Juliette Sellgren 

Science is the great antidote to the poison of enthusiasm and superstition. Hi, I'm Juliette Sellgren, and this is my podcast, the Great Antidote named for Adam Smith, brought to you by Liberty Fund. To learn more, visit www Adam Smith works.org.

Welcome back. We talk a lot about economics on this podcast. We talk a lot about the current state of America from culture to institutions to what on earth is liberalism, and we talk a lot about policy, too. Today, on November 15th, 2023, I'm excited to be talking to Brent Orrell. He's a senior fellow at the American Enterprise Institute where his research focuses on workforce development, job training, and some criminal justice reform. Recently he's been working on AI work, so we might be able to get into that too. His insights offer a blueprint for the future of work. So I'm excited to get into this and what that's going to look like. Buckle up as we navigate the complex terrain of employment, education, and empowerment. Welcome to the podcast.

Brent Orrell (1.22)

Well, it's absolute delight to be with you, Juliet, in this context. This is not the first time that we have met and we share many friends and quasi family members together. So what a delight to be on your podcast.

Juliette Sellgren 

Yeah, I'm glad to finally have you on. So maybe this will make for an interesting first question. What is the most important thing that people my age or in my generation should know that we don't?

Brent Orrell (1.55)

So I had a little bird told me that I was going to have to respond to this question, so I did actually give it a little bit of thought. And I think the most important thing for people your age who are in college getting ready to graduate or doing graduate work or whatever they're doing prior to joining the workforce, is I tell the young people that I speak to try to relax a little bit. This is a very driven generation, particularly among those who have been in college. They work really hard to get into colleges, good colleges. They work really hard while they've been in college. And all of that is meant to be preparation for a successful life.

And what I like, as I said, what I like to say is you can relax now. You've made it, first of all, you won the lottery by being either born and educated in America or being educated here, and you are part of a almost $28 trillion economy. And we have to believe that in an economy of that size and complexity, that there is a place for everyone to have a happy and successful life. And so you've all strived to get to where you are, and now you're getting into that part of life where you're going to try to capitalize on that and use all of the investment that your families and your friends and churches and other institutions have made in you to have the successful life. But the one thing you don't have to worry about is that you won't have a place to live and you won't have food to eat and you won't have clothing to wear.

And this is a new development for human beings when you look at it on an evolutionary time scale in which human beings have had to always be in the business of survival to have their basic needs met. And so that's what we're conditioned for. We're conditioned for striving as a way of surviving, and those conditions no longer prevail. We're in an era of abundance and it's going to become, I think even more abundant. And so you young people out there listening to this podcast have a different set of challenges in front of you, and that's how do you make the most out of your life? And those are problems of abundance, not the problems of survival. So that's what I encourage people to kind of take a pause, take a breath, think about what you really want out of your lives, think about how you have been uniquely equipped to make a contribution to the world around you, and then figure out how to make that contribution. So that's the one thing that I would really like students in particular who are thinking about their futures to reflect on.

Juliette Sellgren (5.43)

So something I've been thinking a lot about recently is the role of expectations in everything from the way we interact with certain individuals to what happens with inflation. I am coming to terms with slash realizing now the importance of expectations in what is possible for the future. And so something drove you to give this response. And so even though we live in this age where we have so much to be grateful for and so many possibilities ahead of us, there's kind of this narrative, especially among my generation, that this is not really the case. And so this is a big question, but how have you seen this? What drove you to give this response and what do you think that tells us about how maybe we could go about correcting it?

Brent Orrell (6.43)

Yeah, so here's what I think. I grew up in Oregon in a town of about 2000 people with a graduating class of about 120, I think it was. My parents both of course came up, grew up during the Great Depression and the deprivations that went alongside growing up in that era when things were not possible, there were constraints. And to some degree, survival was really had to be forefront in people's minds because conditions were so tenuous. And so they communicated that through words and other ways that life was uncertain and that we needed to, you need to work hard. And because it was a question of survival. And I think that that's still that idea again, because we are human beings and we are evolved creatures, we still have that within us, that our survival instinct kind of reigns supreme even in this period of abundance. So that creates this anxiety that we feel about whether we will have enough opportunity in our own lives.

And what I have come to learn is that, like I said, those assumptions about the precariousness of life don't really obtain anymore. And obviously disaster could overtake us, all sorts of things could happen, but we shouldn't be programming our lives around the worst case scenario. So that's part of the answer is that I think conditions have changed, and that's changing the advice that I'm giving right now. It's not the advice I would've received or did receive. And I think the other thing is taking it from the macro perspective to the individual perspective, I am increasingly persuaded that it is those things which we love the most, which ultimately create the life, the satisfying life that we desire, and that we need to pay attention to those things. If our minds are so tied up with the survival question, we never get to the self-actualization question, what is it that's going to create a life that is interesting, satisfying, productive, meaningful in our own lives?

In fact, for many of us, those questions are not just never raised. They're actively discouraged again, because of this survival question. It's like we tell people they come to us. I call this the drunk uncle question. Like this is the question that you get around the Thanksgiving table with your uncle who asks you what you're studying and you say, well, I'm studying anthropology or I'm studying English literature. If it's not a technical field like computer science, the question is always going to be, well, what are you going to do with that as if that were some sort of a knockdown question? If you can't connect your interests directly to an economic outcome, somehow they aren't worthwhile. And what I am arguing in my research and what I really believe is that no, we've got the questions wrong. It's not that the economic questions are irrelevant, they're still relevant, but we are moving into an era in which the main burden on us is going to be what do we choose to do with our lives?

And that has to be driven by a different set of questions, which are, what are my interests? What are my passions? What are the things that get me out of bed in the morning? Like this podcast for instance, this is a passion project I suspect, and this is something you're really interested in. And so you're trying to develop it. Well, that's super important that this is interesting to you. It's worthwhile trial, it's an important contribution, and it will become more important over time. So I think people need encouragement to follow those things that they want to follow and not just be told what they're interested in isn't really valuable and they should care about something else. I think that that's the other half of this is that it's not just survival. It's about how do we arrange our lives in such a way that we're not struggling when we reach our thirties and forties and fifties to get ourselves out of bed in the morning because we're not really interested in what we're doing.

Juliette Sellgren (12.38)

So along this line and the research that you do, how did you get interested in it? What is it about not just this moment, but even this era and the relationship between dignity and work and meaning and the workplace that drew you to looking at this sort of stuff?

Brent Orrell 

It's a great question. I graduated from the University of Oregon. I had a BA in Russian and East European history, and I really thought that I wanted, that was going to be my life. I was going to get involved in foreign policy or national security or something like that. And I came to DC and I found myself competing for these very low level jobs with people who had PhDs from Ivy League institutions who wanted the same jobs at a pittance. The more people supply and demand question, the more people competing for a job, the lower the salaries are. And there were just a lot of better qualified people in this field. So I had to really had to pivot. I had to find something else that was interesting. And what I turned to, again, thinking I had to reflect back to what my durable interests were, what are the things that I would always return to study to think about, to read? I often ask people to take the Washington Post test, which is you're reading a national daily newspaper. What's the article that you always stop to read

Juliette Sellgren

Article?

Brent Orrell (14.21)

Yeah. Which article is it? The type of article, the story that you follow all the time, just because it's interesting, not because of what it's going to do for some imagined future that you have, but it just kind of draws you in because you're innately interested in it. And one of the things that I have always been interested in is cities and the history of cities and how they develop and what they do, cities as machines of human activity and production. And if you start down that path, where you wind up at is the, at least in the American context, is the role that cities play in mobility, in creating ladders of opportunity for immigrant populations or for low income populations. That led me into really thinking about, well, why are people poor? What happens? What's the role of government in attempting to ameliorate poverty? Is their role for government in that, how do our programs work or don't or fail to work as it relates to people in poverty? So that's a very long sort of serendipitous tour of my mental pathway into what I do now, which is really about how do we better equip people for economic opportunity in this country? What are the building blocks of economic opportunity? And that's what drives my research.

Juliette Sellgren 

So can you give us an overview of the important workplace policies and work rules at play and what the state of the American workforce is today?

Brent Orrell (16.29)

Okay. I'll try to give you a quick thumbnail of how I interpret the state of work in America, and I think it's got three major components. The first is demography. Global populations, including the US population, the rate of growth has fallen dramatically, and that means fewer people. It takes 20 years to make it to 20-year-old, and we don't have a time machine to go back and tell people it would really be better for the future if you had more kids. So the population is what it is, and it's not growing nearly as fast as it used to. Our economy, however, continues to grow quite rapidly. When I started this job five years ago, the US GDP was around $23 trillion. It's now almost $28 trillion. So the economy is continuing to grow really rapidly. The human capital base that's there to support that economy is not growing nearly fast enough to keep up with economic growth, and that's why we have labor shortages.

So that's sort of the leg of the triangle that conditions the future of work for Americans is that there's just fewer of us and our economy has continued to grow, and that means just the labor shortages that we're currently experiencing are probably more chronic than they're something that's just going to disappear. Now we have a recession that will mask labor shortage, but labor shortage is not going away. It's with us for the future. So demography, that's sort of leg one. Second leg is technology. Technology is always a factor. Our economy is built on the principle of creative destruction. That's how we've gotten to where we are, is that we build up the economy and then the new technology comes in and reconfigures the economy and jobs are destroyed and jobs are created, and human beings adjust to the opportunities around them. So technology has always been a factor.

I think that generative AI is putting that on steroids. I think it's going to over the next 10, 15 years have a huge effect on jobs. We know that or we believe that. We know, we say we know, we don't really know, but we believe that we know about 80% of jobs. The skills required to do those jobs are going to be changed due to the introduction of artificial intelligence and that the diffusion of artificial intelligence across the economy. So 80% of jobs are going to feel some effect. 20% of jobs are potentially mostly or fully automatable over time with artificial intelligence, unlike all the other previous episodes of automation, this episode of automation appears to target workers who have lots of education and training. The jobs that are most exposed are the ones that people have four year degrees, master's degrees, PhDs. So those jobs are most exposed.

That doesn't mean those jobs are going away. It just means that they're going to feel the impact of AI more than people whose tasks are mainly manual in nature. So cognitive in the sense of cognitive jobs, knowledge economy, jobs are most exposed, and jobs outside the knowledge economy are least exposed as a virtue of because of the way that artificial intelligence operates. So that's the second leg of the triangle. So sitting between those two is the question really a question mark about what kinds of skills might be most useful in an economy in which you've got a shrinking population and rapidly changing requirements driven by technology. So what kinds of skills are going to be most useful? And the answer is we do not know. We can't tell you what skills are going to be the most in demand because those skills are changing so rapidly skill requirements will be changing so rapidly, rapidly.

So almost four years ago now, then candidate Joe Biden is going around the country saying, learn to code. And now we've got copilot programs that do an awful lot of coding for us. So was that good advice or bad advice based on the knowledge that we had at the time? Maybe it was okay, advice. Now it looks like I'm not so sure that that's great advice. So that's what I mean about how quickly the skills requirements can change. So my operating thesis here is that in an unpredictable technological environment of unpredictable technological evolution, which is where we are biggest, the most important skill is flexibility or adaptability to changing conditions. How do you become the kind of person who can quickly pivot and adapt to new skill requirements?

To my mind, that is the master skill for the future. How do we build up inside of ourselves and in our society, the capacity for adaptation to change? And the answer to that question is that we really need to focus on a domain of skills called non-cognitive skills or SOC skills, which when you boil 'em all down are just the capacity to learn and the capacity to interact well with other people doing team-based work. So that's my sort of take on where the future of work is going. We can't tell you what kinds of skills are going to be needed except that there's going to be a tremendous amount of change in what those needs are, and we need to prepare to change.

Juliette Sellgren (23.54)

So you gave me a lot to go off of just now, so I'm going to try to whittle it down little by little. But these things all kind of seem interconnected, especially with respect to your answer to the first question, which is maybe why it's so timely and so perfect. So let's maybe start with AI. Do you think that, and this maybe ties into just the role that work plays in a human being's life. Do you think that we're actually ever going to stop working even if we have AI taking jobs? You talk about flexibility, but when we think about labor and consumption, especially in what you're taught in school about the labor consumption model, econ this, that we really thought for a long time that human beings were just going to be working way, way less at a certain point. And I don't know, maybe this is just from where I'm standing, that doesn't seem to be the case so much. So then what does work mean? And I guess how could AI play into that? Is it something to be afraid of given what we've learned about the relationship between human beings and work and meaning?

Brent Orrell (25.13)

Yeah. No, I think it's really great question. And I'm working on, been working on a piece this morning. It's very top of mind for me. Our head of economics here at AEI, Michael Strain, he published a column, I think it was in Bloomberg. It's certainly available on our website about this question of the future of work. And he notes, and I agree that he's the expert on this. So I'm just agreeing with the expert that automation never in the history of automation has never reduced the amount of work. It's only increased the amount of work that needs to be done. It's this paradox that automation increases productivity, which increases wealth, which increases higher levels of wealth, create higher levels of demand for products and services, which creates new jobs. And I think that has been the history of automation. I see no reason why AI is any different.

I think it's going to change the kinds of work that we do, but I think it's not going to reduce the amount of work that needs to be done. It's only going to increase the amount of work that people need to do. So I'm not afraid of AI from that standpoint. I don't think we're looking at a workless future for anyone who is alive listening to this podcast when it gets published. I don't think you're ever going to have to worry about there not being enough work. Work is always going to be there. Now, as Mike talks about it in his piece, in the distant future beyond our lifetimes, you can imagine a world in which there's so much automation that work does disappear, that we can meet all of our economic needs in a fully automated super fantastic future.

And then we don't need to be thinking again, sort of the end point of that survival instinct or the survival instinct is fully invalidated because you don't have to worry about getting out of bed in the morning or not having enough food to eat or a place to live. So you can imagine way out in the future, you can imagine that that's possible. But for mere mortals like us, we're just listening or now talking on this podcast, that's not our condition. I think there's going to be more work. I think it's going to be very interesting work.

And I think as sort of looping back to the beginning of this conversation as work as these sort of, no, some difficult boring tasks are automated away by computers and algorithms and machines. The burden of our existence kind of moves to the top of Maslow's hierarchy, which is self-actualization. How do you create meaning for your own lives? And that's where it goes back to these intrinsic, durable interests that we all have. We need to be developing those things within ourselves so that we're feeding that part of us. There's no part of Maslow's hierarchy that is optional. It's all essential. And as we have to worry less and less about our lower needs, the higher needs take on greater importance. So that's why I think it's so critical for all of us. And the younger you are, the more critical it is, I think, to be focusing on that question of what is self-motivating idea that will sustain us in our career at a time when the burdens are mainly about our choices,

Juliette Sellgren (30.00)

Our choices? So I see this kind of tension where employers are going to have to more and more, and I've already seen this in the way, the timing when employers start to woo college students and how they do it and the things they offer. But then there's also this worry on the side of people my age of like, well, a college degree doesn't guarantee you a job in the way that it used to. It's not actually an investment that guarantees future returns. So I guess what does the relationship between employer and employee look like in that way? And what are employers doing really to fulfill this and what are they going to have to do? And then I guess, why is my generation so worried about not having a job?

Brent Orrell (30.58)

Well, I mean, why are they worried? They're worried because they're human beings. Human beings are natural. We've been worrying since we were on, our ancestors were on the Savannah of Africa, worrying about the lions that might come out from, is that a rock over there or is that a lion waiting to eat me? The descendants we're the descendants of the most efficient warriors. We are the ones who we descend from the people who survived. And that seeking out problems and challenges, trying to plan and avoid catastrophe is what has gotten us to where we are as a species.

We are very adept survivors, and a lot of that survival instinct is rooted in kind of anxiety. And so it's perfectly natural that it is embedded in our nature that we seek out problems and we seek out worries, and we live in a sense or living off of anxiety. So it's a vital spur to us, but it's a spur that arose out of an evolutionary epic of shortage rather than the one that we live in, which is an era of abundance. So that's why we worry. We're programmed to be anxious about the future, and you can't eliminate that. But I think all of us need to take a breath. We are not living on the Savannah. There is no lying in wait to make us better breakfast, lunch, or dinner. We have a very different set of challenges now in terms of what employers are doing.

I think there's some really interesting thinking going on right now about the future of corporations, whether corporations are really, they have to be fundamentally rethought because of the sort of radically decentralized nature of economic production. And what that portends for the future of the corporation was a kind creation, an idea that for aggregating human talent and energy and muscle to get things done. And so the question is, in this new era, does that change? I think that the answer is probably yes. We can see that in trends like remote work where it's really not necessary for us to be in the same office in order to do our work. It's sometimes much better if we're in the same office doing our work together. And there's a lot of advantages to it, but it may be that there'd be a lot less office-based work, and that corporate activity could be reorganized to really leverage talent and specialization and allow just a different way of organizing how we do our work, how the economy operates. I think that's all the good. I think that it's an organic process that's going to happen whether we want it to or not, or whether we think it's a good idea or not. I think it's coming in terms of the way that companies are approaching workers, I think the shortage, the labor shortage is really increasing the sort of bargaining power of workers. And as somebody said on Twitter or X or whatever we're calling it, they say, I think it's still Twitter in the minds of most people. Yeah, okay. Let's just call it Twitter.

Juliette Sellgren (35.41)

I think X is derogatory.

Brent Orrell (35.43)

Yeah, probably kind of is in my mind. But they said strikes, labor strikes like we've been seeing in the past 18 months are really a sign of economic progress because it means that workers are, they're advancing. They're able to take advantage of tight labor, market demand, better working conditions, demand higher salary demand. The signal beneath the noise of the strikes is that these strikes are a sign of health in the economy. And I think that broadly speaking, whether you're part of a union or not part of a union, employers are having to work harder to attract and retain talent. And if you get a business owner to talk to you about this, they will complain nonstop about disloyal workers are that they'll just ghost 'em after accepting a job or work just for a few days or a few weeks and then move on to something better. All of that's a sign of that's good for workers. So I think that overall the signals are very good. Looking into the immediate future in terms of opportunities,

Juliette Sellgren (37.19)

And I kind of want to talk briefly about education. So one of the easy slash maybe the only solution, the only place where we can find this flexibility for workers and this continued moving forward, this growth that is I think tied to finding meaning now. I think this growth shows that in the future, economic progress is going to be tied to if you can find actual meaning in your work, and if all parties are satisfied, which sounds like a great thing. I think giving workers that power has to do with education and even realizing a different form of corporation is going to take innovative, creative thinking, flexibility, and thought, which all ties back to education. And so what do you see being the link between, I guess the workplace as we see it today, and education and what would need to happen going forward for that to change? And are we seeing anything that is or could be positively or negatively affecting this?

Brent Orrell (38.36)

So in terms of how we sort of build our capacity as individuals, businesses as a society, certainly I think this needs to happen within government that we need to really emphasize agency, this idea that the locus of control over our circumstances, it's never exclusively ours. Of course, we're all constrained in a variety of ways, but we still have substantial control over what happens in our lives, and we need to believe that we have that control, that we are the ones who are responsible and have the power to adapt, to change, to respond, to get better, to increase our skill levels, to create new opportunity. Those are all things that we have to believe that we have the capacity for because we do. And rather than offloading that responsibility to someone else and saying, well, I'm going to rely on schools to do this, or I'm going to rely on a government agency to do this, or I'm going to rely on the company that I work for to do this.

No, the responsibility lies within us. And so we need to develop a set of skills that allows us to actuate, to make real that responsibility that we have. And that's why I talk. I spend so much time talking about these non-cognitive or soft skills. There's a lot of different names for them, but these skills are the ones that shape our capacity for interacting with the world around us and for spotting opportunity and acting on opportunity. Things like communication, teamwork, ethics, the whole range of things which we kind of learn by osmosis. They're not the kinds of things that we typically sit in a classroom and learn or in a laboratory and learn. It's not like, here's how to turn the screwdriver. You turn it right. If you want it to be tight, you turn it left if you want to be loose. That's the kind of thing that you can teach in a formal sense. But what we're talking about are the attributes and behaviors and attitudes and capabilities that we kind of learn passively. We don't realize that we're learning them. We are observing the world around us. We're interacting with other people.

We are picking up almost by happenstance, these abilities, these non-cognitive abilities, which really form this. Like I said earlier, this is what the skill for learning looks like. It's also the skill for agency. I need to be able to identify the opportunities and challenges that are in front of me and think about my own solutions and my own responses to those challenges and opportunities. Those capacities are really built very early in life. We start learning that when we're babies and they develop very slowly over time. So we really need to be paying attention to the fundamental institutions of human society, the family principally, and then the extended family and the community around the family. The family kind of moves within, individuals move within that are building up those non-cognitive skills that make it easier for us to learn and to, like I said, be in control of our own lives. So that's I think one of our biggest challenges as a society is how do we maintain the strength of these fundamental institutions that are really the mainspring of non-cognitive skill development.

Juliette Sellgren (43.38)

Could you leave us with some policy suggestions, things that would improve if they can, conditions or, I don't know, encourage the growth we want to see, but also cultural things that maybe individuals can do, even if we can't influence the aggregate from the top down, we can all kind of play our part. So what can individuals do in their own communities?

Brent Orrell (44.07)

Yeah, that's a really great way of thinking about the question. I think there are policies that government can pursue that would increase the stock of non-cognitive skills within American society. So the policies that we have in place that make it easier or make it easier for families to form and then for families to stay together, that's all to the good. And that is probably the most important thing that we can do is look for opportunities for how we strengthen families so that they can do the really critical work that needs to be done to help with the nurturer and development of the next generation. And that's a virtuous cycle. If you do it right in one generation, it's much easier to do it right in the next generation. If it gets broken in one generation, then it's really difficult to then intervene and try to reverse that in the next generation.

Anything that we can do to strengthen families and parenting so that they can do that baseline work that we need to be done is going to have profound effects. Socially, culturally, economically. Much of what we're struggling with economically, in my view in this country is a product of the disruption of the family. And I don't want to criticize any family because single parents are doing heroic work, but we don't have enough heroes and we need to stay with what works here and families where you've got two loving parents, even if they're not together, but two loving parents are supporting the development of their children, just give us far better outcomes socially, economically, in every way. And so I think that's the most fundamental thing. So what would a policy be around that? Well, we have this program that federal government funds called Nurse Home visiting, which in which registered nurses go into the homes of women who have given birth. Usually they're not married, but they get really important instruction on parenting, how to be a better parent maybe than the parent that you had.

These programs have been evaluated over a very long period of time, over 30 years, and they really improved the outcomes over generations of children becoming adults, having their own children. We really see much better outcomes. So that's one policy response. Another policy response is for communities and individuals and families where maybe those skills are as strong as they need to be. The relational skills that support strong families, education in how to relate well to other people can make a significant difference. So those are kind of some policy, a couple foundational kinds of policy experiences. But I think that one of the big changes that we need to tie this all the way back to the beginning of this conversation is that we need to encourage people to take the things they love, the things that they're interested in, seriously, and not to be dismissive of things because we can't quite see the direct connection to an economic outcome.

So in your family one day, Juliette, you'll have kids I'm sure, and you'll be raising them and you'll be a wonderful mother, and you'll be asking these questions, what does my child love? And how can I encourage my child to develop that love? Because you just never know how that's going to translate into opportunity down the road. My love of history became a career in public policy, but my parents would've had no way of knowing that all they could do was like, oh, he really likes to read, so let's give him lots of books and not say, we just stop reading, go out and do something useful. That's the kind of attention that we need to be building into our lives and the lives of the people that we love, so that they can become the person that they're kind of destined to be and help 'em to develop the gifts that they will in turn be able to give back.

Juliette Sellgren (49.42)

Thank you so much for sharing. I have one last question for you. What is one thing that you believed at one time in your life that you later changed your position on and why?

Brent Orrell (49.56)

So many things? It's so many things. I mean, when I first came to Washington, I was a dyed in the wool hardcore liberal progressive, and my entire orientation has changed that I am much more in kind of a libertarian camp of it's the persons, the human person who really matters the most, the individual, and it's out of the individual that all of these wonderful things that we have in our lives and all the progress that we've made as a society is a product of the passions of individuals and not the product of state organization. So I mean, that pretty much covers the gamut. It's not that I don't believe government doesn't have roles in all of these things, but I would say the fundamental change has been a change in perspective has been around where does, from what does the good life derive, and it isn't from the state. And I think why I changed my mind is being immersed in government and seeing just how limited its impact often is, especially among the most disadvantaged who are most dependent upon the government.

Juliette Sellgren (51.37)

Once again, I'd like to thank my guests for their time and insight. I'd also like to thank you for listening to the Great Antidote Podcast. It means a lot. The Great Antidote is sound engineered by Rich Goyette. If you have any questions, any guests or topic recommendations, please feel free to reach out to me at great antidote@libertyfund.org. Thank you.