How Is It That The Most Advanced Economy In the World Has Skills Mismatch Labor Shortages And Gross Unemployment?
Short Answer: There are undemocratically, unsustainable institutions in the U.S. that run counter to and conflict with sustaining and procuring a supply and recurrence of human capital that are adept enough to meet labor market demands. Since it is pertinent that we remain competitive in an increasingly globalized era, the crux of the issue lies squarely with the widely uneven regulation and education of public and parochial schools in the U.S. There are simply not enough opportunities out there.
Contrary to what many politicians and their economic advisors spew out, there is no evidence to support the notion that there is really a dearth of applicable skills for all those job openings. Companies post eggregious job offerings that are simply improbable and such credentials would not be consuumate with the wage offering. The Economic Policy Institute (EPI) has made it clear that there is strong consensus that the weak labor market is due to weakness in aggregate demand for labor.
When the job market is too industry specific it negates aggregate supply and aggregate demand in the total economy for sustainable growth.
There is a psychological element to this that is quite damaging to the morale of the unemployed “– it’s easier to blame workers for lack of skills rather than face the fact that millions cannot find work no matter what they do because the jobs simply are not there. That in turn makes it easy for stories and anecdotes about employers who cannot find workers with the skills they need to circulate unscrutinized”, as Heidi Shierholz reports for the EPI.
So even if you wanted to blame the unemployed for lacking the credentials to find jobs it is still the fault of our institutions for not promoting shared prosperity and economic sustainability.
Political Class Warfare Not Economic Class Warfare
Grossly enough, many people seem sanguine about their own prospects of fulfillment given the prevailing status quo within our institutions. Having the upper hand, a one-up, that entitlement or just being privileged in their social construct of a position has them socially invested firmly in the institutions that persistently give rise to disadvantages. Many will come across this piece and dismiss it as merely reverse-microaggressions of class warfare towards the upwardly mobile class but what they fail to recognize however is that it is pridefully American to upset the status quo.
This cynical fulfillment however has some consequential drawbacks that permeates throughout the social fabric of our nation by promoting disillusionment and discontent throughout many types of formal or informal socioeconomic relationships, or the lack thereof that necessitates nation building. Nation building is not a one-off thing, it is something that must persevere as the solution for sustainable economic growth. And it starts with basic education.
America’s education policy should be apolitical and set in the same way the nation sets its fiscal policy. If the Federal Reserve is “independent within the government” then so too should the the Department of Education. If monetary policy can be set evenly and broadly throughout the US, then so should education policy and goals be set broadly throughout. The March 2014 Data collection report on college and career readiness from the U.S. Department of Education Office for Civil Rights exemplify why this may serve as a major contributing factor to this perceived skills mismatch in labor demand in the US.
The well-heeled may feel that they are simply impervious to the uneven offering of quality education across the nation. Their preparedness is predicated on simple will and resources. Their exposure affords them the opportunity to succeed pretty much without fail.
Most elected politicians are not doing enough or are just incompetent with making sure public schools remain competitive with private schools as well as with schooling abroad. They would rather pick budgetary fights and foment an air of substandard quality towards public education as you will mostly find that their offspring do not attend public schools. They in fact create dilemmas that create stereotype threats or self-fulfilling prophecies for failing public school education, hence the proliferation of charter schools. There is persistent and unnecessary battles with teachers, teacher’s unions, school districts, and their governors, and the children are caught in the middle of it and paying the ultimate price, which spills over into our economy and way of life.
Quality education makes individuals less dependent on capitalistic market forces and less conducive to the cyclical and casualty nature of recessions and downturns of industries. Industries create market bubbles as they exploit resources for short term gain. They encourage schools to be too industry-specific to meet fleeting demands in the industry marketplace. They create labor demand that then implode upon the economic bubble bursting. A quality education provides the impetus to create competing alternatives tht dampen this impact.
When students are prepared and ready for college and a career this inherently comes with confidence to be creative, productive and succeed in the marketplace. Three endearing elements that hiring companies love. However they too have provided the fodder for the skills mismatch, wage stagnation, and income inequality that has besieged the nation.
In a compete reversal of business strategy focused on short-term, and isolated profit-sharing, companies seem to be moving in a different, yet silent direction. This has a lot to do with myopic corporate missions and political lobbying that has back-fired that have threatened sustainable growth. One important contributing factor is outsourcing and how it has directly lead to piracy, derogatory labor images, and labor strikes in outsourced nations that affect manufacturing and shipping. In the long run it has made doing business much more costly and has created socioeconomic instability domestically. Eduardo Porter sums it up nicely in his NY times piece in Corporate Efforts to Address Social Problems Have Limits.
Most interestingly, many executives say they believe the growing gap in income and opportunity is not just bad for the country, it is bad for business, too. It curbs consumer spending, undercuts worker morale and produces political polarization.
The most significant shift in corporate decision-making, he said, may stem from a serious re-evaluation of globalization.
The wave of outsourcing to cheap labor markets across the world is being reassessed in light of the growing importance of flexible production schedules and proximity to customers. In tech-heavy industries, piracy has increased the cost of outsourcing. In other businesses, automation and rising Chinese wages have changed the cost-benefit equation.
Now that some businesses seem to get it now, would somebody please translate it to politicians. The solution as you may find with most issues cannot be easily solved with a singular approach, but via multiple routes to a destination filled with opportunities for everyone to share and benefit in the economy and continue the nation building efforts in order to succeed through more shared prosperity.