When the Soviet Union’s Sputnik satellite entered the earth’s orbit in 1957, a race of historic urgency began. Would America lose the space race to its archrival? Our national response was decisive and strategic. It centered on the creation of NASA, which has guided decades of scientific discovery, not to mention multiple moon landings.
We find ourselves at a moment of equal urgency today, even if we haven’t had a galvanizing Sputnik moment. Today’s challenge is artificial intelligence, which will disrupt society unlike any innovation since electricity. How do we prepare our citizens for this new world? This article recommends several areas for policymaker attention, including education and learning, support for gig economy workers and ideas for paying for these programs.
A strategic approach
There is no doubt American companies and universities will play a leading global role in the research and development of AI. But like the days before Sputnik, our efforts are scattershot: we do not have a national plan to make sure innovation benefits our citizens.
For example, the US spends about one-fifth what Germany spends on worker training. We have no greater asset than our people, and yet we allocate less than .05 percent of our GDP on labor market training, according to the OECD.
These points argue for widening government’s commitment to education and learning. By 2020, 65 percent of jobs will require postsecondary education, but only a third of the workforce today has such a degree. The answer isn’t simply to send more kids to college — after all, we have more graduates than ever — but to match job requirements with skills, not degrees.
Non-traditional career pathways, including more reliance on community colleges, union-run training programs and online education are part of the skills answer. We should encourage an increase in apprenticeships and permit the use of federal education funds for non-degree programs. We should also subsidize high-performing students for at least two years beyond high school.
But our national response can’t just be about young people. Skill-building must be a lifelong endeavor, and our policies must reflect this philosophy. Every American should have a lifelong learning account to support skills upgrades, with contributions from individuals, employers and government.
The lifelong learning account can function as a hub for a wider set of government services and benefits, including retirement, unemployment benefits and the earned income tax credit, for instance.
The gig economy
Technology is making it easier to find ad hoc employment — gig work — which is why America’s freelance workforce is growing three times faster than the overall workforce. AI will act as a growth accelerant for the gig economy, which has already changed how millions of Americans work. Gig workers benefit from flexibility, but they suffer from a lack of benefits like health insurance or paid time off. It’s time we take a strategic approach to supporting them.
As an example, we need better incentives to encourage gig workers to seek coverage. Gig workers will be more likely to purchase individual insurance coverage if we stabilize the market to address rising premiums, offer more generous subsidies, and expand subsidy eligibility. Increasing coverage of these workers will only benefit the common risk pool to drive down costs.
We can’t operationalize this idea without discussing how to pay for it. Consider this: today, American companies spend at least $160 billion per year on training, but the federal government spends $17 billion on training. We need to balance this ratio.
How about revisiting the border adjustment tax proposed by Republicans last fall? It would generate an estimated $1 trillion in revenue through a 20 percent tax on imports. It’s a version of a value-added tax which could be scaled up or down. A second approach could be borrowed from President Trump, who in 1999 proposed a modest wealth tax.
The magnitude of the opportunities and risks from AI are in full view. America’s competitors — see China — are crafting thoughtful, long-term plans to compete in an AI-powered world. We need to match the determination of the Sputnik generation, putting our citizens at the center of the economy of the future.