For all the innovation, growth, and regeneration our New Economy offers us, there is a price to pay. Job security is gone. No single company -- big or small, old or new -- can offer it. The old days, when 40 years of continuous service led to a gold watch at age 65, are over.
Today, one in 5 people leaves his or her job every year -- that's about 20 million job slots that must be filled each year to see employment totals break even. Roughly one in 10 leaves involuntarily -- he or she is fired or the company closes. One in 10 changes occupations each year in order to stay competitive and/or satisfied in the work force. And every year about half of these job leavers must uproot themselves and their families to move a long distance -- in search of better work or any work at all.
In short, the odds are very high that a young person getting out of school today will change employers many times during his or her career -- will, in fact, have multiple careers (careers in varied occupations). He or she will likely live in several different cities, and will have -- as the economy "atomizes" and many smaller growing firms replace declining larger ones -- an entrepreneurial experience at least once along the way. (About 70% of the graduates of Harvard Business School -- a Fortune 500 prep school -- end up in a small or midsize business within 10 years of graduation.)
What causes all this mobility? It's the patterns (they are predictable) of company fortune in the New Economy. Three characteristics, especially, make mobility unavoidable:
1. As a group of fast-growing small companies creates most new jobs, a group of rapidly declining larger companies causes most job losses. Generally, workers must flow from the falling to the rising.
2. The numbers of businesses starting up or failing continue to climb. Again, workers flow out of one and into the other.
3. Even the rapid growers aren't always growing. They're volatile, and during times of contraction, workers are dismissed. When these companies surge again, workers are hired back.
Flow, of course, may be the wrong word. The dislocations are jarring. The new jobs may be located far from the old ones (the growing specialty steel mills are more often in such places as South Carolina and Nebraska, not Pennsylvania or Ohio). And the new jobs frequently are different from the old ones. They require an understanding of computers or a specialized body of knowledge that is changing every 12 to 18 months.
What this sort of job turbulence means to you is straightforward. There is no security in your job. To be secure, you must be good at what you do, as well as prepared to do it for different employers. And to be good, you must be current -- up-to-date on the skills and knowledge your work demands.
This implies constant reeducation, by whatever means (formal schooling, apprenticeship, self-instruction). And because the New Economy places a premium on flexibility and adaptability, the education should be broader rather than narrower. If one were advising a college student today, one might promote the liberal arts over a professional specialty. The person who can shift and change will have a decided advantage over the one who doggedly plows a single furrow.
If you manage a company, the new job turbulence poses particularly acute problems because it comes at a time when the growth of the labor force is actually slowing down. We have absorbed most of the baby boom into the labor market. The growth rate of the work force in the next 10 years will be about half of what it was in the past 10 years. That means you will be able to rely far less on schools to upgrade (and adjust the mix of) your work force, because all schools will be adding only about 1% to the labor force each year. If you want to upgrade (or even maintain the currency of) the skills and knowledge of your workers, you're going to have to teach them yourself, only to see an average of one-tenth of them walk off each year with the education and training you have provided.
Opting not to educate will make you noncompetitive in a few years. Opting to educate, on the other hand, may drive you into bankruptcy in a few years unless you find ways, at the same time, to motivate your highly trained workers to want to stay and work for you.
The slowing of net job growth and the increased flux within the labor force poses a set of severe problems for the nation as a whole. Each year, as the pace of atomization increases, more people are searching for new jobs, and each year the number of net new openings gets smaller and smaller. We will no longer have growth as a "shock absorber" to ease the burden of increased turbulence. The odds are now much higher that when someone changes jobs -- by choice or not -- the openings available will be in a different company, require a different mix of skills, and be located in a different city. In short, the dislocation experienced in our factories over the past 10 or 15 years is very likely to spread to a much broader segment of our labor force over the next 10 or 15.
As a result, the need for occupational or career insurance will become in the next 20 years just as pressing as the need for health insurance and retirement insurance has become in the past 50. We must provide a vehicle by which an individual can change jobs and careers and residences without fear of financial catastrophe, just as we have guarded against catastrophes caused by illness and old age. If we do not, we will gradually condemn a significant portion of our work force to obsolescence -- and to a sense of worthlessness that they, as their numbers increase, will not tolerate and that we, as a nation competing primarily through our work force in a world economy, cannot afford.