We have been carrying on lately about robots, the poor return on investment from a high priced private college education and even the idea of placing an income tax on robots. It’s time for some truly inspiring example of people working together to address economic problems. Former Speaker of the US House of Representatives, Tip O’Neill is credited with the saying “All politics is local”.
The Trump administration approach to our structural economic weakness is to drain the swamp in Washington and in the process, change the system.
The cry for changing the system is a great vote getter, as our President well knows. Who, after all, wouldn’t like to send the infamous order, “You’re Fired” to the IRS or to get rid of the Department of Energy like Rick Perry thought of doing? As desirable a goal as that is the unintended consequences can be as painful as the solution. And fighting to get Congress to go along is no cakewalk.
So what about a solution that starts with the acceptance of the government being a fixed piece of cement? Our goal is not to change it just simply stop it from getting worse. Better yet, work to create solutions that work within the present structure.
The Story of Dunwoody
As reported by Stephanie Clifford in The New York Times, the Minneapolis-based Airtex Design Group wanted to shift an increasing amount of its production from China to the U.S. because customers were asking for more American-made goods. Their issue was finding cut-and-sew workers, with 77% of US labor force lost since 1990. So Artex formed a coalition of manufacturers along with Dunwoody College of Technology in Minneapolis to train a group of 20-somethings over a six-month period. The cost: a mere $3,695 per person. And the tuition was paid for by local charities.
The result? Airtex pays its workers about $13 an hour plus benefits. That’s a hell of an improvement over $8 per hour flipping burgers at Burger King. Overall wages in this sector have increased 13.2%, adjusted for inflation, since 2008. That’s a hell of an improvement compared to the average American household, where wages remain largely stagnant.
Talk about a win-win situation! Look at what Airtex was facing: wages for its Chinese workers more than quadrupled in recent years, to just under $12 per hour. That was another reason they brought jobs back to the U.S., too.
And let’s say those local charities hadn’t paid that tuition. In other words, let’s do the math: tuition of $3,695 spread out over 30 years at 5% interest equals a little less than $200 per month. Based on a pay scale of $13 per hour, that is less than 10% of monthly income. Bravo Dunwoody College of Technology!
The Airtex-Dunwoody coalition is a model for the rest of our economy. It’s the kind of idea that the Obama administration totally overlooked throughout his time in office.
Interestingly, none of the Dunwoody experiment relied on a government program or federal job training. It resulted from groups of like-minded people working together for the common good. Just imagine if they needed government approval or an Act of Congress to go forward.
Technology is changing the needs of the workplace faster than our educational system can keep pace. Even online courses have a short life cycle. Institutions working with business provided a cost effective difference.
We can only imagine what might happen if other communities, in other parts of the country, put their creative juices toward solving our economic problems. Remember the government shutdown a couple of years ago? If more communities and business got together, maybe we would shut down the government more often.
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