Well, that escalated quickly! We are still reeling from the sights and sounds of thousands of Americans storming their own Capitol with the intent of overturning the results of democratic elections and harming democratically elected legislators. Beyond the common thread of anger and violence, beyond cartoonish outfits and slogans, we may have missed something more foundational that connects most of these people—an almost complete alienation from mainstream patterns of social and economic participation.
If socioeconomic alienation is acknowledged as one of the root causes of violence and insurgency in other countries, could the attempted insurrection of January 6 be the logical culmination of similar forces in the United States? More importantly, what can we as business and technology leaders do to address this alienation and restore America’s promise to all Americans, so that everyone feels invested in its future—and not inclined to tear it apart.
A Word Before We Dive In
Before we delve into the details, it is appropriate to address the toughest and most personal part of this article.
The events leading up to and including the insurrection on Capitol Hill have traumatized millions of people, especially people who are survivors of racial, gendered, and/or sexual violence. They have seen their most intimate personal and historical traumas play out in a public square and at a national scale.
People rightly do not see why anyone should empathize with insurgents with Nazi tattoos screaming racial and misogynistic slurs, beating down law enforcement officers with the American flag, and bragging about it with the same combination of entitlement and insouciance that a previous generation demonstrated while posing with bodies of lynched Black people.
This article and its recommendations are not intended to rehabilitate people who have crossed the line into overt hatred and violent rebellion. They do not aim to excuse their attitudes and behaviors, or reward people who present a clear and present danger to our society.
However, for each of the people who stormed the Capitol, there are thousands of others who have not crossed over into insurgency or overt identity-based hatred, but who are disaffected and desperate, and do not trust our economic and political systems. They are not all nihilists; given the arc of American history over the last 40 years, some of them have good reason to feel that the system is rigged against them. If loss of hope and trust are root causes of violence and insurgency, perhaps restoring these in some measure can start the healing.
We must try to find solutions, even in the face of the worst provocation. To give up and give in may lead to the end of the exceptional American experiment in human potential.
A Nation Divided, but Not How We Think
The narrative of the last two decades of hyper-partisan politics is that America is a nation divided into tribes that no longer talk to each other or even share a common language or reality. While this may be true, the real divide is more structural and far more insidious. The fundamental divide in American society is one of economic opportunity and outcomes.
Despite the mythology of the American Dream, our society is one where the top two determinants of socioeconomic status are parental education and income. In the last four decades, real wages of the bottom half of Americans by income have grown by 0.2% a year—essentially, remaining flat. Years of this stagnation have led to even sharper disparity in wealth, where the top 1% by wealth hold 15 times more wealth than the bottom 50% (in other words, they are on average 750 times wealthier).
Frequent economic shocks, such as in 1979, 1990, 2000, 2008, and 2020 have served to exacerbate these inequalities by driving economic instability, food and shelter insecurity, and desperation among American workers.
The job loss and economic shutdowns caused by the COVID-19 pandemic have merely brought the logical outcome of a 40-year trend into sharper focus. Close to a third of renters in our major cities are in rental arrears, and 1 in 5 Americans relies on food banks to ward off hunger. While we focus on unemployment numbers, we overlook the fact that even among those fortunate to be employed, over one-third are in part-time or contract roles. These workers perform roles considered “essential” to our economy, which is a cruel moniker for the low wages, poor working conditions, no workplace protections, and risk to life and health borne by American workers so the rest of us can continue our lives with relatively little disruption.
Overlay record-high stock markets and personal savings on this dire economic reality, and the divide between the two tribes of America—the highly educated, new economy entrepreneurs, executives, and professionals living primarily in a few select large cities, and the working class spread across the country, struggling with unemployment or perilous employment, high debt and uncertainty, and no pathways to success—is brought into sharp relief.
We live in a time where economic inequality has never been greater, and opportunities for progress for anyone outside the established elite have never been smaller. While these forces no doubt affect women and Black, Latinx, Indigenous, and LGBTQ people most acutely, they also impact vast swathes of working-class white Americans. They may on the surface look like the archetype of our social and economic elite, and as a result benefit from privileges that accrue from this coincidence. But under this veneer, they have more in common with other people marginalized by society than perhaps anyone would like to admit.
Unfortunately, we have been conditioned to focus on divisions that do not define us, while ignoring the fundamental division that condemns over half of our people to hopelessness.
American Carnage in Real Time
There are many contributing factors to this current state of affairs—the failure of supply side economics to spur productive investment; stock markets as an alternative definition of value divorced from structural economic realities; unchecked growth of unfair trade practices; exponential growth in the cost of post-secondary education; continued dependence on employers for healthcare coverage; and rise of the gig economy that passes off exploited workers as empowered entrepreneurs.
Beyond all these forces, the single greatest contributor to the socioeconomic alienation of a large part of America, one that also contributes to and amplifies the factors listed above, is the decline of American manufacturing.
It is fashionable for us, ensconced in our comfortable, new-economy, high-technology enclaves, to see manufacturing as a relic of the past, with technology innovation as the driving force of the economy. While technology and related industries do indeed drive much of economic and stock market growth, that is of little comfort to the half of America that does not own any stock and whose earnings do not keep pace with inflation.
Manufacturing represents the last great democratized industry that can create productive and secure employment at scale. In 1975, manufacturing employed 25% of Americans in jobs that generally provided financial stability, prospects for growth, and health and retirement benefits. This has dropped to below 10% now. Manufacturing employment has fallen by 95%, from over 200M in 1985 to just above 10M today. No technology genius, no business innovation, no global force can replace these lost jobs with anything at remotely the same scale or with the same broad positive impact. We are now reckoning with the profound impact of this loss.
The disintegration of working-class America can be directly traced to this precipitous drop in manufacturing employment:
- The rise of perilous employment is not some great testament to American entrepreneurialism; it is the last desperate act of dispossessed workers to find any way to put food on the table and keep a roof over their heads.
- A lack of post-secondary education is now synonymous with being working class, with high cost and institutional barriers keeping people from the education necessary to participate in today’s economy.
- The fast-burning opioid addiction crisis that counts working-class Americans as 90% of its victims has its roots in the lack of affordable healthcare and the inability to treat chronic pain that is often a by-product of poor work conditions.
- Two generations caught in jobless recoveries have amassed the greatest private debt in history, with per capita debt of $135K and $78K for Generation X and Millennials respectively, and the debt of the latter rising 60% in the last five years alone.
- The stress of alienation and lack of clear pathways to success has led to a tripling of suicide among white working-class Americans in the last 25 years, while alcohol-related deaths have risen by 130%.
In Nothing We Trust
This sharp erosion of pathways to success is linked to the direct role that institutions—governments, corporations, markets, academia—have played in promoting an idealized vision of “free markets” and “meritocracy” that is far from the reality faced by American workers. As a result, trust in institutions is at an all-time low. A 11% level of trust in Congress, 18% in television news, 23% in big corporations, 24% in newspapers, 24% in the criminal justice system, 29% in public schools and organized labor, 30% in banks, and 36% in the medical system leaves NO institution that has historically been associated with American greatness with a meaningful role in the lives of American workers. And these numbers were before COVID-19!
In the absence of trust as a foundation for social organization, the social and economic carnage has perhaps inevitably manifested itself in the amplification of racial, ethnic, and gendered hatred, which have been part of America’s DNA since its founding but have now reached a fever pitch. Disaffected people have mistakenly believed that the cause of their misfortune is competition from other people marginalized by society, and not the actions of the elite they emulate and aspire to be. This belief has now become the basis of a new American reality, where society has been fragmented between multiple tribes of “free agents” untethered from any concept of a shared society, believing in their own truths and fighting ever more desperately over ever-decreasing resources.
To complete this vicious cycle, these same alienated people, trying to make sense of the descent from a relatively comfortable and optimistic life of just a generation ago, with no authority to trust other than their own flailing efforts at understanding complex phenomena, have become susceptible to the kinds of conspiracy theories that led to the assault on the Capitol. The flotsam and jetsam of the flawed American experiment has finally washed up on its most hallowed shore, making it impossible for polite society to continue to avert its gaze.
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Restoring America’s Promise
There is no shortage of opinions about what we need to do to address this crisis. Proposed solutions range from the draconian—deprogramming people and removing their voice from the public square—to the authoritarian—overpowering this ragtag group with superior military force—to the cynical—finding a way to channel their misguided energy for political benefit. These opinions are perhaps unsurprising given our history of dealing with similar foreign threats. I urge readers to study the events in Vietnam, Afghanistan (version one), Nicaragua, Bosnia, Rwanda, Afghanistan (version two), Iraq, and Syria to judge for themselves if we want these stories to play out within our borders.
As a person who lives at the intersection of business and technology, with a particular responsibility to the manufacturing industry, I believe there are immediate, practical, and realistic steps we can take to help address one of the root cause of these issues—a precipitous decline in stable, full-time, well-paying employment.
In the absence of trust as a foundation for social organization, the social and economic carnage has perhaps inevitably manifested itself in the amplification of racial, ethnic, and gendered hatred, which has been part of America’s DNA since its founding but has now reached a fever pitch.
Fill these vacancies now: As perverse as it may sound, at the end of a 40-year downturn in employment and in the middle of the longest period of sustained high unemployment since the Great Depression, there are over 600,000 manufacturing jobs currently unfilled. There has been an irreversible shift from traditional labor-intensive jobs to high-skilled jobs in automated plants, digital ecosystems, and new high-tech sectors, but our policymakers have stubbornly resisted recognizing this fact and relied instead on unrealistic promises of resurrecting jobs that no longer exist.
Manufacturers have to initiate a direct dialogue with workers and communicate the types of jobs that exist, how they are superior in terms of wages and working condition to jobs of the previous generation, and what skills are required to perform these jobs. Manufacturers are doing an admirable job of reskilling and redeployment programs for workers impacted by innovation and automation. These programs can and should be extended to displaced workers looking for a way back to productive employment. This effort will require a partnership with local governments and NGOs in areas most hit by chronic unemployment. These communities understand the urgency better than anyone and will be willing partners in this journey.
Purposefully create manufacturing 4.0 jobs: The decline of traditional labor-intensive jobs will accelerate not only through automation but through the realignment of our economy away from traditional sectors such as fossil fuels and industrial farming. This trend is more than offset by the growth of new industries and jobs in the wake of this ongoing realignment. These jobs are being created by five forces—new industries such as renewable energy and sustainable agriculture; new materials required to support manufacturing in these new industries; improved energy and distribution infrastructure required for adoption of these industries; high-tech and automated manufacturing processes requiring new skills; and after-sales service of the new products and infrastructure.
Each of these drivers leads to the need for large numbers of highly skilled, technically proficient manufacturing workers. Current skills will not readily translate into these new requirements. Manufacturers need to focus on defining and formalizing these new roles, and then purposefully focusing on creating opportunities for people to fill these roles. This will require partnerships with post-secondary and trade schools to make timely, relevant, and affordable education and training available for people. It will also require a clear definition of new career pathways to restore faith in the education and training process to at least two generations of workers who feel abandoned by the system.
Simplify and target regulations: No, this is not a paean to the dilution of labor laws and environmental protections so that we too can join a race to the bottom on cost. This is a request to revisit the byzantine network of registrations, permits, and approvals, at multiple levels of government, that is part and parcel of how manufacturers are regulated today. According to the National Association of Manufacturers, there are 297,696 restrictions on manufacturer operations based on federal regulations alone. Regulations intended to prevent yet another financial sector crisis have had the inadvertent impact of driving small community banks—those who typically work with small manufacturers—out of business. Regulations that provide tax incentives for new investment do not necessarily stimulate the economy since there are no obligations for employment creation or protection.
By coordinating regulations across various levels of government, and assessing regulations for a balance of impacts on investment, employment, and community, we can evolve to a more streamlined regulatory framework that strengthens labor and environmental protections while reducing the superfluous regulatory burden on manufacturers.
Encourage internal mobility: The American economy, and much of the prosperity that accrued to Americans before the Great Industrial Reset of the last 40 years, was driven in large part by geographical mobility. Starting with international immigration as the catalyst for the uniquely American identity memorialized in e pluribus unum, the economic prospects for hundreds of millions of Americans have been tied to successive migrations such as the Gold Rush, the Great Migration, and various oil booms that persisted well into the last decade. Internal mobility has been at the core of economic prospects for the American worker, and more importantly key to dignity and true emancipation for people marginalized by society.
Unfortunately, this mobility has ground to a virtual halt. Less than 2% of Americans per year migrated internally across counties or states in the last decade, a significant reduction from over 6% through the 1970s and 1980s. The need to have two incomes to support a family, dependence on employer-linked healthcare, falling property values, and lack of well-paying, middle-skill jobs have driven this inertia, leading to a self-reinforcing cycle of unemployment, poverty, and despair in distressed communities.
To restart the engine of American mobility, manufacturers must work with local governments, NGOs, and financial institutions to find solutions to these barriers. A combination of salary advances and low-interest loans, even joining bonuses, can go a long way to defray the cost and stress of relocation. In some cases, replicating the success of oil and gas companies in attracting workers from across the country, manufacturers can consider temporary housing as part of job benefits. Economic development groups are already adept at attracting high-education, high-income workers through support in finding housing, schools, employment for spouses, and support networks. There is no reason this approach cannot be extended to next-generation manufacturing workers.
If we believe that manufacturing remains a vital part of our economy and the next generation of manufacturing innovation is key to our global competitiveness, we have to make restoring manufacturing to the center of the American conscience a priority. This is a herculean task, but in the last 80 years, we have defeated fascism, created a legal framework for equality (if not actual equality) to all Americans, been the only country to land people on the moon, and defeated Soviet communism. We are capable of great things. Unfortunately, these great, generation-defining achievements have been reduced to sound bites, video clips, and memes, and we minimize and ignore the level of mobilization and coordination required to achieve greatness.
In this generation-defining challenge of our times, we need all the distrusted institutions—governments, corporations, financial institutions, civic society—working in concert with the American worker to create a new manufacturing renaissance with the same sense of urgency and purpose as defined every previous great American achievement. This can restore hope to American workers and restore faith in what used to be, not too long ago, known as the American Dream.
Can This Work?
It may seem simplistic and reductive to suggest that investment in the creation of stable, well-paying jobs can be a solution to a fractured society that seems to be on the verge of going to war with itself. Looking back at recent history, it is the only thing that has ever worked.
The rise of a peaceful, democratic Western Europe from the ashes of World War II after a period of 500 years of continuous warfare, and the emergence of post-WWII Japan as an advanced democratic society had three things in common—redevelopment of democratic institutions, development of a modern manufacturing industry, and broad-based economic opportunities driven by this growth.
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The reintegration of formerly communist countries into Europe, the emergence of Vietnam as a rapidly growing economy and major American ally, and the normalization of ethnic relations in the Balkans were achieved not by military force or deprogramming people or silencing dissenting voices, but by the same forces of democratic institutions, economic development, and greater economic opportunity.
Despite widespread poverty, stark social inequalities, and barriers to mobility hardwired into traditional social norms, the poor and working class in India continue high levels of trust in political and economic institutions, vote in record numbers in democratic elections, strive for betterment through highly competitive admissions to post-secondary education and government services, and proliferate small businesses with the aspiration of becoming large. These pathways to success have become part of a new national identity, with business leaders, politicians, celebrities, and athletes from poor and working-class families, rural India, so-called backward castes, and minority religions epitomizing the merit of trusting in the system.
If the promise of upward mobility, trust in institutions, and visible symbols of success can work in all of these countries, it is time we try to make what is essentially the American Dream work for Americans again.
Remember when we used to talk about humble peanut farmers becoming president? Remember when we used to eulogize rags-to-riches stories as part of our national narrative? Remember when we used to celebrate hard work as the secret ingredient of success? Remember when Americans used to come together as one nation in a common purpose?
I would love nothing more than to remember all of this again.
