Prioritizing Workforce Mobility in the Age of Digital Transformation
The Challenge: Structural Barriers to Mobile Work and an Agile Workforce
When policymakers and pundits talk about the “future of work,” most of the conversation focuses on the risk that automation and artificial intelligence pose to jobs. Indeed, these technologies necessitate that workers have higher technical and social skills. While these shifts will bring changes and challenges for workers, the digitalization of the economy creates tremendous opportunities as well. As cloud-based enterprise platforms and app-based services become more common, new digital business models are arising and ever more goods and services are becoming digitally deliverable. These shifts are creating a tremendous opportunity for workers to increase their mobility, agility, and freedom. The coronavirus crisis has accelerated these trends as digital connectivity has offered a lifeline to workers and businesses that can operate without a physical presence.
Building on these trends toward all-digital business models and a more mobile, agile workforce will yield significant benefits for workers and the United States as a whole.1 Where digitalization allows workers to consider job openings across the country, their opportunities will broaden while employers’ talent pools will become stronger and more diverse. Where digitalization allows workers to perform the same job from anywhere, they will benefit from the freedom to live where they please, and regions that have seen economic stagnation may attract new talent, commercial activity, and tax revenue. And where professionals can offer their services electronically, they can grow their client base and customers will have a broader set of service providers to choose from.
But three major barriers are holding back the further growth of worker mobility in the United States. First is the lack of universal broadband. Clearly, participating in almost any kind of remote work requires a strong, reliable Internet connection, and regions that lack broadband availability will be left behind. Second, antiquated state-level occupational licensing requirements present a significant obstacle preventing people from moving or accessing flexible work opportunities. Third, the system of tying benefits—particularly healthcare—to full-time employment makes it challenging and expensive for workers to take risks, change jobs, and work independently. Successfully addressing these challenges will leave the U.S. workforce far better equipped to compete globally in a digital age.
The Solution: Three Reforms for Workforce Mobility
To overcome the barriers preventing a more dynamic workforce, leaders must pursue three reforms in concert: universal broadband access, universal occupational licensing reciprocity, and greater portability of benefits from job to job. These reforms cut across diverse areas of policymaking and will require partnerships across government, businesses, and nonprofits. But the potential benefits—for workers, for businesses, and for U.S. competitiveness—are immense.
Universal Broadband Access
Broadband Internet is vital to our lives today. However, millions of Americans still do not have the access that they need in order to attend school online or work remotely. Tens of millions lack any access to broadband2 and, even when access is nominally available, close to 160 million do not use the Internet at broadband speeds.3 The federal government has recognized the need for building connectivity infrastructure, particularly as the pandemic shifted much of the educational system online. Earlier this year, the Federal Communications Commission launched the $20 billion Rural Digital Opportunity Fund with the goal of connecting millions of rural households to broadband.4 But it is time to start thinking of highspeed Internet access as an essential service like water, electricity, or sanitation. The federal government should support efforts to expand the financing and construction of low-cost broadband infrastructure for all, building on the Broadband Infrastructure Finance and Innovation Act of 2019.5 The future of work has no future at all if broadband remains out of reach for millions of would-be mobile workers.
Universal Occupational Licensing Reciprocity
Occupational licensing presents a significant obstacle preventing Americans from moving or accessing mobile work opportunities. Most occupational licenses are issued under the authority of state and local governments. Licensure is often required for a wide range of professional occupations, including for teachers, lawyers, physicians, pharmacists, dentists, real estate brokers and appraisers, barbers and cosmetologists, insurance agents, paramedics, and accountants. Roughly 25 percent of workers today require a state license and, more often than not, licensure is state-specific: a barber licensed in one state cannot cut hair in another without a burdensome relicensing process.6 Economists estimate that state licensure regimes reduce interstate migration by as much as 36 percent, and disproportionately affect populations that most need to be mobile.7 Since the onset of the coronavirus pandemic, this structure of state-by-state licensing has become an obstacle to public health and safety, leading to shortages in qualified health practitioners and impeding innovative business models like telehealth platforms.
The federal government should encourage state and local governments to implement licensing reciprocity. In 2017, the National Governors Association and the National Conference of State Legislatures launched efforts to improve the portability of occupational licenses for 34 occupations across 11 states.8 These efforts have yielded some victories: in 2019, Arizona and Pennsylvania enacted laws recognizing universal out-of-state licensure for qualified professions, and a handful of states have enacted state-tostate reciprocity arrangements.9 During the pandemic, several states implemented executive orders to temporarily waive licensing requirements for healthcare practitioners and allow telehealth practice.10 However, these efforts have been piecemeal. While licensing regimes are important, protecting public health and safety from potential harm, too often these regimes have served as unnecessary barriers to mobility and impeded digitalization of many professions at a time when workers most need flexibility. The federal government should spearhead an effort to promote universal licensing reciprocity; each additional state that adopts such a measure will generate manifold benefits for workers, employers, and the economy as a whole.
Portable Work-Based Benefits
Existing policies tie a wide range of benefits—including those for retirement, healthcare, job training, sick and family leave—to full-time employment. These policies are outdated in the digital economy. With the rise of digital business models and accelerated by the onset of the pandemic, more Americans need to be mobile to find meaningful work opportunities. But when benefits are tied to work, it is difficult for workers to leave their jobs, take risks, or work part-time. This system also creates particular harms for part-time and contingent workers whose jobs may not carry benefits at all. The Affordable Care Act is a step in the right direction in ensuring that workers have healthcare access independent of their jobs. Some workers, particularly minorities, value job security over mobility, and may not prioritize the portability of benefits, relative to other reforms, 11 but there is still ample room for improvement.
U.S. leaders should seek to establish portable systems of retirement, unemployment, paid leave, retraining and skill development, and childcare benefits tied to individual employees rather than solely to full-time jobs. Various proposals have been floated on how to construct portable benefits, including shared security accounts with employer prorated pay-in and pilot projects for institutions willing to experiment. Motivated by the coronavirus pandemic, Senators Mark R. Warner (D-VA) and Steve Daines (R-MT) introduced bipartisan legislation in July 2020 proposing an emergency portable benefits fund.12 Passing a permanent version of this bill would be a very good next step toward making portable benefits more broadly available.
Conclusion
Digitalization has created opportunities for more mobile, flexible work, yet analog-age policies serve as barriers to Americans seeking new opportunities. The coronavirus pandemic only heightens this tension. To knock down these barriers, the White House should create a National Commission on the U.S. Workforce that brings together governors and mayors with senior officials in the federal government. This commission should work to identify and implement reforms to support the development of the workforce, including in the areas identified above. This kind of collaborative national effort will be essential to seizing the opportunities of the digital age for workers, companies, and the country as a whole.
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Photo Credit: jamesteohart / Shutterstock
Laura Taylor-Kale previously served as deputy assistant secretary for manufacturing at the U.S. Department of Commerce. She is the co-author of The Work Ahead: Machines, Skills and U.S. Leadership in the Twenty-First Century.
1 Edward Alden and Laura Taylor-Kale, The Work Ahead: Machines, Skills, and U.S. Leadership in the Twenty-First Century, Council on Foreign Relations, April 2018.
2 Federal Communications Commission, 2020 Broadband Deployment Report, April 24, 2020.
3 Shelley McKinley, Microsoft Airband: An Annual Update on Connecting Rural America, Microsoft, March 5, 2020.
4 Federal Communications Commission, FCC Launches $20 Billion Rural Digital Opportunity Fund To Expand Rural Broadband Deployment, January 30, 2020.
5 U.S. House of Representatives, “Broadband Infrastructure Finance and Innovation Act of 2019 (H.R.4127),” introduced on July 30, 2019.
6 Janna E. Johnson and Morris Kleiner, Is Occupational Licensing a Barrier to Interstate Migration?, Federal Reserve Bank of Minneapolis, December 6, 2017.
7 Ibid.
8 National Governors Association, 10 Transformational Pathways for States, accessed on November 6, 2020.
9 Iris Hentze, 2019 Trends in Occupational Licensing, National Conference of State Legislatures, January 9, 2020.
10 Carl Sims, Occupational Licensing – COVID-19 Responses, The Council of State Governments, April 6, 2020.
11 Ismail White and Harin Contractor, Racial Differences on the Future of Work: A Survey of the American Workforce, Joint Center for Political and Economic Studies, July 24, 2019.
12 Office of Senator Mark Warner, Warner & Daines Introduce Legislation to Establish an Emergency Portable Benefits Fund, July 22, 2020.