you know, startups are probably down in this country pretty significantly relative to January. But I think there are a couple of places in the sort of fields that I named, where you will see activity. Um, this is something I frankly do lay at the feet of our incomplete and not robust enough response for small businesses. Again, most startups are not 100 people, not 500 people, they are 10 to 100 people. And things like PPP, which is a great idea, I think I had a positive impact on the economy still did not get to enough of our small and growing businesses, and then layer on top of that led by people from an array of diverse communities. So I actually think when I think about what public policy folks can do, I think it's how do I help these small businesses be successful, and in exchange for their commitment to taking care of their workers, which is, hey, worse if we're supporting you as a state, you've got to keep people on at least the level that you're at right now. And then secondly, which I think is what's coming next? How do we think about helping startups in business more broadly, invest in those workers training and capacity to be more successful? You know, a paper that I'm working on right now. A paper that I'm working on right now is on, how do we change the tax treatment for training? Meaning right now, if I as a business buy an Escalade, I can depreciate that and get a tax write off for it. But if I train a worker with a new skill, I have to add that as an expense. How do we make sure that we treat investment skills like we treat investments in equipment because that's better for the business. We want businesses to invest in workers that are more productive on the job. And it's better for society because if that worker leaves that job, they have skills and investments they can take somewhere else and still be economically productive. So I think that's what potentially is coming next. How do we make sure that we are investing in the workers that they're productive no matter where they are? So, invest in startups, but also invest in the people who work there so that they can be productive wherever they go next.
FASKIANOS: Chike, we are almost at the end of our time. And I just wondered if there are, since we are the Council on Foreign Relations, any examples of from around the world of job retraining? Are there countries that are doing really well and what can the U.S. learn from them?
AGUH: So one example is Germany. So again, Germany is successful one, because of a pretty tight coordination within their businesses and their government and their educational institutions. That's one. Two, they have treated their technical and vocational system not as a stepchild, but as an equal to their traditional liberal arts college preparatory curriculum. And I'd argue that in the states part of the reason that at times we've had a negative impression of vocational education is because we've never invested in it or really treated it seriously. In Germany, it is an equal system with just as smart people, just as robust investment infrastructure. And we need to have a similar view here, I would say, on the broader kind of economic stability side, looking at a number of things that the UK has done, particularly around helping businesses keep people on staff. I won't have the numbers right, but basically, they're investing business keeping their workers on payroll, with up to 80% of their wages, capped at a certain amount, which is a huge investment. But I would argue that is going to cost them far less than having those people out of work and trying to get them back in the job market weeks, months and years from now. One place I'll say very domestically that I think has done a really good job of this is looking at places like Chicago. Tight coordination with employers working directly with community colleges, community based organizations to train people for jobs that actually exist, so that they're not only training, or praying there's a job for them, but actually having a job for them. One initiative I'd have people watch, Governor Raimondo just announced Back to Work RI, which is going to be a statewide initiative, doing this exact thing, figuring out the jobs that exist, working with any educational institution to prepare them, and then doing that and getting people in those jobs as quickly as possible. So I think those are some examples from other states and other countries that I think would be really powerful, you know, during this environment. I will also say, I think the thing that Americans do well in times of adversity is innovate. For all people for on this call, we definitely need that innovation now from you. And I think having your ear to the ground in your communities, which I'm sure you all do, is going to help you surface those. And again, I think what we all need you doing is standing there in the public square making sure that we are invested in helping them as much as possible.
FASKIANOS: What a great way to end this discussion. Chike, thank you very much. We really appreciate your insights. And we will share with all of you the video link and transcript, as well as a link to the Future of Work Task Force Report that Chike was a member of and referenced earlier in this call. I encourage you to follow him on twitter @CRAguh. So you should follow his thought leadership there. Chike, it's always a pleasure to hear your insights and your analysis. So thank you very much.
AGUH: Thank you so much to the Council for having me and thank you to all of you for what you're doing for being on this webinar today.
FASKIANOS: Terrific. Stay well and safe everyone. Thank you.
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