The gift of hardship is one we would all prefer to receive without the hardship.
Anyone who has received a difficult medical diagnosis understands the very personal shift in perspective that accompanies it; maybe the pandemic is our societal version.
Individually, our epiphany is often the realization that we are not young anymore. Societally, we are recognizing that our economy has changed too, even if we struggle to find the words to describe it.
Google trends data show increasing interest in “income inequality” starting almost a decade ago with recent spikes and increased emphasis on searches for “racial inequality.” These searches reflect the pandemic’s gift: a realization that our economy and the nature of opportunities are shifting; now we must use that gift for good.
In the early 1940s, service-producing employment slightly outpaced goods-producing employment by about 10% , 44% to 56%, respectively. But over time service-sector employment has steadily grown as a percentage of employment, and today it is 86% of employment nationwide.
Yet our educational system and social constructs haven’t evolved as quickly. (Note: The shift to service employment is even more pronounced in Southeastern North Carolina).
Even the term “capitalism,” with its emphasis on ownership of factories and equipment, is reflective of a prior era. Today, the emphasis would be better placed on who owns the “human capital”, the skills, needed in a service economy. These valuable assets are owned by the individual, not some capitalist. But just like physical capital a century ago, human capital is not evenly distributed.
The pandemic laid bare the differences in human capital and opportunity. In the service-producing sector, those with higher levels of educational attainment and human capital were able to produce their intellectual services remotely, while those providing physical services were not.
Employment in leisure and hospitality fell by 50% during the pandemic, while professional services employment fell by only 10%, and finance and insurance employment barely budged at all!
Some households saw their financial position improve dramatically during the pandemic, while others faced down financial ruin with the most vulnerable in our communities bearing the brunt of the negative effects.
But the confluence of public health events, economic disruptions and political upheaval is driving a shift in social perspectives and policy, hopefully for the better.
To address the disparities exposed by the pandemic, we will need to consider alternatives to the structures of 80 years ago and recognize that individuals own, and are responsible for, their own human capital and their own career paths.
The key to economic growth regionally and higher incomes rests squarely on our ability to develop people.
Human capital is built in a variety of ways and is not equal to the number of days spent sitting at a school desk; simply expecting the schools to do more is not a viable solution. Human capital is built through experiences, mentorship, internships and, yes, formal education too.
As a region strongly reliant on leisure and hospitality, some of the most promising opportunities are in supervisory roles requiring a skillset difficult to convey in traditional education but crucial for the career development of many.
For others, transitioning from an entry-level job to a career might require a micro-credentialling approach or certifications to show prospective employers a knowledge of software or other skills not reflected in prior work experience.
For example, many of our fellow residents have demonstrated wcustomer service skills but need a path to develop and signal competency in other skills required for their next opportunity.
A century-and-a-half ago, Karl Marx theorized that capitalism’s excesses would lead to revolt and its destruction as workers rose up to seize control. But economic evolution has opened a new path, one where the primary inputs into production are already owned by the workers – human capital.