In the post-industrial economy, employment is less a question of hiring a worker today, than of investing in human capital for tomorrow. It is less a question of finding someone who can complete tasks that need to be done now than of comparing the cost of committing to pay someone over several years (or perhaps even a full career) to the benefits of whatever future sales she/he might generate.

Part of this transition from computation of “a fair day’s pay for a fair day’s work” to discounted present value of return on investment analysis is the rigidity that our social welfare system has added to the labor market. For at least a century, we have used the employer-employee relationship as an alternative to or vehicle for tax collection. In hiring a worker, an employer is entering into the role of fiscal agent and, in many cases, contributor to, individual and family health, disability and life insurance programs, retirement programs, educational savings accounts and charitable donation decisions. Human resources departments have taken on the role of personal, financial and charitable “conscience” for the worker. Indeed, current research has shown that workers whose employers automatically sign them up for retirement plans save more than workers who must make a conscious decision to “opt in.”

The administrative costs of these tasks combined with the risk of running afoul of the rules governing them adds substantially to the cost of adding new workers, particularly for new and small enterprises. For them, the hiring question is not, “Do we need more workers today?” but “Can we be sure we’ll have enough new revenue to cover the direct plus indirect costs of a new worker two, three, five years down the road?” This fact alone turns the hiring decision from a current operations question into a long-term investment decision.

The second, and more important, reason why creating a job has become an investment decision is because the focus of the decision has increasingly shifted into the future, from what a potential new worker will do tomorrow to what she/he will do two, three, five years down the road. Because of the ever-accelerating pace of technological and social change, much of that “doing” isn’t even known today. Thus, the decision about hiring depends heavily on assessments about a would-be worker’s ability and willingness to grow, to learn, to be collaborative and flexible, to communicate and to be creative.

Such a “human capital analysis” view of “the job” has implications for both the employer and the would-be employee. For the employer, this concept of “a job” requires developing a strong sense of “enterprise culture,” of teamwork, of pride in a clearly understood common goal. Knowing that a new employee will generate a positive return on investment only with the acquisition of experience increases the importance of continuing on-the-job-training and mentoring by more senior employees. Maintaining human capital by thinking about the experience, skills and attitudes that successful employees need and designing ways to provide that experience is as important as maintaining clean, well cared-for physical capital.

For the employee, this “human capital” view means thinking less in terms of a current or hoped-for job and more in terms of a personal career, less in terms of my current income and more in terms of the future income stream that my current and hopefully improving skills and experience will be able to generate over my lifetime. Such a forward-looking, investment-analysis oriented viewpoint also implies a certain level of self-promotion, not in the sense of bragging about past accomplishments, but in the sense of anticipating an employer’s needs and suggesting new ways to meet them. In the new human capital economy, employers need to emphasize mentoring and the acquisition of experience, and the employee must emphasize fresh perspective, new views and new suggestions.

This new concept of the labor market presents Maine with great opportunities. We offer both a great place to live, work and build a family, and a vast array of opportunities to engage in civic and recreational activities. To make the most of these opportunities, we must do two things:

• First, we must vastly expand the flexibility of and interactions among our educational and businesses institutions. In the human-capital economy, learning is not acquired in one institution to be used later in another; it is continuous and interactive. To serve that reality our institutions must become far less rigid and far more porous.

• Second, we must broadcast a hearty “Welcome!” to the rest of the world. Rather than, the insular and somewhat smug “Maine, the way life should be,” our motto ought, more optimistically and confidently, to read, “Maine, the place to build your life.”

Charles Lawton is chief economist for Planning Decisions Inc. He can be reached at:

clawton@planningdecisions.com