We’re Losing The Jobs War
I usually try to write an upbeat column about leadership and ways that leaders can improve their organizations’ performance. But I can’t do that without also pointing out when leaders fail to provide leadership where it is critically needed.
The simple fact is that we are getting our butts kicked in the global market because our business, education, and government leaders have been lackadaisical about preparing our society to compete globally in the middle-skills jobs area. Evidence for this failure is the May unemployment report, which presents an increasingly scary scenario:
Unemployment is at 7.6 percent, a slight increase from the previous month, with 11.8 million people out of work.
The higher-paying factory sector lost 8,000 jobs in May while growth continues in low-paying sectors.
Since the recession ended, more than half of new jobs have been in low-paying sectors.
Wages over the past three months have not kept pace with inflation.
About 6.3 million jobs have been added since February 2010, but that is still 2.4 million fewer than the peak in January 2008, and the slowest labor-market recovery since World War II.
Long-term unemployment (more than 27 weeks out of work) is holding steady at 4.4 million workers. The U-6 jobless rate (which includes those working part time because they can’t find full-time work) is holding at 13.8 percent.
At the current pace of job growth, the economy will not be back to full employment for eight more years.
Is this as good as it gets? Have we settled for growth coming from low-paying jobs in the leisure, hospitality, and retail sectors? Has the momentum been lost for higher-paying STEM (science, technology, engineering, and math) jobs? Are we settling for a shrinking middle class? I’m afraid the answer is a big, fat, ugly “YES.” And despite all the rhetoric from some corners in Washington, it is not entirely the government’s fault.
We’ve got a problem, folks, and it’s a big one. According to a recent report from the Brookings Institution, about 69 million people, or 48 percent of the labor force, work in middle-skills jobs, and this number is expected to grow significantly as the baby boomers retire. Recent data compiled by labor market experts suggest that 47 percent of all new job openings for the next 10 years will be in the middle-skills area. The shortage of workers in this area is already damaging America’s global competitiveness, prompting companies to move operations overseas. And because I don’t hear people jumping up and down in outrage, I fear that our biggest problem is not that we don’t know how to create good jobs; rather, it is apathy. We’ve lost the will to even try.
Maybe it’s because we think it’s someone else’s problem. In a global economy, we are in a tough competition that takes an entire team to win: The education system needs to teach students the skills they need to compete, the business community must innovate to create more good-paying middle-level STEM jobs, and the government must stop wasting time and money on anything but creating job growth. That’s why we need leaders to unite these groups with a common purpose to create higher-paying jobs.
Some leaders in business, education, and government are trying to solve the problem, with good results. I don’t want to belittle the hard work already underway. But the problem is so huge it will take more effort by more people to fix it.
Many business leaders say the problem is they can’t find enough workers with STEM skills, and they blame the K–12 education system for failing to educate enough students in math and science.
The facts aren’t encouraging here: According to Change the Equation, a nonprofit CEO-led initiative to improve STEM learning in the United States, only 45 percent of high school graduates in 2011 were prepared for college-level math courses and only 30 percent were prepared for college-level science courses. Change the Equation has several initiatives that partner major technology-based corporations with various school systems.
Only 15 percent of U.S. college graduates major in STEM areas, and this percentage has remained constant for the past two decades while demand for these skills has grown exponentially. We are programmed to believe that to get a good job one needs a four-year college degree. It’s true that people with that kind of credential generally earn more, so it makes sense for the public K–12 system to give students the skills they need to be college-bound.
But the practicality of it is that not every high school student is cut out for or can afford that path.
Wouldn’t we be more effective in getting people into good-paying middle-level jobs if we put just as much emphasis on skills-based high-school classes, community and technical colleges, skilled-trade apprenticeships, online technical certifications, and so on? About 50 percent of STEM jobs are performed by people with an associate degree or less—nursing assistants, medical technicians, manufacturing technicians, and machinists who turn innovative ideas into real products and services and provide the middle-level skills of the middle class.
In the Twin Cities, 22 percent of all employment is in a STEM field (19th among the country’s top 100 metro areas), and 44 percent of those jobs are held by technical workers without a four-year degree.
Business leaders who whine about the lack of workers with middle-level STEM skills should recognize that education system progress is too slow to fix the immediate skills shortage. Instead, they need to step up and fix the problem themselves. It’s long past time to initiate regional and/or industry collaboration with technical colleges and unions to provide advanced skills training for middle-level workers. We need initiatives to unite businesses, community colleges, and unskilled and displaced workers. And we need more business and industry volunteers to encourage and mentor students interested in middle-level STEM careers.
If I could grade our politicians in jobs creation, I’d give them an F. Political gridlock, deficit reduction, and health care reform seem to be more important to them than educating young people for higher-paying jobs and creating those jobs for the middle class. If this economic apathy continues, our democracy will be in peril. Maybe it’s our fault for believing campaign rhetoric that told us they could fix the problem, when we should have known that success in the jobs war depends on leadership from the private sector.
To make America more competitive, government should provide specific grants to incentivize innovation, collaboration, and middle-level skills training. Then government should get out of the way of businesses trying to innovate.
I have outlined a vision that can fix wage stagnation, raise living standards, and create a growing middle class. The jobs war can be won, but we need to realize we are in one. It’s time we all do our part.
Mark W. Sheffert (mark@manchester companies.com) is founder, chairman and CEO of Manchester Companies, Inc., a Minneapolis-based performance improvement, board governance, and litigation advisory firm.