6 years ago

Infrastructure versus obsolescence: Trump\'s daunty trade-off

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As the United States leads the rest of the world into the Fourth Industrial Age, Donald J. Trump's advent poses some truly formidable questions. Many of those over the obvious trade-offs: creating skilled workers suitable for the Fourth Industrial Revolution paraphernalia without tipping the immigration barometer in the wrong direction; then finding low-wage workers to build the promised infrastructures, again, without setting off immigration alarms.
Taking jobs first, we find some of the traditional unemployment components no longer fit. For example, as Barack Obama left the While House, the unemployment figure fell appreciably below the 5.0 per cent mark (to about 4.5 per cent), but without the economy showing the zap that comes with such invigorating news. That is unfortunate since the figure is far below the post-World War II monthly unemployment average of 5.8 per cent. Just as Obama did not get the credit for this feat, so too could US citizens not relish the glow that accompanies it. Some of the answers can be traced to the nature of work today: job-permanency yielding to job-transiency, as new equipment and technology demand higher skills and constant re-tooling; more work-hours must be completed to satisfy the rising living costs, thus boosting part-time jobs, and thereby reducing the time available to learn new skills; and with the ratio of unemployed workers for every new job-opening collapsing from 6.6 per cent to 1.4 per cent just during Obama's tenure, the workforce, and particularly the high-skilled sector, is poised to run short of workers almost immediately (see Bloomberg Businessweek, December 19-25, 2016, p. 13).
Resorting to foreign labour confronts Trump's electoral pledges to find US citizens jobs, curb immigration, and make the United States "great" again. At stake, at least in part, is education. Not enough US citizens have been entering, nor getting the full benefits of wholesome undergraduate schooling, nor even advancing beyond into post-graduate degrees. This is fundamental to satisfying the needs of the Fourth Industrial Revolution: with the advent of artificial intelligence (AI), workers with commensurate skills, at a time when formal education is appealing less and less to students. Either rising education costs, insufficient time-availabilities, or just pure indifference (driven by the trappings of post-industrial life, like Internet, social media participation, socialising, and so forth) demand similar attention. US undergraduates refraining from going beyond the Bachelor's degree are matched by more countries sending more of their top students to the United States for higher training, and which, in the aggregate, swamp their average US counterparts with their knowledge, bulk, and superior outcomes. 
Therefore, Trump's key trade-off is simple: either educate students more (with more incentives, such as loans, stipends, grants, and fellowships to pay the spiraling graduate school fees), and thereby produce the key components of the Fourth Industrial Revolution; or go heavy on infrastructures, thus employing, for example, the unemployed white college drop-outs who voted for him if they are keen, or immigrants, who did not, because no one else will do the work. The United States will go in whichever direction he chooses: either behind the steering-wheel of the Fourth Industrial Revolution, or to reiterate what it was until the rise of Japan in the 1950s, a country of hard-working blue-collar workers.
Unfortunately, there exists more tussle than just that trade-off. A Fourth Industrial Revolution outcome would strengthen the camp that vehemently opposed Trump, his philosophy, and presidency in the election and its immediate aftermath. Recall how Silicon Valley voted so heavily against him that talk of California seceding from a United States under Trump even became noteworthy news. In fact, already his executive order to ban citizens from seven Muslim-majority  countries fired up many of these companies, some of whose workers originate abroad, but demonstrating, in a nutshell, the stickiness of the dilemmas.
Trump's distaste for intellectual and business segments might push him harder in the other direction: building US infrastructures. In the process, though he might retool the United States, that retooling would not directly feed into Fourth Industrial Age skills at a time when high labour costs make such wages unsustainable.
Another factor why he may be landlocked with his infrastructural agenda is that it is now the biggest game on the international playground, abetted no less by the US competitor he rails against the most: China. With Chinese funds, the rest of the world is really on an infrastructure-building binge. For the United States to not get in on the act, would leave it farther behind in any global league than even Trump's abysmally low positioning of the United States. Yet, this opens up the other dilemma: loss of US competitiveness from defending the status quo (fixing infrastructures, thereby essentially accenting the paraphernalia of the Second and Third Industrial revolutions), rather than exploring the technological frontiers (thus opening Fourth Industrial Revolution windows).
It will be a costly venture, but something billionaires have no qualms considering. By downsizing government (after "draining the [D.C.] swamps"), much of the costs would be paid by relying on feeding the private sector. For services, pay-offs usually come in the form of higher transportation or usage fees. Leaving infrastructural projects in private hands could run into the financial traps this entails - of fleecing the consumers in broad daylight.
Traditionally leading international countries have sought the edge by, for example, Country A playing Country B off against Country C, that is, the typical balance of power logic of befriending the enemy's enemy to reducing the enemy's advantage. President Trump had a perfect opportunity of doing so with Japan: Shinzo Abe was not just the second leader he has met after being voted in; but since he has met Abe twice already, we also expect this bilateral relationship to be at some Rubicon: mutual agreements would fend China off, and leave every competitor better off. Abe's master-plan of partnering the US rebuilding exercise (as a step to revitalise Japan and keep China at bay) confronts Trump's "America first" logic by bringing in the very foreign investors and money he campaigned against. Whether he is walking on thin ice or not with his promises/pledges, at least teaming up with Japan gives him more breathing space with China and brings him some much-needed infrastructure-building technology (speed-trains, for example). He will, however, have to go far beyond, particularly domestically where his audience awaits in anticipation, but where these foreign agreements breed suspicion.
How far Trump goes with Japan may be the litmus test, not just of his infrastructure-building agenda and "America first" restoration plans, but also reining in China, if that is where the United States lost its edge. Any strikeout on this issue might taint the remainder of his tenure; but any breakthrough could recharge more of the United States than he may have envisioned. Any "new" America will need new thinking. Trump's biggest challenge would be to show he can muster what it needs to do just that; and Japan is but a heavenly-sent opportunity if handled with care.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.
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