How do I get students to think about the topic of human capital?

I ask them, what is the single most valuable resource in the world? 

Oil, water, air? 

“People” is usually a tentative answer, indicating uncertainty about the meaning of a resource. 

Once it is established that a resource is anything that produces goods and services, people, or human capital is reasonably understood. 

I ask for examples. This is always interesting. High school students are deep in the manufactured college application frenzy, convinced that “declaring a major” projects confidence about their future academic plans. Beyond categories such as engineering, computer science, International Relations. or Psychology, students are seldom exposed to the enormity of tasks performed – jobs- that exist even within their intended field of future study. 

I then describe a few. A deep sea welder is a scuba expert, who might only spend two hours in the work day hundreds of feet under the sea welding pipes and equipment. A radiation oncologist spends much of her time with patients establishing a relationship over the course of treatment(s) while in close consultation with surgeons and a variety of other medical specialists while studying scans, bloodwork and other data. An iceberg mover is an expert in maritime navigation, working closely with oil companies and environmental agencies, using technology to monitor and even tow icebergs by ship or tugboats to ensure offshore infrastructure. A pet food tester uses his senses to work closely with nutritionists and product developers ensuring  recipes for quality, taste, texture, consistency, spoilage, and overall palatability. I have fun with this ever changing part of my presentation, showing images of workers in their unusual environments.

The reality is that most of us will spend in excess of 100,000 hours in our lifetime exchanging our valuable human capital for income in what will likely be a nonlinear succession of jobs within and across fields, where only some of us might achieve expertise in a particular area of work. (A marvelous opportunity to relate the concept of scarcity to the value of field expertise as this concept is introduced in the first week of class). Thinking about human capital at a personal level helps students relate the concept to a macro level of a country’s factors of production. 

Forever presented as land, labor, and capital, with entrepreneurship added in recent decades, the factors of production are a foundation for understanding economies. Humans (not governments) make decisions to combine these factors of production into goods and services according to changing individual and collective needs and wants. It is the scarce resource of labor, in a global population of 8.25 billion people, that provides the physical and intellectual work that produces goods and services. 

Here I like to revisit the profound wonder of living in a free and responsible society in which our tastes and preferences differ. Our ability to choose among so many options is as significant in our work life as it is in our daily ability to choose the products that satisfy our needs and wants. Additionally, and relevant to our personal choices, is our ability to elect representatives to pursue our community and country’s direction of choice and make decisions about the use of scarce resources. I remind students that this phase of life that will include college and a first job for most (from the elite high school where I teach) is temporary. Some will earn a degree and some will leave before attaining one to begin that first “real” job. They will face many professional and personal decisions in their lives that will affect the trajectory of their careers. 

A follow up assignment is to take students through a brief  guided tour of the BLS website. I then encourage students to explore the Occupational Outlook Handbook and to collect information on at least three job titles, including levels of education needed, median salaries, and projected growth rate. I also have them list five or six specific job titles within a larger category of career interest including some they have never heard of or imagined. The site holds a wealth of regularly updated data that is more interesting to young people than even they can imagine before the day’s lesson. 

A related but quite different factor of production requires a separate day of teaching. Entrepreneurship. I’ll share that soon. 

 

Alice Temnick is an IB Economics Instructor for the United Nations International School in New York City.