Unemployment is hovering around 5.5 percent – but it would be much higher if the millions of people who have dropped out of the job market or are forced to work part-time instead of full-time were counted. Yet, there are 5.1 million open jobs – more open jobs last month than at any point since January 2001. So what’s the disconnect? It’s more fundamental than we think.
Some economists say today’s economy has progressed from an industrial and manufacturing economy to a “knowledge economy.” The middle class jobs of the past required a high school diploma to hold down many jobs. Technology can and has replaced that many manual labor jobs, driving down overall costs for companies. Clerical, construction, and production jobs have been declining. Positions that require post-secondary education or training are on the rise. These positions many of which are in healthcare, mechanical maintenance, and some services offer hope for the workforce, but workers need to be equipped with the skills to fill them.
Companies are finding it difficult to fill their open positions. Inc. Magazine reported on several national surveys last year that indicated just that. Almost four in 10 U.S. employers told staffing company Manpower in an annual talent shortage survey that they were having difficulty filling jobs. In a survey of Inc. 5000 CEOs in 2013, 76 percent said that finding qualified people was a major problem.
Whose responsibility is this problem? Some economists want to blame businesses for not providing training to entry-level workers but are instead calling on the (government-funded) education-system to do so. Other economists blame businesses for not raising wages to attract new talent. The Fiscal Times reports on the problem with recommendations from the private and public sector:
[Harry J.] Holzer, a professor at Georgetown University's McCourt School of Public Policy], proposes a three-part plan to boost both the number of middle-skill jobs in the U.S. and the number of people qualified to fill them.
First, he says, the government needs to reallocate higher education funding toward community colleges and lower-tier four-year schools, while simultaneously "creating incentives and accountability by basing state subsidies on student completion rates and earnings of graduates."
He calls for expanding access to career and technical education programs and as well as access to on-the-job training programs such as apprenticeships.
Finally, he says, the government ought to be "assisting and incentivizing employers to create more good jobs. Other supportive policies — including higher minimum wages, paid parental leave, and labor law reform — would help as well."
However, Stephen Moore explains in Forbes that government deserves blame for why our workers aren't working or aren't prepared to work:
Three years ago the chronic disease of the economy was a shortage of jobs. This shortage persists in many sectors. But two other shortages are now being felt—the shortage of trained employees and of low-skilled employees willing to work.
So why aren’t workers filling these available jobs—or getting the skills necessary to fill them. I would posit these impediments to putting more Americans back to work:
1) Government discourages work.
Welfare consists of dozens of different and overlapping federal and state income support programs. A recent Census Bureau study found more than 100 million Americans collecting a government check or benefit each month.
2) Our public school systems often fail to teach kids basic skills.
Whatever happened to shop classes? We have schools that now concentrate more on ethnic studies and tolerance training than teaching kids how to use a lathe or a graphic design tool.
Charter schools can help remedy this. Universities are even more negligent. Kids graduate from four-year colleges with little vocation training and with debt averaging more than $25,000—although this number now commonly exceeds $100,000 at some universities.
5) Higher education has become an excuse to delay entry into the workforce.
Here’s an even better idea: abolish federal student loans and replace the free government dollars with privately sponsored college work programs.
A renewed focus on working would also help erode the entitlement mentality ingrained in so many millennials. Instead of more benefits and handouts, this generation needs to get a job.
Neither Moore nor Helzer point solely to the private sector or government. Government policies and failure to effectively educate our future labor force are a part of the problem. We need solutions that move us beyond the “let’s do what we’ve always done” mindset. Innovation and technology are changing our economy and until we acknowledge and adjust for that, labor will always lag behind.
Families and individuals play a big role here too. As Moore indicates, as a society we have to change our perception of what are good careers and students would do well to pursue majors and degrees or training that can provide them with the skills for a career.
There’s also a misperception that college is necessary for every child that needs to be corrected. Careers in trades and services are wonderful for some our kids, but the stigma attached to them -driven by progressives- shames everyone to push for college when in fact, that should be a decision per student. Every child should find post-secondary school and pursue additional education or training for a career that sets them up for success. That doesn’t have to be – and for some that shouldn’t be – college.
Until we tackle these mindsets and polices, this gap will continue to widen and I fear that this will increasingly be the case.