American tech leadership and economy endangered by "Flat World"

Listening to the "The World is Flat", I thought that the flatteners Friedman described were pretty obvious to anyone who pays attention to modern technology and business trends. But when he goes on to describe the impact they have on American jobs and the American economy, I was surprised to find myself agreeing with his cataclysmic predictions if we don't change many of our immigration, education, and employment policies. Starting with the unquestionable premise that brain power is the basis for our economic growth, he suggests that America needs to quickly adapt to the changing world in the following ways:

In immigration, we are fools not to significantly increase visas for highly skilled, foreign workers. They come here, the stay, they innovate, kaching! The terrorist threat since 9/11 has created bad policies - scrutinize the hell out of the visa candidates if you want, but let them in. Our immigration policies for skilled workers are a type of trade protectionism that is misguided - they are based on the belief that employment is a zero sum game - that americans lose the jobs that the foreigners take. The truth is that skilled foreign workers fuel economic growth that increases jobs. And even if there is some displacement, with the world flattening, these people are going to take your job anyway, even if they're not on US soil. Instead policies need to be directed toward...

Job Training and Job Mobility. Friedman suggests a policy of wage insurance that lets someone get assistance (e.g. 50% of wage loss) if they retrain and transition to a new field that requires that they take less pay for a while. He also brings up the importance of making job benefits mobile...health insurance first, and retirement programs second, so that people aren't forced to stay at companies that don't provide them the training/growth that they need.

Coincidentally, I was glad to see the following article on Cnet about some new Democratic initiatives : broadband access, scholarships for math and science, doubling research spending, alternative fuel initiatives. All these are specifically mentioned by Friedman.

I wonder if the Democrats could really seize on this Flattening theme to create policies that provide a stronger contrast between their polices and those championed by Republicans. Like the old Democratic party that supported the worker along with labor unions, the new Democratic party would support the worker's aspiration to survive and thrive as a worker on a global playing field. Don't have the skills? We'll train you. Worried about your kids ability to compete? We'll fix their schools. Feeling put down by your employer? We'll change the rules so that you can go work somewhere else more easily. The contrast with Republican corporate interest is easy to see and to explain. If people are allowed to change jobs, work for themselves, work flex time, etc., it shifts the balance of power from the corporation to the individual. Many high tech workers already enjoy this type of control....pushing this down the socioeconomic scale would be a big win for Democrats.

Comments

[Edward]

Good points Kyle. It seems very difficult to get funding for large scale educational initiatives. The conservatives see this as an opportunity for market forces hence efforts like vouchers and mandates like "no child left behind". Do you believe that spending more money on schools is the way to go?

[Kyle Hart]

I think you could come up with public-private partnerships that help fund job retraining programs. Gov't could provide a type of unemployment insurance for sectors in danger of massive job displacement. They could provide matching funds to employers who want to do the right thing in cushioning the blow of layoffs.

And heck, if you are going to have tariffs on goods, then why not set that money aside to help workers when you are eventually forced to lift the tariff and the sector tanks?

Kyle