[00:00:00] John Skrentny: There's all these folks emphasizing the importance of STEM education, and they just say the more, the better, the more STEM grads, the better. And who cares what they're doing? It's just mix them together and some magic's going to happen. And very different from old ideas of the Manhattan Project, where we're going to build a nuclear bomb. We're in a World War and we're going to do this. We're targeted toward this specific task. That's not how we do it now.
Now it's the more, the better and go out there and do some magic rather than, hey, we need clean energy, hey, we need a nuclear fusion reactor that would change the whole world. No one's talking about that. They're just creating STEM grads and hoping that they do some innovative nationally competitive sort of magic.
[00:00:57] Adam Butler: Hello and welcome to another episode of ReSolve Riffs. This one's a little different. We've been experimenting this past year with different themes and topics, and this is no exception. I've got Dr. John Skrentny, who's a professor of sociology at UC San Diego, and, the reason John caught my attention was, he was on the Into the Impossible podcast with Brian Keating, which I'm a fan of and listen to regularly, and found the topic and the conversation fascinating. And I had a few themes that I wanted to explore a little bit more deeply than Brian had gone into on his show. And so John had kindly acquiesced to coming on Riffs. John, welcome to the show.
[00:01:52] John Skrentny: Thanks for having me. I'm very excited to talk about this stuff. Obviously I spent years studying it, so to find an eager set of ears, I'm excited.
[00:02:00] Adam Butler: Yeah, let's, start with the topic that really caught my interest, which is your new book, Wasted Education. And, we were talking before the show and there it is.
[00:02:14] John Skrentny: There it is right there. Yeah,
[00:02:17] Adam Butler: … before the show about how the primary theme is the curious reality that a great proportion of STEM graduates, people who graduate in STEM fields, don't go on to work in STEM jobs. And, so I guess, is that where your curiosity started, and what motivated you to start digging into this theme?
[00:02:47] John Skrentny: It's a great question, and it shows that I've got the beating heart of a big time nerd, because it was, it's a very nerdy origin story, where probably like, most of the listeners here, most, people in North America, we have an understanding that STEM is just, that is science, technology, engineering, and math, it is just booming. it's a great major. The job opportunities are just tremendous. If you want a secure, long career, many of my students are hearing the message that a STEM major is the way to go. And that's what I always believed.
And I was, I organized a conference. It was actually on the topic of immigration, and we were comparing the U.S. and Japan. Japan famously has almost no immigrants. United States, we're the leading immigrant receiving country in the whole world. So you got two of these huge economies. Japan up until recently, before it was eclipsed by China, was the second largest economy in the world, with totally different models in terms of how they integrate people into their workforce.
And we had a scholar come, and he blew my mind with the statistic that only about a third of STEM grads are in STEM jobs. And then he went on to talk about the H1B visa and different visas to get to the United States and blah, blah, blah. It was a sideshow, really, that statistic, that the majority of STEM grads are not in STEM jobs.
But I sat in the audience, I was like, whoa, wait a second. Why is that, and I had to know. I had to find the answer. That's what I mean about the beating heart of a nerd. Like you just get this thing, and you want to know the answer. And I just spent years studying it and trying to figure out every possible hypothesis, and kind of, and eventually coming on to the idea that it's a mix of different factors that lead STEM grads to go do something else. And throughout the book, I basically had the working assumption that there is a shortage. And then I asked, okay, if there is a shortage of STEM grads, and that is in the United States, that's the leading rationale for why we need more STEM education.
If there is a shortage, what are employers doing? And, are they behaving in ways that would fit with the hypothesis that there's a shortage? And time and time again, what I would find, is that employers are not behaving as if there's a shortage. So I leave it up to the reader to decide whether employers are being dishonest. I don't think they necessarily are, but their behaviors don't match the notion that they're is a great scarcity of STEM grads, and so the big argument of the book is that STEM grads can find better jobs, better lives doing things other than traditional STEM occupations.
[00:05:49] Adam Butler: Yeah, I'm intrigued by the fact that it was a Japanese speaker, or a speaker discussing the situation in Japan, that first triggered this data point. And so is the same true in Japan? Do the STEM graduates go on to persistently work in STEM careers, or is the dynamic the same there?
[00:06:13] John Skrentny: Oh my gosh, we're five minutes into this and you asked a question I don't know the answer to. I do not know. That is a great question. I focused on the United States because the United States spends literally billions of dollars a year trying to get more students into the so-called STEM pipeline, and then the majority, there's a lot of different ways we can measure a STEM job.
What is that? And, there's different statistical services that have different results, but pretty much all of them show that the majority are not in STEM jobs. That's a great question, Adam, about whether or not, how Japan looks, and I do, I talk a little bit in the book about differences in Europe, and it would be, that would be a great follow-up study to see if we see this mass leaking from the so-called STEM pipeline at the stage of employment. Would love to check that out for the, for right now. Yeah, competitiveness between countries.
[00:07:08] Adam Butler: We know, at least anecdotally that China has been investing massively in STEM education and infrastructure to support employment innovation. I think, if China's not number one in patent filings, they're number two and are climbing regularly each year, right? What are we seeing, the same kind of dynamic in the U.S. which was the leader in innovation and a proxy for measuring innovation, patent filings?
[00:07:48] John Skrentny: So this is a great question, and one of the things I did in the book, some of this ended up getting cut in the final version, but I did a pretty deep dive into the sort of history of, I've already mentioned the shortage rationale for investments in STEM education. We're now talking about the national competitiveness rationale for investments in STEM education. Long history of that, Adam, it goes all the way to the cold war when it became a crude measure of how the U.S. was doing in terms of its competitiveness with the former Soviet Union. And they would just simply say, how many engineers do they have? How many engineers do we have? And how are we doing?
And is this, are we getting closer? And, now that switched to the U.S. and China, the U.S. and, compared to the rest of the world, different averages. Student’s performances on various aptitude exams is another thing, and there's some critique of this, that simple numbers doesn't tell you about quality. It doesn't tell you about what they're actually doing, which is what my book is about. You can get all these STEM grads, but if they're doing other kinds of things, then they're not really building national competitiveness in a way that we might be. Normally defined as national competitiveness.
So there's a long history of using the number of STEM grads as a measure of innovation. And one of the first things that I really wanted to understand was, STEM is a very broad field. Does anyone really know what are the fields that are most likely to innovate? What are the fields that are most likely to have a patent? What are the fields that are most likely to have a patent that actually creates jobs? There's a lot of different ways to look at this, and people simply don't know. They can look at patents, they can look at the number of STEM grads, and these are pretty crude measures, I think, of how competitive an economy is.
I'll give you one example. One major area of innovation in the United States is sadly, from my perspective, other folks might have a different view, but they call it ad science or data analytics related to advertising. And I have a quote in the book from someone, a STEM worker who said, he said, the greatest minds of my generation are trying to figure out how to get people to click on ads.
And he said, that's pretty sad. And we could look at national competitiveness and innovation, and if we're putting huge amounts of resources and figuring out how to track people on the internet to sell them ads, and get them to click on things, and monitor their online behavior, that might not be the kind of competitiveness that someone looking at how the United States is doing compared to China or something like that, would really care that much about. So there's a lot of different ways that…
[00:10:42] Adam Butler: A complicated question I think you're getting into, that's a larger growing proportion of the service economy. The service economy is the large and growing portion of the overall economy, dwarfing the sort of goods economy these days. And so it's certainly, it does prompt the question whether this is a strategic imperative, if we had sat down and thought through what would we want our STEM grads to be doing in furtherance of making our country a better place? Is this where we would want many of them to focus their time? I suspect we may come to a conclusion that we wouldn't, but here we are.
[00:11:25] John Skrentny: Exactly. Can I just address that real quick? I love that line of thinking. I was a double major in sociology and philosophy. So the ethics of all this stuff, that, the big questions were always in the back of my head. And so I did include a chapter, STEM Education for What? And generally when you look at what I call the, this sounds kind of corny, but what I call the STEM Education Industrial Complex, the philanthropies, the government, the companies, the American Academy of Arts and Sciences, the National Research Council, there's all these folks emphasizing the importance of STEM education, and they rarely address this question that you and I are talking about right now, which is what we want them to be doing. It's rare, and, you're absolutely right. Generally they just say the more, the better, the more STEM grads, the better, and who cares what they're doing? They're going to innovate.
It's, I wrote one paper once on the alchemy of innovation. It's just mix them together and some magic's going to happen. And very different from like old ideas of the Manhattan project where we're going to build a nuclear bomb. We're in a world war and we're going to do this. We're targeted toward this specific task. That's not how we do it now.
Now it's the more, the better and go out there and do some magic, rather than hey, we need clean energy, hey, we need a nuclear fusion reactor. That would change the whole world. No one's talking about that. They're just creating STEM grads and hoping that they do some innovative nationally competitive sort of magic. And generally they don't do that, for reasons that I would love to talk to you and your listeners about. The investments are much, much safer and better if they go into software. I mentioned that basically software developing is the 800 pound gorilla of the STEM workforce.
Half of all STEM grads in America work in computers in some way and software development is a major way. And part of the reason for that, there's two reasons for it. Basically every company needs computers. Every company has an online presence. Every presence, every company is doing something with computers. They need computer scientists. They need people doing this kind of work.
So it's not a silo in the economy, it is a silo. You got tech companies, but it's also a band across every company. Petroleum companies are hiring data analytics and computer science people. There's, AI is massive now. That's the huge thing that was happening, just when my book came out in November of 2023.
And you've got the smart money is in software because you don't have to have a factory. There's no, generally in business, there's these ideas of sort of product uncertainty, and then market uncertainty. Product uncertainty is whether the product actually works, and market uncertainty is whether there's, whether it's going to sell. And with software, you can show that it works really easily. It's not a new battery that doesn't rely on rare earths that China has almost all the market of. It doesn't require a factory. It doesn't require a new factory that has never been built before. Software is just a smart investment.
You get massive, if it hits it big, it gets massive returns, and remember, Instagram was purchased for a billion dollars. It had 11 employees back then, So you've, if you can, if you're in that space, you can get massive returns with low risk, and so the, money just keeps going into this area. And AI is the new thing. Everyone thinks they need AI. There’s a manufacturing component there with the kinds of chips that you need and that sort of thing. But the investment drives the STEM workers into these fields that don't necessarily make the world a better place.
If you're a parent out there and you're listening, you might be worried about your kid on social media. You might be worried about your kid on computer games, stuff like that. That's where the, a lot of the smart investing goes, the STEM education, for what, there's really no one driving the car here. It's just investors looking for returns, and, right now the smart money is on software, fintech, things that don't have any kind of manufacturing component to making money.
[00:16:02] Adam Butler: Yeah, industrial policy has been a bit of a dirty word for several decades in the U.S.. Obviously places like China, very top down command and control, the vast majority of the economy is driven by various strategic industrial policy investments. And so there's clearly a, there's a demand side of the command and control Chinese style, where they know there's going to be investment in industries that are going to demand people with certain skill sets. And then they set about training people with those skill sets, and then putting them to work five years later in the infrastructure that has been built in investment, and to cultivate the industries that they prioritize, right?
We've got a little bit of that, with the CHIPS Act, et cetera, in the U.S. lately. But there was several decades of basic neglect, and we're going to leave things to the markets to decide, and of course the markets decided that the areas with the highest return on investment were software or platform related, where you've got either kind of Metcalfe's Law leading to network effects and profound moats. Once you cross the Rubicon and you got a sufficient percentage of total users in your niche, then Metcalf's Law will dictate that no one else is gonna be able to catch up, right? You've got Google Search, Facebook, Instagram, Twitter, LinkedIn, all with their niches, right?
And once you reach a certain threshold, it's just very, almost impossible to break that apart. And on top of that, you've got addictive tech. The most profitable high margin business is in selling things that people become addicted to. And, so there's obviously a whole complex in fast food, a whole complex in pharmaceutical, a whole complex in social media, et cetera, that are driven by that. And so the, we're way off topic here now, but, I definitely think that there's just some perverse incentives that are driving things off track.
[00:18:22] John Skrentny: Let me say though, Adam, I don't think we're off topic at all because the book is trying to understand why so many STEM grads don't work in STEM jobs. And I think this is part of the reason if you're millennial, Gen Z, whatever labels they're putting for the new entrance into the workforce. Some of them might be concerned about such things as climate change, or developing better plastics, or things of that nature. And if the job opportunities are in surveillance capitalism, as it's called sometimes, that is tracking people on the internet, or ads, are maintaining these platforms, or trying to maintain basically monopolies of various kinds, they might not be too excited about that.
And so I do talk about folks. I pick on Facebook a little bit because they're, they had some of the more egregious examples of workers saying, wow, we are working for a company that makes money the more people are engaged with the platform, and they're doing things to keep people engaged with the platform that don't feel right ,and might even be associated with violence, or associated with propping up certain regimes. I quote a Facebook worker who, when she quit, she said, I felt like I had blood on my hands because I was working hard for a company that was doing this thing where engagement equals enragement, and basically stoking fires of anger in order to make money, because you can sell more ads. The more people use the platform, the more ads you can sell, the more money you can make. And so it all makes perfect sense from that standpoint.
So that is part of the angle of the book, is that if the opportunities are in places where people don't feel that good about it, they might leave STEM and go do something else.
One of the interesting stories that I tell in the book is about some companies that are the, sort of the high road companies in terms of training workers. A big theme in the book is about how if you're a STEM worker, you're going to be on the STEM skills treadmill for your, basically your whole career, where you have to constantly update your skill set in order to just to stay in place, and what you have is, some firms in some areas are actually doing a pretty good job of training their workers. Most don't, they'd rather just buy workers who already have the skills that they need, and those are in areas where workers don't necessarily, STEM workers don't necessarily want to work.
So for example, petroleum companies. Royal Dutch Shell is a high road company in my book because they were having to train workers in data analytics and various advanced software development kinds of skills, because workers didn't want to work for an oil company. It just had a brand to them that suggested oil rigs, and being dirty, and making the earth maybe less habitable. And so that spurred them to train their workers. There's, what the STEM companies are, or the employers of STEM workers are doing, I think is relevant to the question of the book on whether STEM workers decide, yeah, I think I'm going to go do something else.
[00:21:49] Rodrigo Gordillo: Sorry to interrupt, but I did want to take a quick second to remind listeners that while we do absolutely love providing our audience with world class guests and weekly investment insights, we wanted to remind you that we actually do our best work outside of this podcast, and we try to do this by providing cutting edge, globally diversified, and systematic investment strategies that are designed to be broadly non-correlated to traditional equity and bond portfolios.
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[00:22:32] John Skrentny: One final point on that is that one of the, it's not industrial policy, it's more of a kind of strategic investing from tech billionaires, Bill Gates, Jeff Bezos. They made their money in the tech economy, but they are putting a lot of money in clean energy. And so they're doing a lot of sort of stuff that, for workers who care about that sort of thing, might lead to a more satisfying career in science, technology, engineering, and math, if it's developing more efficient solar panels, which are actually quite inefficient.
If you can figure out a way to amp up the efficiency of those, you can do really well. So you got these tech billionaires, not industrial policy, but strategic investing, with the kind of moral compass, and they're creating more opportunities for STEM grads who don't want to do that stuff. And I'm not criticizing in any way, people who work for Facebook, or any of these companies. Some people just, some, a lot of STEM grads just really love the puzzle of the work that they're doing, and they won't be, they don't really care what it's about, to be honest.
[00:23:34] Adam Butler: Yeah. So let's go to the heart of the matter. Is there a demand, side of this equation that lives up to the hype, in terms of all of these organizations that are trying to drive people into STEM? Is this equation in equilibrium, or are we overstating the importance of STEM grads?
[00:24:01] John Skrentny: I think that the STEM, the labor market for STEM grads, I wouldn't say it's broken maybe, but it definitely has problems. So there's a chapter in the book called Burn and Churn, and that is a quote from a tech CEO who told me just openly that, without any sense of concern or anything. I admired him for that. Really, he said, yeah, we hire young STEM grads and then we burn them out and churn through them. And then we hire another batch of young STEM grads, and we avoid having to pay high salaries to senior workers by doing that. And we keep the blood fresh, and that's how we, that's how we do things.
And that suggests an image of you got to keep shoveling coal into the fire, to keep this ravenous burn and chur, employment engine going. Whether you think that it should be doing that is another question. But if you want to just keep creating, fuel really hard driving kinds of management techniques.
I just spoke with an aerospace engineer who told me that SpaceX is doing this amazing work. And this is what he said. I'm not claiming this is true. This is what I heard from an aerospace engineer, but his understanding was, Elon Musk is driving people really hard and they're focusing on younger workers and people who don't have a family yet. People who don't have to worry about their children. People don't have to worry about, to read them stories at night. They can focus on improving their skills, because their skills needs are always changing and that sort of thing. So you have this situation where you have these employers who they just, they need to keep feeding the beast.
And the schools and the philanthropists, the philanthropies and the government are doing their part to give them what they need. But whether or not we should be doing that, whether or not we should say, hey, you're a partner in this as well, our return on investment of STEM education is pretty low if more than half, some studies show more than two thirds of STEM grads are going to do something else. That's where the book gets into kind of a policy question, and whether or not we want to just keep producing as many as we can, the more, the better?
[00:26:38] Adam Butler: So somebody that's working at a sort of classically non-STEM company like a consumer firm or something like that, but that is developing software, or in product development, perhaps for those companies presumably they're still counted as people that are working in STEM, for the purpose of this type of study.
[00:27:03] John Skrentny: That's a great, that is a great question, and I spent an enormous amount of time trying to address the question of what exactly is a STEM worker? Now in the United States, you've got different approaches to this. One, in the one that I rely on the most is the National Science Foundation, which oversees, these surveys. I mostly use the National Survey of College Graduates, and they basically list all these STEM occupations, software developer, chemist, biologist. There's all these different materials, engineer, various flavors of engineer, and those are what I call the traditional STEM occupations. Those are the ones that supposedly are facing shortages.
Now, then you have another category of jobs, in which the survey asks workers, does your job require a Bachelor's level or higher in a STEM field, basically. If you do that, then you have a much higher retention of STEM grads, and these are, these can include Managers of STEM workers. It could include people doing finance, frankly. Several of my closest friends took their degrees in theoretical physics and math and went to Wall Street, and are they STEM workers? The National Science Foundation occupational definition would say, no, they're in finance. They're, doing quantitative finance. But are they using STEM skills? Yes. So, that's where things get a little bit tricky. And if you use the National Survey of College Graduates question about do you use college level or a greater STEM expertise on your job, then the retention is more than half, so that looks a little better.
And I treat that very seriously. I ended up getting cut from the book, but I think it's helpful to think of STEM job as a continuum, where you've got like really hardcore STEM jobs that are definitely STEM, no doubt about it, chemical engineer, for example. And then you go into this continuum, where you start to get to management, and then people are using less and less of that STEM expertise, and just using people skills and management skills and things of that nature.
So there's, I think it's a false dichotomy STEM versus non STEM. But that false dichotomy drives the narrative and a lot of the STEM mania, I call it, the STEM education industrial complex, because they keep propounding this fiction that there is this massive shortage in STEM jobs, and they keep just focusing on those traditional STEM occupations. So I, there's a lot of job opportunities for people with a STEM major, but who can, who then want to go do something else, and these kind of hybrid-y sorts of jobs.
[00:30:08] Adam Butler: I can imagine that there would be a way to quantify the time spent in STEM-type work, right? So whatever, 50 percent of my time on my job is spent doing work that required a STEM degree. The other 50 percent is people management, or what have you.
[00:30:35] John Skrentny: And unfortunately, we don't have the survey tools to do that. It would be great to get a grant and kind of figure that out, follow a bunch of people around and see. You can do these studies where you have people get randomly notified, what are you doing now? Tell us what you're doing now, and you could ask them, are you using Bachelor's level or a higher STEM expertise right now on your job? And, or, are you not, we don't have data like that, but I think that's a great way to think about things.
Someone pointed out to me that, I'm in academia, is the Department Chair of the Department of Physics a STEM worker? They're writing personnel files. They're making sure there's enough people to teach the classes. They're not really, they're the Chair of a Physics Department, but are they really a STEM worker at that point? Probably not, by the measure that you're talking about. So things do get a little complicated when we discuss these things.
I tell the story in the book about some of my neighbors. San Diego is a major biotech, biopharma, life sciences hub. And so a lot of the folks around this house right now are working in those fields. And if you, some of them have PhDs in biochemistry, and cell biology, things of that nature. You ask them what they do. One guy up the street says, I'm in quality assurance. What's that? So he goes around the different parts of the company and examines their clinical trials, and then meets with people to make sure the clinical trials are working properly. So that requires some stem knowledge, but a lot of his job is, doing management, and making sure everything’s, the trains are running on time, and that sort of stuff.
So things do get a little complicated, and I will say right now, to make sure that I get it out there, because I think it's really important for anyone who is contemplating a STEM major, is a STEM major, has a child who's contemplating a STEM major, or is one, I think that the best advice to give them is to pick up non-STEM skills, that is the ability to communicate, the ability to think critically, the ability to work in teams, the ability to communicate in writing, and orally. There's all these kinds of things to understand, that sometimes there's no one right answer. There's some answers that are better than other answers. I've noticed some of my engineering students in sociology classes struggle with that idea. There's this whole panoply of skills that are not technical STEM skills, but if you are a STEM worker, will prolong your career and allow you to make a moves into management, and to better paying jobs.
The irony is that these STEM employers who say that there's a great STEM shortage, they pay their managers more than their technical workers, so they incentivize moves into these jobs. That's become a mantra for me when I talk about these things that it, I'm not saying STEM degrees are bad or a waste of money. I'm saying you will go longer and farther and make more money if you combine technical skills with these non-STEM skills.
[00:34:03] Adam Butler: Oh, that's…
[00:34:03] John Skrentny: I did want to get that out there.
[00:34:06] Adam Butler: I was saying beforehand that one of the reasons why I was motivated to have this chat is because my eldest daughter is doing Chemical Engineering. She's in second year at University of Toronto, and she was not particularly passionate about engineering, wasn't particularly passionate about wanting to be an engineer, even wanting to be in sciences, other than she didn't, she did quite well in the sciences in high school ,and she knew she didn't want to go into arts, and she didn't have anything else she was particularly interested in or passionate about. So I said, the great thing about engineering is it's a degree in critical thinking and problem solving, and until you do discover what you are really curious about, or want to make a difference in, or what have you, then maybe engineering provides you with the greatest amount of options, right? How would you guide her in terms of looking for career paths in STEM where she's likely to be able to sustain the pace, the energy, the not be disillusioned, right? Is there, are there any secrets there to maintaining, sustaining a career in STEM?
[00:35:25] John Skrentny: It's a, that's a fantastic question, Adam. I should have put that in the book, now that I think about it, but I can extrapolate some of the findings in the book to answer that question with some degree of foundation or basis. One is that I do talk a little bit about age discrimination in the book. For reasons I do not understand, academics, the government, philanthropies, they're not really funding research on age discrimination. So when I looked at that, I had to rely on a lot of journalistic articles that talk to people, and a few, some examples of some survey data on that, but it appears to be the case that, if you want a long career in actually doing STEM technical work, look for a company that has workers from a whole range of ages. That is one thing that I would do.
The other thing is that some companies will have two tracks for advancement in STEM. One is the one that I've been talking about, where you go into management, where the big money is in management. I like to make the comparison with the National Basketball Association, the NBA. In the NBA, players who have the analogous technical skill of how to play basketball, they make way more than the general managers, way more, and typically, and that's sort of the NBA saying this is, our most valuable workers are the actual players.
In almost every American firm the managers make more than the technical workers. Now there's some firms, and I would suggest to your daughter or anyone who's working in this area and looking for a long career, there's some firms that will have management tracks, and technical tracks, so that you could be, you can move into a kind of senior engineer and they can give you different kinds of fancy titles. And maybe you're doing more complicated projects, but you're still spending most of your time, that, you had that great point about how much you're spending your time doing technical work, and that your, incentives are to continue doing excellent technical work.
And there's some places, some firms which do this, which do this really well, and you can sustain a career in a technical kind of field. But not all of them do. And so that's something that, you might want to look into. So it's a little complicated, because most workers move around a lot of jobs, but it's just something to keep in mind, job hopping.
I do talk about that, that one of the major ways that that employees increase their salary if they don't go the management route, is to just keep job hopping. So it's, if it's a different strategy to take, it's a little disruptive. If again, if you have a family, it might be a little bit harder to do that.
[00:38:22] Adam Butler: Yeah, John, I would hypothesize, I'm curious whether or not you'd you see merit in this, but I'd hypothesize that if you are a competent technical person, you went through it, a highly technical program, you started in a technical job, there's going to be some meaningful proportion of people like that who actively don't want to do management, and it may actually be a majority of them. And as a result, you've got to pay managers more than technical staff because they require more compensation in order to move out of their technical field where they're, where they would prefer to operate on a day to day basis, than move into a management role. Do you think there's any merit to that?
[00:39:15] John Skrentny: That's an interesting idea. That's why I love talking to people from diverse fields, because you come up with ideas that I wouldn't have thought of. I would say that that makes some sense, and I spent some time talking in the book about engineers who wanted to keep doing engineering. They were, they saw that they were in a career dead end. They moved into management. I think I quote one of the engineers saying, I was crying all the way to the bank, making all this money, but not doing the work that I really wanted to do.
[00:39:45] Adam Butler: And…
[00:39:47] John Skrentny: Here's the thing. I have never seen a study or even a journalistic article about a shortage of managers. They're just, we, they just…
[00:40:00] Adam Butler: Yet, the proportion of people that opt, work in management or administrative type roles in the economy has grown by orders of magnitude over the last 20, 30 years.
[00:40:16] John Skrentny: Yeah, and so the incentives are to do that. And there's a large number of positions available with that. I just haven't seen anyone talk about a shortage of engineers as a policy problem, as something that philanthropy or the government or schools need to do better. Instead, everyone's wagging their finger at universities like mine saying, give us more STEM grads, not give us more competent managers.
[00:40:42] Adam Butler: So is it in your view that we're not graduating enough STEM grads, or is it that there's just a strong preference for new STEM grads over more mature STEM grads, and therefore, more mature STEM grads may have stale skill sets. There's not an obvious channel to upgrade your skills. And those people get, they grow away from the STEM field by virtue of just not having natural opportunities to upgrade, and if industry and if industrial policy were to facilitate more natural kind of retraining, skill updating, that would to a meaningful degree alleviate the shortage.
[00:41:42] John Skrentny: That's an interesting question. I, what, one of the things I do discuss in the book when I'm talking about the sort of STEM skills treadmill is that, if companies are not providing the training during company time, that means that workers have to train, self-train, or even if the company's paying for it, they have to do it on their own time, and again, if they have kids, if they have families, if they have elder parents they have to take care of, this can be a challenge.
And sometimes people say things, and I just never forget it, and I ended up using this. It was something I found on the internet. It was a quote from a STEM worker who said that in order to stay up to date in his field, he's basically drinking from a fire hose. He talked about how he has to do it on his own time. He's, there's a lot of great training opportunities on the internet, for free. He said he watches videos at heightened speeds so he can get done faster. But among workers who are doing this, a lot of them just, they get, tired.
It's when you're, when you have to re-up yourself, it gets, tiring. I give you an example. I just got the new iPhone and an Apple watch here, and I was looking into using Apple Intelligence and I'm like, when am I going to have time to learn how to use all these Apple intelligence tools? Can I find a quick video on that? So if that is your job to do this super advanced stuff and it's changing really quickly, it's going to be challenging.
There was a great study that showed that workers leave STEM jobs the fastest when the technical requirements of those jobs change the fastest. That's when people, workers say like, they mix martial arts. They tap out. I love that metaphor. They tap out, like I can't do this anymore, and because you're just constantly having to re-up yourself. And the interesting thing about this study I cited in the book, it was the stronger workers who left. They were, they saw the writing on the wall and they were like, whoa, wait a second, this is, it was, a lot of it was in software or really software-heavy business kinds of jobs, like in logistics and things of that nature. They were the ones who tapped out and said, I got to do something else. And, they might go on and get an MBA, or something like that. So they're not forced to do all this training, especially, on their own time.
So there's tricky things here about I've got a 401(k), or in academia, it's called a 403b. I want my investments to grow. That's misaligned with what our workers need. From an investor standpoint, I don't want a company that's investing in workers and helping them keep their skills up to date, and treating them like an asset and not a cos, and this sort of thing. I want shareholder value too. As from the country perspective, from the worker perspective, from the perspective of having strong families, that kind of burn and churn, we're not going to pay to train you folks. Figure it out yourself. If we can't find workers, we're going to outsource.
That's another thing that smart companies will do to save money, but isn't necessarily good for STEM workers. There's a kind of just a misalignment there and it's hard, it's tricky. That's why it was interesting to study how all these complex systems work together or maybe don't work together so well.
[00:45:35] Adam Butler: Yeah, from a policy standpoint, one of the major motivations for immigration policy is to bring in new first generation immigrants who typically are coming from a less economically supportive jurisdiction. And arrive being keen, willing to work for a lower wage to get on their feet in a new country, et cetera, which of course undermines the existing labor force, and makes it harder at the margin for everybody. So there's a trade-off there. I'm wondering about, how you think AI might change the balance, specifically within the STEM field. Have you given that some thought?
[00:46:29] John Skrentny: Yes. I communicate a lot with a former computer science professor who left academia because his AI skills were just so much in demand in industry. And he can work in all kinds of tech companies, finance, wherever his skills are so in demand. And we're, we just don't know yet exactly how this is going to play out in terms of AI automating jobs, reducing the number of jobs, increasing the productivity of jobs.
It's really too soon to see, but so many, there's been so many predictions of employment cataclysms that come from technology, that just don't actually pan out. The most famous study was all these folks thought that the automated teller machine, the ATM was going to eliminate bank tellers, and it didn't. I can go down the street to Citibank and there's going to be some people, maybe not a huge line there to use them, but there's still bank tellers. And what companies did was they thought, let's have our bank tellers do expanded things, if they're not just cashing checks all the time. So that's something that companies often do, is that they use the technological development as a way to enhance their existing employees, and if AI develops in a way that it can write software code, which apparently it's…
[00:48:05] Adam Butler: It's exceptional at, yes.
[00:48:06] John Skrentny: Yeah. maybe that'll free up software developers to do more complicated tasks. That is tricky. I just don't know how to think about that. I don't think anyone who's going to make any big predictions has much basis for saying that, but there are threats to, certain jobs are more likely to be outsourced. Certain jobs are more likely, certain tasks are certainly more likely to be given over to AI. It's hard to know. It's hard to know. I feel, I gotta say, Adam, I feel sorry for my students today. The world is so much more complicated and so much faster moving than it was when I got my degrees, and being able to put all your chips on some career is a huge bet that could go badly, and which is why I say develop a wide variety of skills so that you can plug and play into a wide variety of jobs.
[00:49:03] Adam Butler: Yeah. I keep guiding people who touch base with me for advice to be prepared for adaptation and change, right? That just the ability to adapt, to grow, to retrain, to maintain that sense of curiosity and motivation, I think are going to be, are going to be critical, and it has been fascinating to see how the AI develops.
I think for a long time, we felt that the blue collar or industrial jobs were going to be automated away before the PhDs, the medical diagnosticians, the lawyers, et cetera. I just, I literally just saw before we came on a study just released today, from OpenAI where they had a sample of several dozen complex, medical case files, and they gave the case files to the doctors, and they gave case files to their newest o1 model. And the case responses were, and not just the responses, but the product methodology that was brought to bear were evaluated by two expert medical diagnosticians, like, physicians, and I'm going to get the exact numbers wrong, but I think the doctors who evaluated preferred the AI model’s methodology and diagnostics to the human doctors, 8 to 2, or 4 to 1.
And it's just it's remarkable, the new o1 models exhibit PhD plus and it's, they're exhibiting this skill set in areas where you would traditionally have thought well, these are going to be the last to be captured, right? It's like theoretical physics, applied math, applied chemistry, notwithstanding law and these other types of professions, which I think are a little bit more intuitive, to see how we can automate away a lot of those tasks. But it is remarkable, anyways, to see the direction that AI has taken and the types of intelligence that it does take on.
[00:51:35] John Skrentny: Can we, I want to make two comments. This is going back to the question about people planning their careers, and what is a safer career versus another career, especially with these technological advancements in AI. I want to make the claim that there's AI threats to certain jobs and, but there's also kind of cultural threats that are related to certain jobs.
I'll start with that one because it's a little bit more complicated. I visited a tech company that, they were looking for a user experience designer, the person who does the interface with the actual user of the technology. And what I mean by culture was the COO of this company didn't want to, they kept losing their user experience designers. And I said, why don't you pay more? And they said, this is a user experience designer. I'm not going to pay above a certain amount for that. They had this idea that you just don't pay that much for that. The backend people who are looking at how the app interacts with the cloud, that's the complicated stuff. We'll pay a lot for that. User experience designer, we're not going to pay a lot for that. So this COO said I'm going to outsource this job…
[00:52:54] Adam Butler: Right.
[00:52:54] John Skrentny: … and did some research. Where's the best country, the best low wage country that can do our user experience designing? And they found when they outsource that job, so it was a kind of, it, supply and demand is supposed to, if there's scarcity, you raise the wage. That didn't work in this case. It created an innovation to get around it. So that's, it's hard to predict where those threats are going to be, but I think it's certainly the case that there's certain jobs that have a sort of cultural understanding.
There's certain, there's companies like PayScale that kind of show the age, the salary ranges for different kinds of jobs. I don't think that's a measure of scarcity. It's this kind of idea that certain jobs should be paid more. And then you've got the AI threat. My understanding of the major threats here, are jobs that have a kind of template mentality, which is reading, like a radiologist reading CAT scans or MRIs. If it looks like this, then it is that. Those jobs, a tax preparer is another one. Oh, you have these kinds of situations with your income. If it looks like this, then we do that. If the job is template-y, it has more of a threat of being automated by AI.
[00:54:17] Adam Butler: Yeah.
[00:54:18] John Skrentny: All these language models and this sort of stuff, that's easy, it's easier to do, one cognitive scientist told me, than it is to develop a robot that can fold a shirt.
[00:54:28] Adam Butler: Yeah.
[00:54:29] John Skrentny: It's easier to automate away the radiologist with an MD and years of training than it is to automate away the person at the dry cleaners, or something that folds a shirt.
[00:54:43] Adam Butler: Yeah. Now they're using the same transformer tech, and reinforcement learning to train robots in the same way, just through example. Yeah, and it's tricky because every, shirts are different, the sleeve length, there's all this sort of stuff. The robot is like, I don't know what to do with this. It paralyzes.
[00:55:05] John Skrentny: Yeah, so it's tricky. And again, I'm, it's tough to think about your careers that, the new book, if I may plug the new…
[00:55:14] Adam Butler: I was just going to ask you.
[00:55:43] John Skrentny: Yeah, it's about how universities can, especially research universities, can maintain relevance and add value in a world where the job requirements are changing so rapidly. And so I'm writing this book with Mary Walshok, one of my colleagues here at UC San Diego, and she came up with the kind of way of thinking about how universities were typically seen as launching a career. But the increasing problem is how do you sustain a career?
And so what we've been identifying is, some forward looking universities which develop these non-degree kinds of educational programs, non-degree credentials, like a certificate, that just top off your skills, needs a little bit or help your skill, or up-skill into a particular area that where the demand is, if your skills have to use, if they've just fallen out of date.
And so, we've gone around the country and we've visited different universities that have, we're really fascinated, the kind of regional specialties, that kind of target the regional economies. So University of Texas is one of our big heroes, because they have all this stuff in petroleum engineering, which helps workers top up their skills when they need to learn some of the stuff about data analytics, that's changing petroleum engineering.
The University of Michigan has, in their engineering school, they have this branch called Nexus that has this kind of training for workers in, University of Michigan is right by Detroit Mobility. They call it the electrification of vehicles, self driving cars. Right now, EVs are going on a little decline right now, or a slowing of demand, but the writing's on the wall that this is going to be a growth area. If you're an expert in catalytic converters, or, you might want to think, I should probably develop some expertise in an EV as well.
Atlanta, Georgia Tech is an amazing university where they have great kinds of lifetime learning sort of opportunities for people involved in the defense industry. Atlanta has a lot of defense industries there. It's a big logistics area, a lot of technical stuff happening in the logistics field. If you want to learn about radar, what's happening with radar, the latest technology, Georgia Tech has some programs for you.
So you've already got this kind of foundational learning from your Bachelor's. Maybe you added a Master’s to that, but maybe there's an area of technical skill that you haven't quite mastered. And universities, especially research universities that are in tune with what the cutting edge is, they can provide these things, hopefully at a low cost, hopefully in a way that you could integrate into your normal workday, so that you can not just have your career launched by a research university, but sustained by a research university through these tools, through these kind of educational programs that you might go back to several times in your career. So that's one of the things that we're working on. It's a different way of thinking about universities. A lot of this is happening already. People don't know about it, hence the idea for the book.
[00:58:42] Adam Butler: No, I think it's really critical, and I was going to let you go, but I did want to ask one more I guess nebulous question, because, we're constantly craving people with technical expertise, right? People who know how to do things, and I've been thinking for a while that what we may be lacking are people who think about what things are worth doing. There seems to be a, have been over the last 20 years, a de-emphasis on the humanities, and I'm wondering, as AI's get more proficient in technical areas, as robots get more proficient at acting on the world, and automation begins to really get a foothold in a much broader array of industries, whether the skill set that may be most in demand are people who can identify where the big opportunities are, where to direct investment and technical expertise, and people who are thinking about whether this is a general direction that we want to move as a society, or as a broader humanity. Is that something you've given some thought to?
[01:00:14] John Skrentny: Yes, I always feel a little self-serving. Again as a sociology and philosophy major, I don't want to look like it's pleading for the relevance of some of these fields, but I think you just made an excellent argument that if you're only doing technical, or if you're only putting your energy into your technical stuff, and when you're in college, you treat your humanities courses as just an afterthought, something to get done, I would say you're selling yourself short, in terms of your career longevity, but you're selling your country short as well, and maybe investors, to be able to understand these big picture sorts of things.
How these different things are interconnected is a valuable skill to have, and it requires a kind of nimbleness of mind, that students pick it up over the course, over several courses, they might not even be aware of it. But I would say that you take a wide variety of courses, including humanities courses. You don't just blow them off. You treat them seriously. You develop these skills. You change. You don't just get a Bachelor's. You don't just get a credential. You change. And you change in the way that you think. You change in the way that you evaluate ideas.
And I, maybe some of your listeners can relate to this. I grew up in a kind of blue collar town and not everyone went away to college. And I could go back to my hometown and meet some folks who maybe just went to a community college or something like that, or maybe they went into the workforce. You feel different after you've gone to college. And again, sounds self-serving. I'm a university professor, but I do think that this exposure to a wide variety of ideas, it expands your thinking in a way that can be useful for doing exactly the kinds of things that you're talking about, a kind of way of thinking about saying, hey, wait a second, this isn't really something that we should be doing, or this is only going to work for a short time. It allows a kind of strategic thinking that I think will advance your career and advance national competitiveness, whichever country you're talking about.
[01:02:45] Adam Butler: Yeah, I agree. Fantastic. again, I've been talking to Dr. John Skrentny, who's a professor of sociology at UC San Diego, specifically about his relatively recent book, Wasted Education. John, what's the title of your new book? Have you got a working title?
[01:03:03] John Skrentny: We do not, that's a great question. We, for the grants that we got to do the studies, we talked about focus on the U.S., America's shadow training system. And we like that idea because people don't know that universities are already performing these kinds of things. But we're not too crazy about the idea of saying it's in the shadows. It makes it seem a little like skulking around. It might have a negative connotation. Yeah. Hey, you might want to edit this out, but I'm curious about your background. You're in quantitative finance. What was your background and to move? Quantitative finance is an area that changes quite rapidly. You're probably using AI. How did you make that transition?
[01:03:53] Adam Butler: I started, I got into college in engineering, and realized in, during frosh week that they just weren't my people, and I steadily moved from physics through biology into psychology. And I had gone through university initially wanting to be a physician, and discovered finance in year three, and ended up winning a couple of trading online, because the online trading was just coming of age and the late nineties, ‘97, ‘98.
And so I ended up winning a couple of trading competitions and then I levered those wins into a job on trading floor, and went there. But I often say, and actually I'd be curious whether you also perceive this to be true in any way, that I always felt like my psych degree was a degree in applied statistics, and that in the end, I wanted to go into psychology to understand the mechanisms of the mind.
And, but I found that the psychologists were maybe a little bit overzealous in their focus on applied statistics. I always felt a little bit like they were leaning a bit too heavily in that direction, in an effort to be perceived as more scientific, and it wasn't really necessary.
So anyways, I ended up getting a really good background in applied statistics as a result of my psych background, which is what I brought to bear in my work in quantitative finance. But then I had to do quite a bit of training, CFA and CAIA, and I went to the school for a year and learned programming, that sort of thing. So, there was a sort of postgraduate arc that led to where I am, but I would say that my path was very convoluted.
[01:05:51] John Skrentny: It's a common strategy, but I like the way you did it, where you established these kind of foundational skills. I think applied statistics is one of the greatest kind of STEM skills to have. It's useful in so many different jobs, so many different areas and that you got that. And then you topped it off with software kind of skills. I, that is a great strategy to do it that way. It's harder to learn deeply, in a strong foundational kind of way, statistics, but the software skills, there's bootcamps for that. There's ways that you can pick that stuff up as an add on. So I think you did it really well.
[01:06:32] Adam Butler: Well, I wish I could say I did it deliberately. You know, it was a little bit of laziness, a little bit of curiosity, and I guess a few nudges from good fortune along the way, that led me in this direction. Great business partners obviously make a big difference of, your wife makes a big difference, but there's just a lot of ingredients in the pie that you need to get you there, but it's been an interesting journey.
[01:07:02] John Skrentny: Great. Thanks for sharing that.
[01:07:03] Adam Butler: Thanks for asking. All right. John, again, this was a little bit of off roading for ReSolve Riffs, but I think it ended up being squarely in our sphere of curiosity, and really enjoyed our chat. Thank you so much for coming and sharing.
[01:07:20] John Skrentny: Great. Thanks. Thanks so much, Adam. I really appreciate it. And you asked some great questions, and you've gave me a couple of ideas for some books coming up in the future.
[01:07:28] Adam Butler: Fantastic.
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