Though the pandemic brought much hardship to the U.S., Canada and Mexico, it also sparked innovation and adaptation to keep markets and supply chains open and to support workers. However, for the economies of these countries to revive, remain competitive and prosper in the new economy that is emerging around the globe, North America’s trade partners need to collaborate on upskilling workers.
They can build out from the U.S.-Mexico-Canada trade agreement (USMCA), which is just kicking into gear at one year, and with the momentum of the Biden administration, which is endorsing this priority at home and proposing a $48 billion investment in U.S. workers as part of its jobs plan. But workers must be a joint North American focus to increase competitiveness for all three countries against China and other economic powerhouses. North America’s governments and private sector should collaboratively expand investment in the continent’s workforces, as a new Wilson Center paper argues.
Long before the pandemic, North America was suffering from alarming skills gaps and mismatches in all three countries. The pandemic exacerbated these problems for businesses and workers. It increased the risks of leaving more workers behind, and added challenges to incorporating displaced and disadvantaged individuals as economies recover.
Workforce problems were already harming North America’s economic performance in recent years. The technological changes of the “Fourth Industrial Revolution” were sweeping through workplaces across the continent, eliminating, redefining and creating new classes of jobs. While holding the promise of more and better jobs, this digital revolution also brought frightening “creative destruction” for workers, companies and governments. We saw that poorly managing these challenges could magnify economic, social and political disruptions.
The pandemic’s fallout accelerated and reshaped changes under way. It forced businesses to urgently reevaluate the ways they applied and used artificial intelligence and technology in their workplaces, how they managed workers (including remotely), and how they could better use the internet and the digital economy. The pandemic shutdowns also sparked serious rethinking about the resilience, robustness and reliability of supply chains.
The crisis created what the World Economic Forum (WEF) called a “double disruption” for workers globally. In 2017, McKinsey estimated that up to 60 million U.S. and Mexican workers might need to change occupations by 2030 fueled by technological changes. A 2021 McKinsey study finds that even more workers may need to shift occupations than estimated before the pandemic, and in different sectors.
Recent news analyses ask whether there will be worker shortages as the economy restarts and what shape post-pandemic work might take. Many businesses doubled down on incorporating new technology during the pandemic to maintain output with fewer workers, raising the specter of fewer jobs available. Plus, some pandemic work trends are likely to endure and reshape in the emerging economy, including internet-based work and expanded e-commerce.
McKinsey’s 2021 research finds that those hardest hit will be in low-wage occupations, including workers without college degrees, women, minorities and younger workers. McKinsey sees the likely short- and long-term impacts of the pandemic concentrated in areas where people work in close proximity: leisure and travel; retail and hospitality; computer-based work; and indoor production and warehousing.
On the upside, sectors expected to have additional labor demand include medical care, home support, personal care, transportation of goods, and outdoor production and maintenance. However, jobs in these growing sectors, McKinsey has found, are generally higher paying and higher skilled and, post-pandemic, many higher-skilled jobs will continue via virtual work.
My recent conversations with private-sector, academic and government specialists in workforce issues indicate that businesses, governments and schools across North America must continue to reimagine where and how work is done and to improve skills education, reskilling and upskilling. National and subnational governments need to expand access to digital infrastructure and improve academic and vocational programs to support a wide range of effective skills training and upskilling and ease movement to new occupations. Certifications, for example, must be more portable, more focused on skills and stackable, as well as more widely accepted.
Taking on these tasks well needs to involve local, national and regional actors. The United States, Canada and Mexico can learn from each other to assure good results for the three economies.
The three governments should establish a trilateral task force and working groups to develop and coordinate cooperation on workforce development. This effort should foster multi-stakeholder involvement among national and subnational governments, businesses, academia and relevant groups, including unions, foundations and nongovernmental organizations (NGOs).
A post-pandemic North American workforce agenda should focus on such things as work-based learning; credentials transparency; labor market data collection and transparency; and collaborative mechanisms to prepare for changes ahead.
Early priorities could include identifying and scaling up successful existing programs from the three countries. The three-way dialogue also could prioritize best practices in cross-border production networks such as vehicles, in emerging sectors around “greener” production and in better empowering small and medium-size enterprises. Best workforce development practices can be paired with efforts to build more resilient supply chains.
Another promising area is the successful virtual work and education models that prospered during the pandemic. The trilateral task force could encourage stronger cross-border practices and reduce regulatory barriers that limit such collaboration.
A task force would underscore the importance in all three countries of steps to help workers and employees acquire the skills needed and promote policies that will encourage companies, value chains and economies to be more competitive in the post-pandemic global marketplace.
The value of working with the United States’s two largest economic partners — Canada and Mexico — in this effort is as important as ever. The three countries trade $1.3 trillion a year across North America and build much together. Cooperating on how best to invest in workforces will benefit all three countries. Collaboration on labor issues and keeping North America competitive is built into the USMCA. That now needs to be applied in concrete workforce development initiatives. This way, North America can bolster critical value chains, generate prosperity and strengthen performance vis-à-vis China and others.
Former ambassador Earl Anthony Wayne is a diplomat-in-residence at American University’s School of International Service and advisory board co-chair for the Wilson Center’s Mexico Institute. He was a U.S. diplomat for 40 years. Follow him on Twitter @EAnthonyWayne.