Full transcript: Obama administration Secretary of Commerce Penny Pritzker on Recode Decode

On this episode of Recode Decode, hosted by Kara Swisher, former U.S. Secretary of Commerce Penny Pritzker talks about “The Work Ahead,” a new report on the 21st century American workforce, which recommends a nationwide re-evaluation of education, training and how to think about working alongside machines.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

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Kara Swisher: Hi, I’m Kara Swisher, editor-at-large at Recode. You may know me as someone who can’t be replaced by a machine, but in my spare time, I talk tech. You’re listening to Recode Decode from the Vox Media Podcast Network.

Today, in the red chair is Penny Pritzker, the former U.S. Secretary of Commerce in the Obama administration. She’s also the co-author of The Work Ahead: A Report About the American Workplace in the 21st Century, that was sponsored by The Council on Foreign Relations. It calls for fundamental policy changes to better support US workers.

Penny, welcome back to Recode Decode.

Penny Pritzker: Thanks.

Were you Commerce Secretary when I had you on last time?

Yes, I was.

Yes, you were. You were in the previous administration.

Glad to be here.

Let’s talk about your background, very quick, so people who may not have listened to that ... You’re a real estate developer.

Basically I’ve been in business for 30 years, over 30 years actually. Then, President Obama asked me — I’m not a politician — asked me if I would come in.

You were an early supporter in Chicago.

Yes. I had known him for a long time and he asked me if I would come in and serve as Commerce Secretary and to help him with his relationship with the business community and help with economic policy. And then, really, be the chief commercial advocate for American business around the world.

Right. Right, which you did. You’re not just a business person. You’re a big real estate empire. You guys do a lot of things in lots of different businesses, but primarily real estate initially.

My early career was primarily in real estate. Now, I’m doing a lot more in technology.

Right, and we’re going to talk about that.

Great.

You served as Commerce Secretary. Just go over your biggest hits. What was your focus?

My focus was a lot on attracting foreign direct investment because it creates great jobs in the United States and great opportunity. The first ever digital agenda for the United States. I also focused on a skilled workforce, which we’ll talk about more later, and unlocking our data. The data revolution was just starting.

Right. We did talk about that.

The Department of Commerce produces about 20 to 40 terabytes of data a day.

Along with the census. Along with the ...

Exactly. Census is part of the Department of Commerce, as is the weather. We also created a digital attache program to help American businesses that were trying to sell their products digitally around the world. Broadband expansion, very important to make sure most Americans could get access to high-speed internet. Patent protection, big initiatives there. The U.S./EU privacy shield. Post-Snowden, we had lost the safe harbor to transfer digital information back and forth between the United States and Europe.

I think Mark Zuckerberg is over there right now not answering questions at the European Parliament.

We had to work very closely with the EU to solve that problem because we had thousands of businesses here who had somewhere around $290 billion worth of digital trade at risk. We were able to fix that and put that back together. A lot of different things that we did. Very exciting.

Advanced manufacturing. I also worked really hard. We did 14 advanced manufacturing institutes called “Manufacturing USA” around the United States. The goal being, how do you take great ideas that are sitting in the laboratory and get them to market in the next five to seven years so the United States could lead, whether it was in composite materials or it might be in different forms of energy, or ...

Things we can make here.

Things we can make here and sell, not only sell here but sell around the world.

I love the name “Advanced Manufacturing.” It sounds so promising.

It is promising.

It is promising. What would you say your overall take as Secretary was? What was your theory of what Commerce [was doing] and being in government? Because you were a business person moving to government.

My thesis of the Department of Commerce is we were a service organization. Whether we were the census full of data or the weather service full of information that was needed every single day or we were offering you a patent or a trademark, or if you had sensitive material you wanted to send, sell around the world, we’d give you permission if you were selling to people that we thought made sense.

I viewed the Department of Commerce as a service organization. We really, we put together a strategic plan that really focused the whole department and said we’re going to do trade and foreign direct investment. We’re going to focus on innovation, a better skilled workforce, advanced manufacturing, digital policy, data, making our data more available. And then environmental intelligence, which is really what NOAA provides. The view was, our customer was first the business community because they’re the ones who were using our capabilities the most, but also was to help the rest of the government be more efficient.

Right. One of the things was digitizing each of these agencies, which they hadn’t been. That was a big push during the Obama administration.

Exactly. Exactly. It was really amazing how far behind the department was. When I arrived, our email didn’t work. It would go out for four hours a day and people would tell me that was normal. I said, “No, that’s not normal. It’s not the way it works in the real world.”

No, it doesn’t. Yeah.

We really, we in fact took the department to the cloud. We kind of leapfrogged the bad technologies that we had and really pressed forward.

The other thing we did is we created the Commerce Digital Service, where what we did is train people within the organization how to use our data, how to bring it to life, how to create APIs, how to code. We had over ... We only ran the program for the last 18 months. We had over 3,000 people within the department go through our programs. We had trainers who helped train folks who could bring the department to life. It was exciting.

Yeah. How would you look back on your government experience? What would you say, given what’s happened afterwards too? We’ll talk about ...

I loved it. I felt it, first it was an honor to serve our country, and I felt like I had the privilege of bringing everything I’d ever learned in my life to try and help the American people. I took that very seriously every single day, whether it was trying to bring more jobs here to the United States, maybe through travel and tourism policy. We were on plan to have 100 million travelers to the United States. That’s all gone awry now, but with travelers comes enormous job creation here.

We were bringing factories from around the world to the United States. I felt that it was exciting. We were building bridges with Mexico because the supply chains of the United States very much extend into our partners in Canada and Mexico, but the infrastructure, both if it came to air infrastructure or our border crossings for goods and services, were really antiquated.

We worked closely. The vice president put me in charge of the high-level economic dialogue on his behalf. We got enormous things done that, to the benefit of American business and the American worker, that made it much easier for goods and services to flow back and forth between our countries.

It also strengthened the countries on our borders, which we felt was really important to have a strong buffer between ...

Right. A strong Mexico is better.

A strong Mexico is good for the United States. A strong Canada is good for the United States.

I felt, as a business person who had time in government for three-and-a-half years, that it was extraordinary and it changed my view of the world. I also felt that it was possible to work with across the aisle. We worked with everyone. Even Ted Cruz said to me, he said, “Commerce is a bipartisan issue. We ought to be able to work together.” And we did.

I had my authorizers and the members of Congress that also gave us our money were Republican leaders. I worked very well with them, but you had to explain what are you trying to get done, how are you going to do it, why you’re going to spend the money efficiently, why it’s in the best interest of the taxpayer to use our resources in a certain fashion. I took that part very seriously because, unlike running a business, you can’t just decide what you’re going to do. It’s a democracy, and a democracy means you have to bring other people along.

You used the term “gone awry.” How do you reflect on what’s happening now? You did all this stuff and it seems as if they stuck it in a drawer at this point.

The challenge ... Yes, many things have been stuck in a drawer. The other thing is, we have a lot of chaos. Certainly as Secretary of Commerce ...

He wants to run it like a business so he can do anything you want. When he says, “I’m going to bring business things,” you just said something very clear: When you’re in business, you can do what you want. In democracy, you can’t. You’ve got to work together to ...

One thing we all know is businesses want certainty. They want to understand the playing field and they want to understand the rules. Then they’re willing to operate within them. Then they’re willing to invest. Then they’re willing to create jobs.

We were very focused on job creation, but what we knew is the federal government doesn’t create jobs. Private sector creates jobs. We had to create the conditions where the private sector would want to invest ...

Would do that.

And grow and create jobs. That was very much a focus of ours because it’s hard to remember, when we started, when I came in, I think unemployment was around 8 percent. When President Obama came in, it was north of 10 percent. We were very focused on job creation but we understood that’s not, the government doesn’t create those jobs. What we knew is, you needed to create also greater certainty so that companies had conviction and clarity, that they would take a business risk. But they didn’t want to take a geopolitical risk, if you will, or a geo-economic risk.

Things gone awry today, there’s a lot of uncertainty. It makes it very difficult to invest.

Right. How do you look at the Commerce Department today, then?

They seem very focused on the trade deficit, which was not a focus of ours. The factors that go into a trade deficit are much bigger than trade agreements. What we were focused on was, “How do we open our markets so that we get more investment in the United States?” Which creates jobs and creates opportunity and economic benefit for Americans. We were focused on market access to other countries and working with other countries to be able to have easier access into their economies.

It wasn’t always easy. We had a lot of success, but we ran into also a lot of challenges. What I worry about is, it takes a very sustained, consistent effort to make change across ... if you want, in trade relations.

If you think about TPP, we’re questioning what leverage do we have with China. We threw out TPP. It took, I think, north of six, seven, years to get TPP put together. You can’t just say, “Oh, okay, I want to do a new deal,” and that’s all going to just happen quickly.

That’s the challenge that I think we face is understanding what are the rules now. Nobody seems to know what ...

Look at the China thing right now.

Whether it’s China, Mexico, Canada, etc.

It started off with the, “We’re going to shake you down,” and then giving up on that. “We’re going to deny you this,” and then ... It looks like saying something crazy and then walking it back.

Yeah. I don’t understand the strategy. I can’t make sense of it. It seems to be that the positioning changes day to day.

That’s because, I think, internally, there’s people who disagree with ...

There seems to be. I’m not privy to that, but what I know as someone who is a business person, it’s very hard to sort out. It’s very hard to figure out then, “Where do I want to put my capital so that I can create economic activity?” Which is, I think, frankly, what everybody wants.

Right. Creating opportunity. In fairness, are there anything where you think it’s very okay to focus on trade deficits? Example, with China. Take on the China issue.

I think China, look, there’s no doubt there’s a challenge with market access in China. I’ve said this to the Chinese. It’s not like this is news from me. Certainly, this administration is attacking that issue. There’s no doubt there’s challenges about intellectual property protection.

My question is the approach, which is I think that this threatening and very vitriolic kind of conversation that is hoping, then, that someone’s going to say, “I’ve been wrong all this time and I’m going to back off.” That’s not how governments relate to one another.

My thesis has always been: The way to work with another government, let’s say on the economic issues, is to help them understand why it’s in their best interest to make it easier for American companies to have access to their market.

The approach that we took was to say, “Here are the rules that are an impediment to foreign direct investment. You have a public statement. You want our investment in your country and we want yours here. You’ve created impediments, whether it’s intellectual property protection or we don’t have access to certain markets or things like that,” and say, “That’s not helping you, nor is it helping us. Let’s find places where it’s in everyone’s best interest to make change.”

It seems like right now, it’s just press releases or just statements. Then, there’s no ...

We’re moving from issue to issue and it doesn’t seem there’s a strategic pattern here.

No. I just think it’s just utterances. You go from very threatening remarks to then, “We’re going to help the Chinese company,” which I think most intelligence officials are disturbed by, this to that to that. It looks like nothing’s been gotten in the end from it.

It’s very hard to understand.

Even Marco Rubio gets it. They’re giving concessions they were going to give anyway, so you’re not getting anything.

It’s very hard to understand. When I listen to our officials talk, they’re very opaque about what we got in return or what were the promises that were made. Agricultural access is very challenging. It’s been the number of negotiations that Secretary Vilsack and I and Ambassador Froman engaged in on agricultural access, it’s just not something that happens overnight.

It’ll be interesting to see if somehow out of this chaos comes major breakthroughs, but our experience certainly with China is you have to have a very steady long-term hand and you have to be consistent to make breakthroughs.

With them, absolutely. Since then, you’ve left — getting off the subject — you left, you went back and created a new company, which is in real estate and other things, private equity.

Yes. I came back to create PSP Partners. We really do a couple of things. In the corporate area, we’re focused on ... what we’ve always been is building businesses. We invest across the spectrum in venture growth and established businesses. What we’re trying to do is take advantage of global trends, whether it’s urbanization. In our real estate effort, we’re developing and own a whole portfolio of multi-family apartment buildings in the United States and Mexico.

Or, it’s logistics are changing. We create industrial products, industrial buildings, and try to solve problems for companies trying to get their goods to market.

Right. You’re looking at global businesses to do that.

Exactly, but then on the more corporate and tech side, we’re also focused on bringing technology to established businesses or the data revolution.

I’ll give you a couple examples there. For example, we’re invested in a company called WireWheel, which is creating a solution to help companies know where is their sensitive data at any time so that they can be compliant with GDPR.

Or, we own a company called Beachfront Media that is a technology advertising business. We’re trying to be in areas of the economy that we think have growth. We like to work with entrepreneurs and business founders to build businesses and to help them grow their enterprises.

Right. Then, the two other things you’ve done since that, one is this, we’re going to talk about in a second, this report, “The Work Ahead,” which I want to get into in the next section, and you also joined the board of Microsoft.

I did.

Why? Why not?

Why? Because first of all, they asked me. You don’t just get to show up ...

Yeah. I bet you get asked a lot.

I wanted to join the board of Microsoft. I was really interested in joining the board of one of our leading technology companies and ...

Why is that?

Because there’s so much ...

Uber is not something you wanted to do right then. They have 17 board seats, so they may be asking you, I’m guessing.

Seventeen board seats, that’s a lot.

They need a lot of oversight.

I have no information about that, but what I would say about Microsoft is, I really, I think Satya is a terrifically transformational leader.

Satya Nadella.

I think the culture, I really agree with what they’re trying to do, what he’s trying to do and where the leadership of that company is going culturally. I believe in the products that they have created, are creating and are delivering, but it is a vertical learning curve for me. I am the first person to tell both Satya and Brad Smith, who is the president of Microsoft ...

He’s coming to Code next week.

He’s fabulous.

He is.

He’s been a great thought partner and leader when I was in the Department of Commerce in terms of issues of privacy and the digital agenda.

For me, it was a company that I thought would help keep me on the leading edge of what’s happening in technology. I feel that’s extremely important as a businessperson.

Right, to understand what’s going on.

Absolutely.

Absolutely. But there’s also “The Work Ahead,” besides the business stuff you’re doing, and we’re going to talk about it in a minute. Could you just give us a two-second version — in the next section we’ll talk about it in detail — what the point of this was?

Sure. The point of “The Work Ahead” is that we have seismic forces that are changing the very nature of work. The kind of innovation we’ve got — automation, globalization, artificial intelligence — Americans are struggling to adjust and thrive in this environment. The Council on Foreign Relations asked John Engler and I to lead a task force of 20 experts to put together a menu of options for federal leaders, state and local leaders, business leaders and NGOs.

All right. We’re going to talk more about this with Penny Pritzker. She’s the co-author of “The Work Ahead.” She also used to run the Commerce Department, a businessperson on the board of Microsoft. We’re going to talk about this topic, a topic that’s near and dear to my heart, it’s something I’m very interested in is how ...

I’m so passionate about this issue.

Yeah, absolutely, because I think it affects everything — culture, politics — and could get worse in lots of ways.

Absolutely. And our national security.

And our national security. Anyway, when we get back from a word from our sponsors.

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We’re here with Penny Pritzker, the co-author of “The Work Ahead.” She was also Commerce Secretary in the Obama administration, businessperson, Microsoft board member, everything else.

We were just talking about “The Work Ahead.” Talk about what some of the content of this is, because as you know, I’ve been doing some TV shows on this topic and where it’s going, because I think it impacts everything.

Well, first of all, you’re doing ... I love your interviews that you’re doing on this. It’s really important.

Look, the Pew Research has said 75 percent of Americans are really ... they have enormous angst about their job that they have today and about the future of their family. And I always like to make this personal. I like to think about, how are the people that we’re talking about ... And I think about Cory Powell from the South Side.

Of Chicago?

In Chicago, South Side of Chicago. He had worked for an architectural steel manufacturer, was a production supervisor. They revamped the plant, he loses his job. He can’t find work for a year. Part of his challenge was, he didn’t know how to explain if he’d been a supervisor, he was a manager, he had technical skills. He didn’t know how to present himself. And on social media, on Facebook, he finds out about Skills for Chicagoland’s Future. And he basically is given coaching and skills training and then has a job today at another company called Friedman Seating, which is a manufacturer of mass transit seats. And he’s had two pay raises, he’s been promoted.

The challenge out there is, the workplace is changing, and how do we help Americans manage the change in the workplace? Whether it’s in manufacturing or it’s in accounting or it’s in white-collar work, it’s happening to all of us.

Right. And I think ... what’s interesting is this past election, I think, was all about work. I mean, you could point to racism, you can point to fear-mongering. But this is a candidate who took advantage of the fears, and then another group of people that didn’t have solutions to those fears, didn’t have answers, enough answers about where work was going.

And I think if you could boil it down there’s all kinds of issues around an interesting candidate, but ultimately it was about work, as far as I could tell, people worried about where it’s going. The topics I think you just alluded to, one was automation and robotics. I think you put those together. The changes in transportation, self-driving and infrastructure. AI and all the machine learning and all the parts of that. And then the general feeling that some of these jobs are just not going to be there in the future. It’s as if we’re going as we did from farming to manufacturing. Something is about to change really significantly.

I think we’re in the change and what we haven’t done is acknowledged that and said, “We need a systems change. We need a cultural change.” First of all, lifelong learning has got to be available to everyone. And we also have to better connect and better link both your education and your skills training to jobs. There are new jobs, there are all kinds of jobs being created. I haven’t spoken to a CEO in this country — and I spoke to probably 2,500 when I was in Commerce — who didn’t tell me, “I can’t find the skilled workforce I need.” And yet, you’ve got people who are unhappy with the opportunity in front of them.

And then the third thing you’ve got is ... I was just in Toronto this past week and Toronto is growing at 1 percent a year, and many of those folks are people who are working for American companies that are having to locate in Canada because of the immigration policy.

Right. We’ll get to immigration.

So we need a systems change. In terms of the workforce, basically our thesis is that lifelong learning has got to be available to every American. We’ve got to make Pell grants more flexible, MAP grants more flexible. We need to make it more transparent for individuals to understand, “How do I get from where I’m at? I’m in 10th grade, I wanna become somebody who works in AI. I may not even understand what AI is. But how do I get there? What’s that path?” We don’t have the counselors available to do that. “What’s the technology tools that can help?” There are some that exist.

I met this fabulous group out of San Diego called Journeys. And they have mapped across the United States ... you say, “Here’s where I am today,” both physically and, let’s say, what stage I am in my education. And you say, “I wanna become a cybersecurity expert.” And the tool will map for you where, within your geography, first, what are the paths? Almost like a mapping function for driving your car. What’s the path you need to take in order to achieve your objectives? What are the courses you need to take, where you might be able to take them within your region. We need more tools like that.

The Business Roundtable’s created something called Credential Engine. You go online and it tells you, if you have certain credentials, what does that prepare you for. We need to make all of that much more transparent.

So, let’s talk about how we think about work in the U.S. before this. Because this is the 21st century. But the way I think work has been done in this country is not planned at all. It’s sort of like, “Get out there,” and they just loose you on society, loose you on the workforce.

Absolutely. I think about young people. And you have young people who make it through high school and for one reason or another need to work and college is not something they’re going to pursue at that moment. What are we doing to prepare that person? And what are their options?

Well, do you think we have a history of doing that much?

No, we do nothing. We don’t do it there, we don’t do it for the young person ...

Counselors ... you used to be apprenticed, hundreds of years ago.

We have college counselors, we do not have career counselors. And that’s why I talk about the tools that are available online. We need to ... one of the things our report calls for is we need to reinsert career counseling back into the education system. And we need to support those people with tools that create greater transparency so that you can help people — and this is dealing with the young person, it’s not dealing with the mid-career person who finds themselves out of work. There’s a different set of tools that need to be created there.

But we need to acknowledge this is a reality. And Americans are resourceful. If you help them help themselves, they’re gonna do great. So our report, that’s a fundamental thesis, but we’re not making this easy. As you said, we’re basically saying to someone, “Figure it out on your own.” And we’re telling families — I saw this when I was Secretary of Commerce — we did something called Manufacturing Day. We were promoting advanced manufacturing, trying to show kids that advanced manufacturing is not your father, your grandfather or your grandmother’s manufacturing. And families came to this. The last one we did, we had a half a million young people and their families go to manufacturing plants all over the country.

And what was so interesting — and I talked with a number of the parents — they said, “Help me help my child. I don’t know how to teach them how to do advanced manufacturing or what do they need to learn, ’cause I didn’t do that ’cause it didn’t exist.”

Yeah, I was in a parent meeting yesterday in a very elite school. Same thing. And we started to bring up this issue around coding. We weren’t trying to say everybody has to code, although that’s been a big push, that it was beyond just learning how to code, it’s how to understand the next society. And all the parents — educated parents, very wealthy parents — just were beside themselves too. They’re like, “I don’t know what to tell my kids about the future of work.”

Exactly, so this is a problem, and imagine you don’t have ...

I was like, “Don’t be a radiologist.” That’s my first piece of advice.

Yeah. But imagine you don’t have parents of means and you’re just trying to navigate the system, and the system is ... there’s nobody really to help you. And so we need ... this is why I say we need a systems change. Like you mentioned, when we went from the Agriculture Age to the Industrial Age, at that time, the United States government made major policy. We made public high school mandatory, we made certain courses mandatory. We said, “Here’s what we’re going to do in order to prepare our individuals to be competitive in a manufacturing economy, both domestically and globally.”

We’re not doing any of this. I do have faith, though, in governors and in mayors, big-city mayors. I think that they get it and they see, because they’re all in a competition to attract jobs, that they’ve got to therefore adopt policies that prepare their workforce. So you’re seeing all kinds of innovative things going on around the United States, but you’re not seeing them go to scale, and that’s a challenge.

All right. Let’s talk about some of the issues. So let’s talk about the issues, the problems of work ahead. So one is AI.

Right.

Go ahead. You go through what you think the problem ...

Well, the challenges that you see are as I said. One are the technologies that exist that are creating disruption in jobs. They’re also creating new jobs.

So identifying those.

One of the challenges is identifying, “What’s the path that I need to be on to get to those new jobs?”

Or the path to get off of.

Or the path to get off of where I’m at and how do I bridge then to greater opportunity?

It kind of reminds me, thinking, like, if you were back before cars showed up, just before cars showed up, or just as they did, being the person to say, “I don’t think you shoe horses any more. I feel like you shouldn’t teach your children to shoe horses, perhaps, ’cause this car thing looks like it might replace horses.” That’s the kind of thing, you can see job after job after job like that. So identifying the jobs ...

So part of the challenge is identifying. Think of this: Many of these careers, they didn’t exist a decade ago, forget when I came out of school. They didn’t exist 10 years ago.

Uber driver, well, drivers.

Whether you’re an Uber driver or you want to be a cybersecurity expert, you wanna be somebody who specializes in machine learning or you’re doing the kind of diagnosis that’s going on with new types of biotechnology. I mean, it requires different kinds of training. Not all of it also requires that you go and have four years of college and graduate school, etc., etc.

And so, transparency is a big issue. And that’s one of the biggest challenges we have, which is making it easier to understand those pathways. And we can harness data, and there are both companies and part of what we tried to do at the Department of Commerce was to make more of this available to help people understand.

The other challenge is benefits. If you think about it, many people earn their benefits through their job, through their full-time job.

Right. Health care, whatever, savings.

Exactly. Health care, workers comp, retirement benefits. You can go on and on. And sick leave, etc. If I’m part of the gig economy or I’m a contract worker or I have a portfolio of jobs — more and more young people have a portfolio of jobs. They’re doing a series of things. They’re entrepreneurial.

That’s the newest number: 25 jobs in your lifetime.

In your lifetime, yes, exactly.

Used to be one.

But some even have multiple jobs at the same time, things they’re doing. “I’ve got this. And then I’ve got my gig on the side,” if you will. But how are you earning your benefits? We need to modernize that so that ...

They’re portable with you.

They’re portable, and they’re also ... you can earn, maybe, partial benefits in different jobs. And that becomes more normal.

We also have to help displaced workers. We’re displacing workers fast. We have a flexible workforce. But then we owe those people something greater than trade adjustment assistance, which is what we offer the people who are displaced by trade. But technology is displacing as many jobs, if not more.

Technology adjustment assistance.

Exactly. And the thesis that we put forward is one that, really, we have a lot of faith in business leaders being much clearer about what is their need in the workforce. And the second is state and local leadership coming together — business leadership with government leadership with the educational institutions, K-12 all the way through universities, especially including the community colleges — to be part of the solution.

What you’re finding in certain states, laws have to be changed to create the flexibility so if I wanna be on a certain pathway where, let’s say I go K through 14 and I need to be work-ready. I cannot afford to be in school longer, and I may wanna earn my BA later. But I need to be employable. I wanna start taking courses in high school that maybe are offered at the community college. You need to be able to change laws that allow for that.

Right.

So you see states like Delaware, Colorado or South Carolina that have done this and it creates greater opportunity for folks.

What about the idea of coding? Like, this is something that’s caught on to Silicon Valley all the time. I don’t ... I think it’s sort of a dumbed-down version of something important. You sort of hear them saying ... it’s like, that’s not really how you wanna position it, that it should be like learning English or something like that.

I don’t know. I’m not ...

It was a big push by the Obama administration, for sure.

Right. I think that ... I’m not going to argue against coding. I think you have to understand — and I don’t know what the right course offerings are to say, “How do I understand what is coding, what is artificial intelligence, how do I work side by side with machines?” Because we all work with machines, we all work with some sort of either iPad or phone or computer. Everything is technology today, every job. And so we have to be trained so that we can do that proficiently and not be somebody who’s constantly saying, “Help, help. I can’t get this done.”

Right. When we’re talking about those ideas, you have machine skills in U.S. leadership. I wanna get to U.S. leadership in a second around lots of topics, but what are ... the picture on this front is of a machine replacing things.

Yes.

One of the things I just talked about in a recent podcast was this idea of, sometimes machines should replace jobs because they do it better. Coal mining is dangerous for people. Machines should probably do the work. Or robots of some sort. There’s all kinds of jobs were machines do a better job, they’re cheaper, they do better. When you think about ... when you say machines, what do you mean by that, “The Work Ahead”? Because they are gonna replace.

Right, but there are all kinds of machines. There’s robotics that may replace somebody who’s trying to lift something that’s too heavy or move materials. But then there’s machines like drones. I mean, drones could, for example, if you think about inspections of telecommunications towers or wind turbines or things like that, it’s dangerous to send an individual up there.

That’s right. Why do it?

But they need pilots. So it’s not like this is something that can be purely machine. The machines on a manufacturing floor need people to monitor and manage and adjust as products change. And so what we have to learn is to be able to work side by side with machines.

Mm-hmm. And then when you’re talking the skills people need, talk about those, what you’ve identified.

So the skills, it’s everything from ... we have a significant part of our population that’s just not even job-ready. So basic soft skills. I hate the word “soft” because these are basic fundamental skills that we take for granted in many instances that children are learning. But in many cases, there’s not been someone to model the basic workplace skills: How do I show up on time, how do I address folks, how do I resolve conflict at work, how do I engage in a dialog around a new idea? These are skills that need to be learned. And how do I do it in a way where I don’t get defensive, where I feel that I can be collaborative?

And that’s a set of skills as much as it is learning how to run a smart grid or it is to learn to be a plumber or it is to learn to run a carpet manufacturing machine.

But one of the things you have to realize is a lot of these skills are technical. They become ...

Absolutely.

And the stuff that can be ... I was saying this to someone the other night, which is ... they were worried about their kids and I said, “I think you’re a smart person. Everything that can be digitized will be digitized. That’s it. Period.” Cars will be digitized. We will have self-driving cars, so what does that ... let’s just assume that’s happening and it’s not going to stop. What does that mean for malls, for insurance companies? Start to really iterate around the entire ...

It means we’re gonna have massive change. I don’t know what it means for employment. I’m an optimist. We seem to have figured out employment throughout history, so I think we’ll figure that part out. And I’m a believer in jobs. Jobs are important for someone, not just for ...

You see, I don’t think there’s going to be jobs. I think there’s going to be a change. I think we’re going to work 20 hours a week.

That may or may not be true. I don’t know if that’s going to be the case. I don’t necessarily believe that’s the case because we seem to be able to iterate jobs and all I know is that we seem to need more people. We’ve had low unemployment, also, and dissatisfaction with the skills. And those are technical skills. We need more people with more technical skills. But we need to also make it easier for someone who is at different stages of their life gaining those technical skills. We don’t stop learning.

Right, absolutely. So when we get back, I wanna talk more about the leadership parts of it, because one of the things that’s happened is around immigration, around the idea this country was founded on immigration and such. And Sayna Nadella is an immigrant, for example, at Microsoft. Sergey Brin is an immigrant, Elon Musk is an immigrant. You can go down ... I’m just using the tech people.

Forty percent of the CEOs of the Fortune 500 are either immigrants themselves or children of immigrants.

Exactly. And so I want to talk about that leadership, what it’s going to require as this transition is made. Because one thing I do fear is that the fresh ideas of what we’re going to do about it, if you believe as I do, say, that you’re going to work 20 hours a week, what do we do about that? Who makes money? What about universal basic income? Lots of different ideas that have been bandied about.

I wanna talk about that and more with Penny Pritzker, she was the former US Commerce Secretary, and she’s been working on a book with the Council of Foreign Relations. She’s led a report with John Engler called The Work Ahead: Machines, Skills and US Leadership in the 21st Century.

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We’re here with Penny Pritzker. She has ... did you pen this book, “The Work Ahead”? I’m teasing you. Nobody pens nothing anymore.

I didn’t write every word ... yes, it was a collaborative process of 20 experts.

And so you brought them together to ... give me an example of an expert. Like, for ... such as?

Well, we had the head of Lumina Foundation. We had folks from McKinsey. We had John Engler, former governor. We had Jack Markel, former governor. We had business leaders from different parts of the country. So it was a really eclectic group of people.

And you have recommendations here?

Absolutely.

“To strengthen the link between education and work, overhaul transition assistance for workers.”

Yes.

You’re giving, basically, advice, an advice book, essentially.

The way we thought about it ...

“Remove barriers to opportunity,” that’s a big one.

To provide a menu of options. Options at the federal level, options for state and local leaders, options for business leaders, what to do, options for nonprofits, because I’m a do person. I’m not a big ...

Right. This is what you can do.

Yeah, here’s what you can do and here are examples of programs that are working. And so, there’s a lot of evaluation. I think it’s a very useful offering for, for example ... What I kept in mind was, think about the fact we’re going to have 31 new governors next year. If you’re a governor, how could you pull the levers in your state to make the people living in your state more competitive? Our audience, we have a federal audience as well. I’m just not sure much will happen there right now.

Yeah, I don’t know about that. Talk about leadership, I mean, immigration. Take that as a thing. This has been an incredibly hostile administration to immigrants.

Well, I don’t get the policy. I really don’t understand it. First of all, we’re a country of immigrants.

We’re a country of fear and racism, but go ahead.

I’m the great-granddaughter of an immigrant. I went back to Ukraine, which is where my family came from. I went to the 75th anniversary of Babi Yar, where the 32,000 Jews were killed. Frankly, I wouldn’t be alive today if my great-grandfather had not immigrated. We have benefited from immigration. We’ve benefited not just economically but as the mosaic that is our country has benefited from all kinds of thinking.

Why do you think there’s so much fear around it? I just went to see a tremendous thing that Laurene Jobs actually backed, the Emerson Collective, the Carne y Arena, about people moving across the border, the border, the issues around Mexico. That’s what you were saying. Strengthening Mexico would be the best thing we could do around illegal immigrants.

Absolutely, so then there’s jobs in Mexico. The truth is, the immigration from Mexico, illegal immigration from Mexico, is very low. We followed this caravan of folks trying to come to the United States through Mexico. It was 1,200 people, and frankly, they were coming from south of the Mexican border. A strong Mexico and a vibrant economic Mexico is good for the United States. But immigration ...

About immigration. This idea has become demonized or, maybe among small groups.

Well, I think it’s related to the topic that we were talking about before, which is the angst Americans are feeling about their jobs and their opportunity. They don’t know what to do, but they’re like, “Okay, I don’t have it. Maybe somebody else does.” I think there’s a fear of the other that’s been stoked, which is just the opposite of what the values have been of the United States of America.

I think that our immigration policy ... We tried to get immigration reform done in the Obama administration. It was a huge priority, and we would have benefited so much because we do this ... If you’re a refugee or you’re someone trying to come to the United States, you go through five, seven years of a process. You go through so much review. It’s unbelievable.

What we’re not allowing is ... Think of this. Today, 50 percent of the people who are getting a master’s or a PhD in STEM fields today are people from outside the United States, educated in our schools. We’re asking them to leave. They want to stay. That’s crazy.

It is crazy. It brings it back to ... It removes innovation. One of these recommendations is keep it here in this country.

Keep the innovation here. If you’re an immigrant, you have to be entrepreneurial and innovative because how the heck did you get here? We don’t make it easy. It’s very hard. You have to have resiliency, and you have to have stick-to-itiveness. I’m not saying immigrants are more resilient, but what I will say is that immigrants do form new companies at a higher rate than Americans do.

The other problem that I saw firsthand as Secretary of Commerce is we have American businesses that are putting jobs today in Canada and other parts of the world because they can’t find the talent here. “Just please,” they would beg me, “please let us get these people in so that they can do their work here, they can buy our products here and they can be part of our communities. They can strengthen our economy.” But I think there’s a lot of people who feel, “Okay, that’s great, except it’s not helping me.” I think that that’s part of this divide.

What is at heart at the success of these messages against immigration?

I’m sorry. Say that again?

Why are they sinking in? Why are these feelings ... Because of just plain old fear of what’s coming?

I think it’s fear and angst. I think it’s a question of people feeling that they don’t have opportunity and they can’t find their way to economic opportunity. We have this growing divide in our country in terms of opportunity that is undermining the promise of the United States, and we must address that. We can’t just address the opportunities at the top of the food chain. We’ve got to make sure that every American has the opportunity at the American Dream.

That’s why I say we’ve got the programs that can make it easier for someone who’s in middle school and high school to get skills so that they can be employable. I’m not saying that they shouldn’t ultimately pursue more and more education. I’m saying we have to recognize the flexibility that’s needed in an individual’s life.

What do you think of the Silicon Valley idea that you don’t need school? More and more, I have to say, at first I dismissed it out of hand, but as my kids get older, I’m like, “Do they really need to go to college?” They’re going to, but why? I start to question the concept of it. What is the actual career path for people? Again, my kids are going, for sure, but you begin to question it. It’s a big thing in Silicon Valley: Why? You have Mark Zuckerberg, others who left college, created stuff. How do you look at that concept of ... When you talk about ongoing education, that’s different than ...

I think we need all of the above. In other words, we need to offer pathways for someone who’s not going to go to college. You may be Mark Zuckerberg or Bill Gates ...

Or vocational training.

... or you may be somebody who is going to do vocational work. There are phenomenal vocational jobs with great incomes.

Job opportunities, yeah. My plumber’s doing very well.

Yeah.

He is. I’m telling you, he makes a lot of money.

I went to an advanced manufacturing place in Delaware where I met all kinds of young people who had gone through the high school system in Delaware, gotten skills training, were in manufacturing. They owned a home. They owned a car. They were getting further education. They had no debt. We need to make all of that easier for the average American. That’s the fundamental thesis of the report. We offer up all kinds of examples of where that’s happening.

But I mean, the concept of having to go to college as the thing you should do.

Part of what we say is that recruiting needs to be skills-based and not degree-based, and that we understand if you get ... Some skills are acquired through credentials, maybe not through a ... They may be through a particular program. We need much greater transparency of the value of a credential. What skills does that mean you have earned?

One of the things we found over the last 10 years is recruiters ... It’s easier to recruit somebody and fill a job. You get greater credit if you say, “I found the person with an undergraduate degree.” In a funny way, that’s too easy. It’s much easier than trying to figure out, “Do you have the requisite skills, but you don’t have a college degree, to do the job in front of us?” But more and more companies are willing to put in the effort to understand ...

Right, to train them once they’re there.

Well, and also to understand really what are the skills. Going back to my example I gave at the beginning of Cory Powell. Part of Cory Powell’s problem wasn’t that he didn’t have skills. He didn’t know how to present his skills. He didn’t have the “degrees” that were theoretically needed. But ultimately, if he was able to gain a few more skills and also explain he had management skills, he had supervisory skills, he had technical skills, he was able to be reemployed and improve his income.

Lastly, I want to talk about the entire world is competing with us at this point. Is there such a thing ... There is this fight between the globalists and the populists or nationalists or the tribalism. It seems like you can’t avoid the global arena, but do we have to think of it that way? Because you’re talking about technical skills leaving the United States. This is aimed at the United States.

It’s aimed at policies for the United States.

Is there going to be such a thing going forward? When you think about the idea of maintaining U.S. ... The reason you should maintain U.S. technological leadership is one, we invented it, and two, other countries don’t have our values, don’t have the values that we have towards all kinds of things. China running the technology world is terrible to me.

Right. I mean, think about human rights.

Yeah, it’s terrifying. They can’t. They may not. That’s how I feel, like ...

It’s not been a priority there.

No. No. Among these things, when you think about a global economy, should we be thinking in terms of countries anymore, or should we be ...

Well, I think we have to think in terms of countries because they’re not going away. I do think what we have to do is think about global competitiveness for the average American. This is what we’re trying to address here, is we need to help the average American be globally competitive because it’s too easy today to move jobs around the world.

Absolutely. That’s what I’m thinking.

Communication and transportation have made that just easier and easier. We’ve got to acknowledge that and say, “We’ve got to help Americans stay on the cutting edge.” It’s not impossible to do. This is not a heavy lift. We’ve got to have the will to do it and sustained effort, and we have to commit to lifelong learning, lifelong training.

Right. If you were in charge again, of these many things you ... Overall, support for work is critical, how we work and not just how we treat our children and how we help mothers and parents deal with the workforce. That’s a whole ’nother thing. Of these things, what do you think, in the near term, medium term and long term, are the most critical elements? Pick one thing that’s critical in the next five years.

I think that we need to adjust our education and workforce training system so that it’s got greater flexibility. Thirty percent of Americans graduate from college, 70 percent don’t. We can’t write off the 70 percent. We’ve got to create that greater flexibility and the ability to be learning and earning at the same time. I think that is ... That requires a mindset shift, a policy shift, a ...

Give me a policy, one policy you’d put into place that would ...

Well, it’s how you run your educational funding. Making a Pell grant more flexible so that it supports all kinds of learning.

Not just ...

That would be one policy that should be bipartisan that we ought to be able to get done. I think that frankly continuing to make the United States an attractive place to invest because companies have choices now all over the world. You can’t just have a workforce. You also have to have rules and regulations and an attitude and an atmosphere that’s welcoming to all peoples. That is something that I think is absolutely critical.

I think Jeff Bezos started a little bit of a circus around the headquarters, the second headquarters thing that he’s been doing, Jeff Bezos and Amazon. It’s kind of interesting. I’m horrified and fascinated by it at the same time because it’s sort of a weird competition for his jobs. But the part I do like is the cities understanding what they have and don’t have in order to attract that particular thing. Whether they’re going to get benefits from it, we’ll see, by it being there.

Someone was talking about a state, and I was like, “No, they’re anti-gay. He won’t locate there.” They were like, “What do you know about that?” I’m like, “I’m telling you, he will not locate. I know this company. I know this person.” It just zeroed them out. I was thinking, those state legislatures are idiots. They’re going to lose all this economic benefit.

It’s been fascinating. I’m part of the leadership team for Chicago, representing Chicago in the race for HQ2.

You’re still in the race.

As far as we know, but we’ll see. Chicago’s the best city, so hopefully he will choose us. But we’ve learned an enormous amount. We did an enormous amount of research about ourselves, and comparative research that has helped us understand what makes us attractive and where we need to work.

What’s really cool is our private sector and our educational system have come together to say, “We are going to address the places that we assess we could do better. We’re going to promote the things that we think we’ve got figured out already.” That’s very ... To me, it’s been a big learning.

It’s a good thing to think about. Yeah. What’s the biggest plus of Chicago?

Chicago has phenomenal talent, great transportation. It’s affordable relative to many of the other cities. I’m sorry.

Good food.

Fabulous food, fabulous entertainment.

Are you listening, Bezos?

Yes.

It’ll be interesting. I have the sense of, well, Chicago would probably be an area he would ... It was really interesting because I was arguing with someone from a Southern state. I’m like, “You’re never getting it. It’s never happening for you, and it’s really a disappointment that your legislators don’t understand if you want ... If that’s more important than jobs.” Which was interesting to me, that was ...

Well, if you’re an investor, like a Jeff Bezos or like we are, you’re not thinking about the next three years or five years. You’re thinking about 15, 20, 25 years. You’re thinking in generations.

The future, yeah.

And you’re thinking, “Is this a place that’s committed to both the talent, the values, and is it going to be the kind of place where people are going to want to live?” What you’re seeing, as I talked about earlier, you’re seeing just an enormous interest by people living in urban areas. They’re finding them vibrant and interesting and exciting and diverse. The workforce is becoming much more diverse, and people want to be in that kind of place that has got that kind of energy.

Mm-hmm. Finishing up, when you think about the most ... It varies from city to city. For example, San Francisco’s growing like crazy with tech, but we are suffering from homelessness and crime and all kinds of things, drug use on the streets and things like that. It’s fascinating to watch both things happen at once. If you had to think, the most important thing in this thing ... I don’t want you to have to necessarily ... I want you to pick one. What is the thing you’re most worried about and the thing you’re most hopeful about, to finish up?

One of the things that I’m hopeful about ...

Let’s start with worried, because I’d like to end on hopeful, if you don’t mind.

Okay. Okay. One of the things that I’m most worried about is that we won’t make this a national cause, that we’ll just sort of let this go by piecemeal, and we won’t really come together and recognize the solutions are local, but that we’ll really need to make this a culture change for America.

I think I’ll pick one very specific thing I’m hopeful about, is the focus that seems to be around apprenticeships in all kinds of jobs, and the idea that we can help Americans through both learning and earning at the same time, I think that ...

Learning and earning. I like that. I like that. Have you thought about running for public office now?

Well, right now my brother’s running for public office, so ...

That’s right. I know that. I was going to ask about that.

One Pritzker in politics right now is enough.

Really? Do you think he’ll win?

I do. I think he’ll be a great governor.

Who’s he’s running against?

The state of Illinois.

No, I know.

He’s running against Governor Rauner, who’s also a friend, so it’s ... But, you know ...

Oh, right. Okay. You’re voting for your brother though, right?

Oh, more than voting for. I’m all in for my brother.

But you’ve never thought about running? Because I think government is very important to this, the right people in office.

Absolutely. Absolutely.

Just watching that hearing with Mark Zuckerberg, I was like, “That’s enough. These people cannot stay any longer, the ones that don’t understand technology or the future or the right questions to ask.”

I will say one thing, Kara. We need — as business leaders who are knowledgeable in technology — we need to make it acceptable for people to leave our employ for a year or two, go into government, support folks. I as much blame the legislators as I do the staff for that hearing because, frankly, we need to help the staff people be better informed. That’s something that we fought really hard for during the Obama administration, trying to build those bridges. Folks came from Silicon Valley, from Seattle and other parts of the country to help us.

Yeah. They did.

They felt the same way I did. It’s an honor to serve your country.

Mm-hmm, but now they’re not there. Just so you know, they’re all gone.

Yeah. Now I know.

They don’t have a head of the science office. That’s an astonishing ...

It’s amazing.

When you have a report like this, if they don’t have a head of science or technology or anything else, it’s just ... I don’t know how that’s going to happen. At least it’s delayed for a number of years for sure. That’s my opinion. You don’t have to say any ...

Well, the White House took interest in this, but we’ll see if they do something. We called for a national commission on workforce, and hopefully they will take action.

Yeah, we’ll see. All right. We’ll see if that happens. You’ll go back to the White House then?

I’m encouraging them to take this up as a serious issue.

Okay. All right, Penny. Thank you so much.

Thank you.

I was just baiting you there. I apologize. Anyway, thank you so much. It’s been great talking to you. This report is called “The Work Ahead: Machines, Skills, and U.S. Leadership in the Twenty-First Century.” It’s by the Council on Foreign Relations, and the co-chairs are John Engler and Penny Pritzker. Thank you so much for coming.

Thank you.

This article originally appeared on Recode.net.