I AM A BUNDLE I AM A BUNDLE OF HUMAN OF HUMAN

CAPITALCAPITAL

Lesson 9:Lesson 9:

Human CapitalHuman Capital

““Skills” & Skills” & “knowledge”“knowledge”

““Skills” Skills” Something a person Something a person can docan do““knowledge” knowledge” Awareness & Awareness & Understanding of facts Understanding of facts & relationships& relationships

Math ContestMath Contest

6 volunteer contestants6 volunteer contestants 6 timers6 timers 6 checkers6 checkers

The ContestThe Contest

73503+ 54923 = 73503+ 54923 = 5694/123 =5694/123 = 3428 x 495 =3428 x 495 = 4982 – 2456 = 4982 – 2456 =

The ContestThe Contest

73503+ 54923 = 128,42673503+ 54923 = 128,426 5694/123 = 46.292685694/123 = 46.29268 3428 x 495 = 1,696,8603428 x 495 = 1,696,860 4982 – 2456 = 25264982 – 2456 = 2526

Contest ResultsContest Results

ContestContestantant

TimeTime # correct# correct

AA 3min3min 22

BB 4:204:20 22

CC 2:232:23 33

DD 7:157:15 33

EE 3:443:44 33

FF 4:324:32 22

EvaluatingEvaluating

Which Contestant Most SkilledWhich Contestant Most Skilled List reasons Why?List reasons Why?

Handling pressureHandling pressure Good math skillsGood math skills Time managementTime management Knows math factsKnows math facts Stayed focusedStayed focused Sense of self correctingSense of self correcting

List Things Pigs Can Do:

1. -

2. -

3. -

4. -

5. -

6. -

List Things Pigs Can Do”

1.1. -take bath-take bath2.2. -change tire-change tire3.3. -build road-build road4.4. -row boat-row boat5.5. -fly-fly6.6. -tie a tie-tie a tie7.7. -clean-clean8.8. -climb trees-climb trees9.9. -play the piano-play the piano10.10. -leap-leap11.11. -rocket to the moon-rocket to the moon12.12. -build a snow hog-build a snow hog

13.13. -flew-flew14.14. -play bongoss-play bongoss15.15. -can can-can can16.16. -make cake-make cake17.17. -tickle-tickle18.18. -stop wars-stop wars19.19. -serve tea-serve tea20.20. -stretch-stretch21.21. -sled-sled22.22. -sing-sing23.23. -repairs-repairs24.24. -rake-rake25.25. -tall truth-tall truth26.26. jumpjump

Your SkillsYour Skills(Things you can do)(Things you can do)

__________________________________________________

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Your KnowledgeYour Knowledge(Things you know)(Things you know)

__________________________________________________

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The I Can CanThe I Can Can

Relative income: why?Relative income: why?

$5 million$5 million

$50,000$50,000

What determines What determines a person’s income?a person’s income?

SUPPLY of and DEMAND for their HUMAN CAPITAL

High or Low IncomesHigh or Low Incomes HighHigh demand, demand, lowlow supply supply HighHigh income income lowlow demand, demand, HighHigh supply supply lowlow incomeincome

Wage isWage is the measurement of scarcity of particular types the measurement of scarcity of particular types

of workers.of workers. If you want a high incomeIf you want a high income, ,

develop skills and knowledge in high demand develop skills and knowledge in high demand with low supply. with low supply.

Make yourself ScarceMake yourself Scarce

MAKE YOURSELF MAKE YOURSELF SCARCE!!!!SCARCE!!!!

THE NEW LABOR MARKETTHE NEW LABOR MARKETThat was then, this is now That was then, this is now

THEN NOW

GLOBAL COMPETITON, RAPIDLY CHANGING TECHNOLOGY

BASIC SKILLS REQUIRED: ASSEMBLY LINE

Job Job ApplicationApplication

What can What can you do for you do for Uncle Jed?Uncle Jed?

Insert on this slide job application on page 123?? Or use in lesson 10, school improves human K?

Manufacturing

Agriculture

Service

Knowledge

ImaginationInformation

The U.S. The U.S. EconomyEconomy

The Demand for Labor The Demand for Labor is a Derived Demandis a Derived Demand

Business managers hire workers to Business managers hire workers to produce a good or service that can be sold produce a good or service that can be sold for a profit. for a profit.

Product demand changes so Product demand changes so particular jobs change.particular jobs change.

Transferable skills are useful.Transferable skills are useful. Education and training are ongoing. Education and training are ongoing.

Table I: Then and nowTable I: Then and nowThe Information/ Knowledge Age

Technology change

Competition

Type of production

Role of workers

Skill requirements

Employment

Learning span

The Industrial Age

Took years to accomplish

Local, state, national

Manufacturing

Manual Laborer

Strength, dexterity, stamina

Lifetime with one employer

Kindergarten-12th grade

Months, weeks to accomplish

Global

Service, info, knowledge

Designer, engineer, manager

Scans (see Table II)

Change jobs at least six times, careers three times

Lifetime

The Principle of The Principle of ExchangeExchange

““Employers will hire Employers will hire workers if they gain workers if they gain

more from hiring more from hiring them than they give them than they give

up.” up.”

All other things All other things being equalbeing equal

““higher education higher education

leads to higher leads to higher income”income”

Dreams Deferred: Dreams Deferred: Average Earnings and Education for Average Earnings and Education for

Adults, 2002Adults, 2002

0

20000

40000

60000

80000

100000

120000

Education

Earnings

Dropout

High School

Some College

Associate's

Bachelor's

Master's

Doctorate

Professional

Source: U.S. Census Bureau, Statistical Abstract of the United States: 2004 - 2005

If you want a good income, If you want a good income,

Develop marketable skills Develop marketable skills through:through: more educationmore education more trainingmore training

What skills are likely to be What skills are likely to be marketable?marketable?

make yourself scarce.make yourself scarce.

http://wdr.doleta.gov/SCANS/lal/lal.pdf

Table II: SCANS 2000Table II: SCANS 2000(Labor) Secretary's Commission on Achieving Necessary Skills(Labor) Secretary's Commission on Achieving Necessary Skills

Skills DescriptionsBasics

Thinking

Personal

InterpersonalSystems

InformationTechnology

Resources

Reading, writing, mathematics, listening, speaking

Creative thinking, decision making, problem solving, knowing how to learn, reasoningResponsibility, self-esteem, sociability, self management, integrityPlanning, organizing, monitoring, assessing, evaluating, adjustingTeamwork, teaching, serving clients/customers, leadership, negotiating, working with people of diverse cultural backgrounds

Understand social, organizational and technological systems; monitor and correct systemsAcquiring and evaluating, organizing and maintaining, interpreting and communicating, using computers to process information

Selecting equipment and tools, applying technology to specific tasks, maintaining and troubleshooting technologies, learning new technologies

Basic SkillsBasic Skillsreadingreadingwritingwritingmathematicsmathematics listeninglisteningspeakingspeaking

Thinking SkillsThinking Skillscreative thinkingcreative thinkingdecision-makingdecision-makingproblem solvingproblem solvingvisualizingvisualizingknowing how to learnknowing how to learnreasoningreasoning

Personal QualitiesPersonal Qualitiesresponsibilityresponsibilityself--esteemself--esteemsociabilitysociabilityself-managementself-management integrityintegrity

Resource Resource AllocationAllocation

planningplanningorganizingorganizingmonitoringmonitoringassessingassessingevaluatingevaluatingadjustingadjusting

Interpersonal Interpersonal SkillsSkills

team skillsteam skills teachingteaching serving clients/customersserving clients/customers leadershipleadership negotiatingnegotiating working with people of diverse working with people of diverse

cultural backgroundscultural backgrounds

Systems - Social, Systems - Social, organizational, and organizational, and

technologicaltechnological

understandingunderstandingmonitoringmonitoringcorrectingcorrecting

InformationInformationacquiring and evaluatingacquiring and evaluatingorganizing and maintainingorganizing and maintaining interpreting and interpreting and

communicatingcommunicatingusing computers to processusing computers to process

TechnologyTechnology selectingselecting applying to specific tasksapplying to specific tasks maintaining and maintaining and

troubleshootingtroubleshooting keeping up to datekeeping up to date learninglearning

To compete To compete in a global in a global

economy, you economy, you will need will need

these skillsthese skills

The Mirror: An The Mirror: An Incredibly Powerful Incredibly Powerful Package of Human Package of Human

Capital!Capital!

YouYou are are the only the only one who one who

can can develop develop youryour

human human capital….. capital….. not your not your teachers, teachers, not your not your parents, parents, Only Only YOUYOU

The hiring decision and The hiring decision and the constant search for the constant search for

substitutessubstitutes Hire you?Hire you?

Hire a different worker?Hire a different worker?

Hire a machine?Hire a machine?

QuestionQuestion

In the mid to late 19In the mid to late 19thth century, century, unskilled workers flooded the U.S. unskilled workers flooded the U.S. labor market.labor market.

Due to high transportation costs to Due to high transportation costs to move west, many of these workers move west, many of these workers were “stuck” on the East Coast.were “stuck” on the East Coast.

What would you expect would be true What would you expect would be true about their wages? about their wages?

Does your answer suggest that Does your answer suggest that employers were cruel and heartless? employers were cruel and heartless?

MAKE YOURSELF MAKE YOURSELF SCARCE!!!!SCARCE!!!!

Some SkillsSome Skills ReadsReads WritesWrites Counts, adds, Counts, adds,

subtractssubtracts ListensListens Speaks clearly, using Speaks clearly, using

proper grammarproper grammar Accepts Accepts

responsibility, responsibility, doesn’t make excusesdoesn’t make excuses

Completes work on Completes work on timetime

Uses a computer to Uses a computer to accomplish tasksaccomplish tasks

Cooperates with Cooperates with others to get a job others to get a job donedone

Cooperates with Cooperates with others at playothers at play

Follows instructionsFollows instructions PerseveresPerseveres TeachesTeaches Works well aloneWorks well alone

Human Capital InventoryHuman Capital Inventory

Teaching Human CapitalTeaching Human Capital Investing Hope: The Story of Cesar Investing Hope: The Story of Cesar

ChavezChavez A is for Abigail: An Almanac of Amazing A is for Abigail: An Almanac of Amazing

WomenWomen Ten Queens: Portraits of Women of PowerTen Queens: Portraits of Women of Power Lives of Extraordinary WomenLives of Extraordinary Women Martin Luther King, Jr., George Martin Luther King, Jr., George

Washington, Mahatma Gandhi, Nelson Washington, Mahatma Gandhi, Nelson Mandela, Jacques Cousteau, Dr. Jonas Mandela, Jacques Cousteau, Dr. Jonas Salk, Che Guevara, Anne Frank, Mother Salk, Che Guevara, Anne Frank, Mother Teresa, Lech Walesa, Dalai LamaTeresa, Lech Walesa, Dalai Lama

Who are your heroes? What Who are your heroes? What did they achieve? What did they achieve? What

human capital enabled them human capital enabled them to achieve what they did?to achieve what they did?

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