No low-wage worker in Shanghai, New Delhi, or Dublin will ever take Mark Ryan's job. No software will ever do what he does, either. That's because Ryan, 48, manages people -- specifically, 100 technicians who serve half a million customers of Verizon Communications Inc. (VZ ) out of an office in Santa Fe Springs, Calif. A telephone lineman before moving up the corporate ladder, Ryan is earning a master's degree at Verizon's expense in organizational management, where he's studying topics like conflict resolution.
That's heady stuff for a guy who used to climb poles. "The technical side of the business is important," says Ryan, "but managing people and rewarding and recognizing the people who do an outstanding job is how we are going to succeed."
Sab Maglione, 44, is more vulnerable. The computer programmer from Somerville, N.J., was hired by an insurance company as an independent contractor in 2000 for good money but soon found himself training the representatives of Tata Consulting who would eventually move his work to India. His next contract in New York City paid half as much -- but even that soon ended when he found himself out of work the day after Christmas last year. Maglione, who has an associate's degree in computer science, is studying hard and remains optimistic about getting a job but says he's been stymied by the "barrelful" of recent experience in the latest programming languages prospective employers demand. "If you don't have it, they say, 'Let's outsource it."'
Ryan the happy manager and Maglione the worried programmer exemplify two powerful crosscurrents in the American job market. Changes in the economy in recent years have made some people more valuable and secure than ever, while pushing others -- even those with skills that were recently regarded as highly valuable -- to the margins.
What makes the difference? New research by economists at Massachusetts Institute of Technology and Harvard University concludes that the key factor is whether a job can be "routinized," or broken down into repeatable steps that vary little from day to day. Such a job is easier to replace with a clever piece of software or to hand over to a lower-paid worker outside the U.S. By comparison, the jobs that will pay well in the future will be ones that are hard to reduce to a recipe. These attractive jobs -- from factory floor management to sales to teaching to the professions -- require flexibility, creativity, and lifelong learning. They generally also require subtle and frequent interactions with other people, often face to face.
The good news is that a substantial majority of the jobs in the U.S. economy are nonroutine. And when you think about it, that has to be the case. In the relentless pursuit of productivity, the U.S. has already demolished millions of routine jobs in manufacturing, clerical work, programming, and other fields. So it stands to reason that the people who have survived are doing things that the downsizing experts -- try as they might -- haven't figured out how to reduce to software or ship abroad.
THE SURVIVORS. Nor do you need an advanced degree to have a nonroutine job. You just need to do something that can't be boiled down to a repeatable procedure or that requires a lot of human interaction. The surviving secretaries, for example, have moved up from typing and answering phones to planning meetings, keeping books, and other more complex tasks. Bank tellers now spend more time handling special requests, while ATMs have taken over much of the job of taking deposits and dispensing cash. The factory workers most likely to keep their jobs will be those who make themselves experts on a variety of computer-controlled machines, or who excel at quick turnaround of custom orders. Those jobs aren't going away.
As the economy evolves, two kinds of jobs will remain impossible to routinize, according to Frank Levy of MIT and Richard J. Murnane of Harvard, in a forthcoming book called The New Division of Labor: How Computers Are Creating the Next Job Market. One kind involves complex pattern recognition. Such skills as spotting business opportunities or repairing a complicated machine fall into this category. The other relies on complex communication skills, such as those required to manage people, devise advertising campaigns, or sell big-ticket items such as cars. Says Levy: "If you can really write the whole job down on paper, then someone else can do it."
Viewed through the lens of routine vs. nonroutine work, the debate over job growth and the future of jobs takes on a new hue. It suggests that Americans looking for good jobs would do well to bet on such constantly varying occupations as manager, entrepreneur, or artist, as well as jobs such as teaching, lending, and sales jobs that require lots of people skills.
At the same time, some jobs that are highly compensated today could soon be routinized. Powerful computers, advanced software, and speedy communications have vastly increased the vulnerability of routine work. Well-paid legal researchers, tax preparers, and accountants, for example, are seeing their jobs outsourced abroad. The jobs require intelligence and technical knowledge, of course, but because the procedures are highly standardized, they can be done at a distance by well-educated workers willing to do the job for far less. Likewise, stock traders could eventually be replaced by automated trading systems. Computer programming is a routine job that used to pay well because few people could do it. Now, part of the work has been taken over by clever software, and part has been exported to lower-wage nations connected by fiber-optic networks.
The people displaced from those jobs are shifting into jobs that can't be so easily standardized. And clearly, the growing importance of nonroutine work increases the value of education. College graduates have steadily broadened their lead over the less-educated in earnings. College grads also have more stable employment. Yes, there are pockets of high unemployment, such as in computer and math professions. But the unemployment rate for all people with a bachelor's degree or better was just 2.9% in February, vs. 8.5% for people with less than a high school diploma. "Fear of outsourcing is absolutely a key factor in driving our enrollment," says Todd S. Nelson, CEO of Apollo Group Inc., parent of the University of Phoenix, which caters to working adults across the country through campuses in 30 states and online courses. The university's enrollment soared nearly a third last year to 186,000.
As valuable as education is, technical knowledge alone won't cut it, because workers in other countries read the same textbooks. For many good jobs, in fact, education isn't as useful as specialized local knowledge. Lin Stiles, a headhunter in New London, N.H., says that demand is hot for plant managers who can improve a factory's efficiency. A fancy degree isn't necessary. Says Stiles: "We frequently do not have college requirements even for a vice-president for operations."
While the debate over the future of work pervades the whole economy, information technology is where it's most pointed now. That's because the IT sector is being split in two. More routine tech jobs, such as the programming done by Sab Maglione, are vulnerable to automation or outsourcing. In contrast, there's still plenty of demand in the U.S. for people who combine technical skills with industry-specific knowledge and people skills. That's certainly true at UNUMProvident Corp., the disability insurer. Says Robert O. Best, the chief information officer: "You used to be able to get away with being a technical nerd five years ago. Those days are over." Now, he says, "We're looking for softer skills" like the ability to work with others, change direction quickly, and understand the business.
`CAUTIOUSLY OPTIMISTIC'. Those softer skills are what Kevin G. Wallace, 46, is counting on for job security for himself and his staff. He's vice-president for engineering at Atomz Corp., a San Bruno (Calif.) startup that provides online Web site management services to clients such as the Presidential campaign of Senator John Kerry (D-Mass.). Wallace says an outsourcing operation could never be nimble enough to respond to his customers' constantly changing demands. "Ultimately," says Wallace, "we want our engineers to know our customers, to live and breathe our customers."
To be sure, automation and globalization will be tough on those people who prefer comfortable, routine jobs, or who lack the education to tackle challenging new tasks. Some of those people will find work as barbers, truck drivers, hospital orderlies, or waiters. While those jobs will be protected by the fact that they can't be done in a foreign country or by software, wages will be depressed because so many people will be competing for the slots.
Still, there's no reason that automation and globalization have to create an underclass. In time, people displaced from routine jobs can study up for more challenging occupations. Harvard's Murnane, an education professor, points out that a century ago, half the U.S. population worked in agriculture, and many people didn't know how to read or write. History has proved that they and their descendants were capable of much more. Murnane, who spends a day a month observing Boston public schools, says "I'm cautiously optimistic" about the ability of Americans to rise above the routine. Those who can will find that computers amplify their powers and globalization extends their reach.
By Peter Coy
With William C. Symonds in Boston, Stephen Baker in New York, Michael Arndt in Chicago, Robert D. Hof in San Mateo, Calif., and bureau reports