Water America’s Talent – Ignoring America’s Talent Desert Won’t Solve the Problem! a guest blog from Edward Gordon.
We are now on an unsustainable labor economic course. A Deloitte and Manufacturing Institute 2018 Skills Gap study projected that 2.4 million manufacturing jobs would not be filled between 2018 and 2028 due to skills shortages with a potential loss of $2.5 trillion in economic output over that time period. We believe that other sectors of the U.S. economy will also experience significant economic losses because of the encroaching talent desert.
Reports of talent shortages continue to proliferate:
- The National Association of Manufacturers reported an all-time record high of over 500,000 vacant positions (September 2019).
- A National Association of Home Builders Survey found that over half of contractors had shortages in 12 of the 16 categories of construction work.
- An October 2019 member survey conducted by the National Federation of Independent Businesses (NFIB) reported that 53 percent of small business owners had great difficulty finding qualified workers (88 percent of those hiring), This year finding qualified workers has consistently been the top business problem in the monthly NFIB survey.
William Dunkelberg, NFIB Chief Economist warned, “If the widely discussed showdown occurs, a significant contributor will be the unavailability of labor — hard to call that a ‘recession’ when job openings still exceed job searchers.” This quote is based on official Bureau of Labor Statistics (BLS) reports: the 5.9 million Americans classified as unemployed (11/1/19) and the 7 million job openings reported in the Jobs Openings and Labor Turnover Survey issued on November 5. The BLS also reported that the number of U.S. vacant jobs has exceeded the number of unemployed for the past 17 months (August 2019).
In 1970, the United States had the world’s best educated and trained workforce. Today, America is a spreading talent desert with too many poorly educated workers who do not have the knowledge and skills to fill the new jobs of the 4th Industrial Revolution.
The official BLS estimate of unemployment (3.6% in the 11/1/19 report) is based on an extremely narrow definition: only those who actively sought a job in the past month are classified as being unemployed. We believe that this measure of unemployment is very misleading. The BLS also currently estimates that about 95.2 million Americans over the age of 16 are “not in the workforce.” This is a remarkably high number that has persisted since the 2008 recession.
The likely characteristics of the 95.2 million out-of-the-workforce Americans are:
- Approximately 55 million people over age 55 have retired.
- What about the other 40+ million people not in the workforce?
- The latest official BLS survey of this group finds that nearly 4.4 million respond that they want a job.
- About 1.2 million report that family responsibilities, schooling, medical issues, or transportation or childcare difficulties are keeping them out of the workforce. A large number of people who lost their jobs in the wake of the 2008 recession have been unable to find full-time employment due to such factors as skill deficits, age discrimination, or inability to move to areas with relevant job opportunities.
- A variety of sociological data provide evidence that a sizable proportion of unemployed Americans are poorly educated and have few of the job skills businesses now demand.
We estimate that as many as 27 million Americans who are willing to work are educationally qualified but lack some skills needed for currently available jobs. Including the 5.9 million Americans who the BLS officially reports as unemployed, these 27 million Americans could potentially help fill the 10.5 million jobs we currently estimate are vacant across the United States provided that they receive training from employers to update their skills.
Based on these figures, the actual unemployment rate is over 16 percent!
Education to Employment
A September Rand Research Report warned that the education-to-employment pipeline has changed little from previous decades despite technological advances, globalization, and demographic shifts. This has resulted in major shortfalls of workers due to: (a) inadequate general elementary and high school education, (b) limited enrollment in and completion of post-secondary education programs, and (c) lack of access to lifelong learning and training supported by employers. We believe that a staged transformation into a suitable 21st-century education system should occur at the regional level involving the leadership of major community sectors. These programs are already underway in many communities. We have coined the term REgional TAlent Innovation Network (RETAIN) for such undertakings. They, however, have not yet gained enough traction to have an immediate impact on the overall unemployment situation. RETAINs however can improve community collaboration toward stronger education systems and workforce talent solutions.
The time has arrived for regional public-private collaboration rather than empty political and business rhetoric. It is better to rebuild quality workforces at local levels through systems of RETAINs and education solutions, rather than passively accepting continued skills declines.
Water the Talent Desert – Potential Solutions:
A desert can be watered in ways that bring new life to the landscape. The same is true in our American workplace – talent deserts can be overcome with a variety of solutions that can be implemented now, and over time, to increasing employability, reduce unemployment, and increase productivity.
- Reading Readiness: When a child is not reading at a level that establishes readiness for first grade, a year in reading readiness education is the right investment before advancing the child from kindergarten to the first grade. Successfully implemented in Indiana schools in the 1970s, reading readiness will benefit every child, school district, company (more prepared employees), government (more prepared citizens and employees), prison (reduced inmate populations) and community across the United States.
- Solve why students are not reading at grade level by grade three rather than advancing them without having provided proper interventions, tools, and help to achieve grade level reading.
- RETAIN implementation in communities across the US will…
- States must harness innovative brain power for business and job growth to occur. This looks like….
- The largest employers in a state must be for-profit rather than government on non-profits (which don’t pay property taxes – which in most states are the funding mechanism for education).
- Retrain adult workers.
- And more. Contact Ed Gordon for more information.
Edward E. Gordon is president and founder of Imperial Consulting Corporation (www.imperialcorp.com). His book, Future Jobs:Solving the Employment and Skills Crisis – the winner of an Independent Publishers Award, is now available in an updated 2018 paperback edition.