We Can’t Legislate Job Skills

“Why can’t we find enough good people to hire?”

As a consultant to business leaders, I hear this complaint with increasing frequency. From  tradesmen to programmers, and from executives to scientists, we seem to be lacking a workforce with the skills and work ethic that businesses seek.

The Federal Reserve Bank is the only central bank with a dual mission to control both inflation and unemployment. An official from the Fed recently told me that we are presently experiencing a historically high rate of long-term unemployment, simultaneous with the highest number of help wanted advertisements in history. That seems to make no sense.

Self-serving political announcements praise the pace of job creation since the Great Recession, but the numbers are deceiving. The U-3, or “official” unemployment rate, counts anyone who works one hour a week as employed, and ignores those who have given up trying to find a job. The Federal Bureau of Labor Statistics also publishes what is designated the U-6 unemployment rate. Unlike the U-3, it includes those who work part-time but would prefer a full time job, and those who have given up looking but say they would take a job if it was offered. That number still stands at over 11% of the workforce. More than one in ten American workers, or around 15,000,000 people, can’t find a job that supports them satisfactorily.

So why are employers complaining? Has the quality of jobs declined, or are workers less able? The answer is a qualified “yes” to both.

The American middle class has been shrinking for the last 20 years. According to economists, technology is the culprit both here and throughout all of the developed economies. Robots on assembly lines, electronic outreach instead of face-to-face sales calls, and a general thinning of middle management ranks all act as cruel Darwinism. If you don’t have the new skills needed to move up the socioeconomic food chain, you move down. Standing pat for your entire career is no longer an option.

career ladderWhile those who lack the skills to follow the better paying jobs find their lifestyles suffering, employers are desperately searching for employees with the qualifications to fill positions higher on the ladder. Scientists, engineers, accountants and skilled leaders of all kinds are in short supply. Too many of them are part of the retiring over-50 Boomer generation, and the educational system isn’t backfilling the gap.

The employers’ logical answer has been to continue replacing duplicable skills with computers, so they are able to pay even more to those employees who can demand it. Wealth transfer taxes to shore up the middle class don’t really address the underlying problem. In the long run, no legislation has ever defeated the law of supply and demand.

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5 Responses to We Can’t Legislate Job Skills

  1. Great article. I agree that the numbers have to be skewed that government is reporting. And I believe our Govt. is the biggest problem. Our Unemployment laws need to be seriously revised. If someone works and then gets seriously sick or injured, it makes sense to help them with unemployment for a longer period of time, because they earned it. We need to address the younger people. We have two MAJOR issues:
    1. Is the fault of our society and their parents — this younger working age generation are spoiled rotten and suffering from a severe case of ENTITLEMENT. I see it every day. Why should they work hard, or even show up to work, when Daddy just bought them a new car, and pays for everything.
    2. It is way too easy to file and collect unemployment, and it lasts too long. I post an ad on Craigslist at least once a month. The amount of responses is usually pretty good. However, I’m lucky if 1 in 6 scheduled interviews even show up. And even then, they usually don’t ever show for the job I hired them for. And I know what their doing — they’re checking off the box that they’re “looking, but can’t find anything” so they can continue receiving unemployment. I can vouch that there are more jobs than people, but it sure doesn’t seem that way.

  2. Nor can we legislate respect, work ethic, self-motivation and personal responsibility. Recently read an article stating we are who we are by the age of 12. Parents are the key to improving the workforce, not the school, government or the day care provider. Children are not possessions like cares or houses. They are a lifetime commitment and one’s enduring legacy of their contribution to society.

  3. Great Article. A subject that is close to my heart, and as a matter of fact, is what made this country so great..in the first place..” The Middle Class”. Where is the middle class, did they just disapear, and the jobs that went with them disapear as well. Is the new generation so spoiled, that they refuse to work? Does it make more finacial sense to go on longterm unemployment, wellfare or disability, than to get a JOB?

    The wriing in already on the wall, just look at the numbers. Who’s fault is it…you might ask….An even better question is how do we FIX it.

    • John F. Dini says:

      The fix is complex and long-term. I see no signs that the entitled class will go away, since their parents are leaving them something like 15 trillion dollars. For many, that points to another generation to follow of kids who never had to scratch to make it. They may look up one day and find that they’ve been passed over. Those who wake up and follow market needs (STEM, trades, non-legal mid-market professionals) will be the new middle class regardless of their socioeconomic background.

  4. Lou Thomas says:

    Great article. Being self-employed, myself as a contractor for 40 years I have to keep up on all of the changes in construction. Many times it is online courses from manufactures. It has to be a personal thing if you want to keep up. People need to be self motivated to get a head in this world.

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