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it out or leave it under the umbrella of the previous employer. Rollover provisions

do exist today, but they are complicated and many workers don't take advantage of

them because of that.

The universal pension format would make rollover simple, easy, and

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expected, so pension lockup per se would never keep someone from moving from one job

to another. Each employer could still offer his or her own specific 401 (k) benefit

plan, as an incentive to attract employees. But once a worker moved to another job,

the investments in that particular 401 (k) would just automatically dump into his

or her universal pension account. With each new job, a new 401 (k) could be started,

and with each move, the benefits deposited in that same universal pension account.

In addition to this simple, portable, and universal pension program, Will Marshall,

president of the Progressive Policy Institute, proposes legislation that would make

it much easier and more likely for workers to obtain stock options in the companies

for which they work. Such legislation would give tax incentives to companies to give

more workers more options earlier and penalize companies that do not. Part of making

workers more mobile is creating more ways to make more workers owners of financial

assets, not just their own labor. "We want a public that sees itself as stakeholders,

sharing in the capital-creating side of the flat world, not just competing in global

labor markets/' argued Marshall. "We all have to be owners as well as wage earners.

That is where public policy has to be focused-to make sure that people have

wealth-producing assets as they enter the twenty-first century, the way homeownership

accomplished that in the twentieth century."

Why? Because there is an increasing body of literature that says people who are

stakeholders, people who have a slice of the pie, "are more deeply invested in our

system of democratic capitalism and the policies thatkeep itdynamic," said Marshall.

It is another way, besides home-ownership, to underpin the legitimacy of democratic

capitalism. It is also another way to energize it, because workers who are also owners

are more productive on the job. Moreover, in a flat world where every worker is going

to face suffer competition, the more opportunities everyone has to build wealth

through the power of markets and compounding interest, the more he or she will be

able to be self-reliant. We need to give workers every stabilizer we can and make

it as easy for them to get stock options as it is for the plutocrats. Instead of just

being focused on protecting

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those with existing capital, as conservatives so often seem to be, let's focus instead

on widening the circle of capital owners.

On the health-care side, which I won't delve into in great detail, since that would

be a book unto itself, it is essential that we develop a scheme for portable health

insurance that reduces some of the burden on employers for providing and managing

coverage. Virtually every entrepreneur I talked to for this book cited soaring and

uncontrolled healthcare costs in America as a reason to move factories abroad to

countries where benefits were more limited, or nonexistent, or where there was

national health insurance. Again, I favor the type of portable health-care program

proposed by PPL The idea is to set up state-by-state collective purchasing pools,

the way Congress and federal employees now cover themselves. These pools would set

the rules and create the marketplace in which insurance companies could offer a menu

of options. Each employer would then be responsible for offering this menu of options

to each new employee. Workers could choose high, medium, or low coverage. Everyone,

though, would have to be covered. Depending on the employer, he or she would cover

part or all of the premiums and the employee the rest. But employers would not be

responsible for negotiating plans with insurance companies, where they have little

individual clout.

The state or federal pools would do that. This way employees would be totally mobile

and could take their health-care coverage wherever they went. This type of plan has

worked like a charm for members of Congress, so why not offer it to the wider public?

Needy and low-income workers who could not afford to join a plan would get some

government subsidy to do so. But the main idea is to establish a government-supervised,

-regulated, and -subsidized private insurance market in which government sets the

broad rules so that there is no cherry-picking of healthy workers or arbitrary denial

of treatment. The health care itself is administered privately, and the job of

employers is to facilitate their workers' entry into one of these state pools and,

ideally, help them pay for some or all of the premiums, but not be responsible for

the health care themselves. In the transition, though, employers could continue to

offer health-care plans as an incentive, and workers would have the option of

going with either the plan offered by their employers or the menu of options available

through the state purchasing pools. (For details, go to ppionline.org.)

One can quibble about the details of any of these proposals, but I think the basic

inspiration behind them is exactly right: In a flattening world, where worker security

can no longer be guaranteed by Fortune 500 corporations with top-down pension and

health plans, we need more collaborative solutions-among government, labor, and

business-that will promote self-reliant workers but not just leave them to fend for

themselves.

When it comes to building muscles of employability, government has another critical

role to play. Each century, as we push out the frontiers of human knowledge, work

at every level becomes more complex, requiring more pattern recognition and problem

solving. In the preindustrial age, human strength really mattered. Strength was a

real service that lots of people could sell on the farm or in the workshop. With the

invention of the electric motor and steam engine, though, physical strength became

less important. Small women could drive big trucks. There is little premium for

strength anymore. But there is an increasing premium for pattern recognition and

complex problem solving, even down on the farm. Farming became a more

knowledge-intensive activity, with GPS satellites guiding tractors to make sure all

the rows being planted were straight. That modernization, plus fertilizer, put a lot

of people out of work at the previous wage they were earning in agriculture.

Society as a whole looked at this transition from traditional agriculture to

industrialization and said, "This is great! We will have more food and better food

at lower costs, plus more people to work in factories." However, muscle-bound field

hands and their families said, "This is a tragedy. How will I ever get a job in the

industrial economy with only muscles and a sixth-grade education? I won't be able

to eat any of that better, cheaper, plentiful food coming off the farms. We need to

stop this move to industrialization."

Somehow we got through this transition from an agriculture-based so-

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ciety one hundred years ago to an industrial-based one-and still ended up with a higher

standard of living for the vast majority of Americans. How did we do it?

"We said everyone is going to have to have a secondary education," said Stanford

University economist Paul Romer. "That was what the high school movement in the early

part ofthe twentieth century was all about." As economic historians have demonstrated

in a variety of research (see particularly the work of Harvard economists Claudia

Goldin and Larry Katz), both technology and trade are making the pie bigger, but they

are also shifting the shares of that pie away from low-skilled labor to high-skilled

labor. As American society produced more higher-skilled people by making high school

mandatory, it empowered more people to get a bigger slice of the bigger, more complex

economic pie. As that century progressed, weadded, on top ofthe high school movement,

the GI Bill and the modern university system.

"These were big ideas," noted Romer, "and what is missing at the moment is a political

imagination of how do we do something just as big and just as important for the

transition into the twenty-first century as we did for the nineteenth and twentieth."

The obvious challenge, Romer added, is to make tertiary education, if not compulsory,

then government-subsidized for at least two years, whether it is at a state university,

a community college, or a technical school. Tertiary education is more critical the

flatter the world gets, because technology will be churning old jobs, and spawning

new, more complex ones, much faster than during the transition from the agricultural

economy to the industrial one.

Educating more people at the tertiary level has two effects. One is that it produces

more people with the skills to claim higher-value-added work in the new niches. And

two, it shrinks the pool of people able to do lower-skilled work, from road maintenance

to home repair to Starbucks. By shrinking the pool of lower-skilled workers, we help

to stabilize their wages (provided we control immigration), because there are fewer

people available to do those jobs. It is not an accident that plumbers can charge

$75 an hour in major urban areas or that good housekeepers or cooks are hard to find.

America's ability from the mid-nineteenth century on into the mid-

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twentieth century to train people, limit immigration, and make low-skilled work

scarce enough to win decent wages was how we created a middle class without too

disparate an income gap. "Indeed," noted Romer, "from the end of the nineteenth

century to the middle of the twentieth, we had a narrowing of the income gap. Now

we have seen an increase of that gap over the last twenty or thirty years. That is

telling us that you have to run faster in order to stay in the same place." With each

advance in technology and increase in the complexity of services, you need an even

higher level of skills to do the new jobs. Moving from being a farmhand to a phone

operator who spoke proper English and could be polite was one thing. But moving from

being a phone operator after the job got outsourced to India, to being able to install

or repair phone-mail systems-or write their software - requires a whole new leap

upward.

While expanding research universities on the high end of the spectrum is important,

so is expanding the availability of technical schools and community colleges.

Everyone should have a chance to be educated beyond high school. Otherwise

upper-income kids will get those skills and their slice, and the lower-income kids

will never get a chance. We have to increase the government subsidies that make it

possible for more and more kids to attend community colleges and more and more

low-skilled workers to get retrained.

JFK wanted to put a man on the moon. My vision is to put every American man or woman

on a campus.

Employers have a critical contribution to make to lifetime learning and fostering

employability, as opposed to guaranteed employment. Take, for instance, CapitalOne,

the global credit card company, which began outsourcing elements of its backroom

operations to Wipro and Infosys in India over the past few years. Competing in the

global financial services market, the company felt it had to take advantage of all

the cost-saving opportunities that its competitors were. CapitalOne began, though,

by trying to educate its workers through workshops about the

company's competitive predicament. It made clear that there is no safe haven where

lifetime employment is possible anymore -inside Capital-One or outside. Then it

developed a whole program for cross-training of computer programmers, those most

affected by outsourcing. The company would take a programmer who specialized in

mainframes and teach him or her to be a distributed systems programmer as well.

CapitalOne did similar cross-training on its business side, in everything from auto

loans to risk management. As a result, the workers who were eventually let go in an

outsourcing move were in a much better position to get new jobs, because they were

cross-trained and therefore more employable. And those who were cross-trained but

retained were more versatile and therefore more valuable to CapitalOne, because they

could do multiple tasks.

What CapitalOne was doing, out of both its own self-interest and a feeling of

obligation to workers it was letting go, was trying to make more and more of its workers

into versatilists. The word "versatilist" was coined by Gartner Inc., the technology

consultants, to describe the trend in the information technology world away from

specialization and toward employees who are more adaptable and versatile. Building

employee versatility and finding employees who already are or are willing to become

versatilists "will be the new watchword for career planning," according to a Gartner

study quoted by TechRepublic.com. "Enterprises that focus on technical aptitude alone

will failto align workforce performance with business value," theGartner study said.

"Instead, they need to build a team of versatilists who build a rich portfolio of

knowledge and competencies tofuel [multiple] business objectives." The Gartner study

noted that "specialists generally have deep skills and narrow scope, giving them

expertise that is recognized bypeers but seldom valued outside their immediate domain.

Generalists have broad scope and shallow skills, enabling them to respond or act

reasonably quickly but often without gaining or demonstrating the confidence of their

partners or customers. Versatilists, in contrast, apply depth of skill to a

progressively widening scope of situations and experiences, gaining new competencies,

building relationships, and assuming new roles." TechRepublic quoted Joe Santana,