The most recent Labor Department's job growth report shows that the American economy added 192,000 jobs last month, not as much as some analysts predicted. The unemployment rate of 6.7 percent still persists at relatively high levels, yet thousands of high-wage jobs need to be filled at companies across the country, right now.
What accounts for this disconnect? The high-wage jobs found in industries like aerospace, defense and bioscience require high-skilled employees, and there are simply not enough qualified people who can apply for and fill the positions.
In Southern Arizona where I live, we are at ground zero for this problem, and opportunity. In 2009, my colleagues and I at TREO (Tucson Regional Economic Opportunities, Inc.) conducted a community-wide survey of nearly 200 employers and found 2,200 open positions in fields like engineering and manufacturing. This was a time when the economy was reeling and overall unemployment was at 9.8 percent in the region and 10.2 percent nationally. Today, when the economy is better and unemployment lower, the number of openings in Tucson is closer to 2,500.
This disconnect between unemployment and unfilled jobs is mirrored across the country. In an Accenture 2013 survey of 400 executives at large U.S. companies, 46 percent said they do not have the skilled labor force they need to compete in a global economy. They said their greatest demands for skilled workers are in IT, engineering, research, development and sales. In March, CareerBuilder released its latest study on the effects of the skills gap on the U.S. labor market. Sixty percent of employers are concerned about the costs associated with delays in filling open positions, with one in four stating they have experienced losses in revenue as a result.
Additionally, exasperating the issue is the number of Baby Boomers who will be retiring more aggressively now that the stock market is performing better, as detailed in the book When the Boomers Baill: A Community Economic Survival Guide by Mark Lautman. Right now, there are not enough qualified younger workers to replace them.
The outlook is not hopeless, however. Based on my 15 years of economic development experience, I believe there are three solutions to addressing the shortage of highly skilled workers.
First, while the nation's universities graduate talented individuals ready to enter the workforce, a disconnect still exists between what the job industry needs and what the preschool through graduate school (P-20) system provides. The lack of workers able to fill high-skilled jobs requires reshaping education so that the goal is not simply a degree, but readiness for employment.
School districts and educational institutions should communicate so the educational curriculum aligns with the needs of businesses, in order to help students build the skills necessary to fill high-tech positions. This type of communication is happening in Southern Arizona in the fields of Science, Technology, Engineering and Math (STEM) education. For example, the largest private employer in the Tucson recently provided our largest school district with funds to train 50 teachers to improve their engineering instruction. Increased STEM training will lead to better prepared students entering a more technically-based economy.
Second, with short-term training and intentional education of current employees, companies can fill more high-skilled jobs. . Through Pima County's Technical Careers Pathway Grant in Arizona, for example, real life successes are unfolding. Sunquest is one grant recipient and 19 employees have gone through the training. After completing training, one employee earning $30,000 was promoted to Associate Project Manager with a 40 percent raise. Capital IDEA in Austin, TX, helps working adults move into higher level careers through education. Carreras en Salud in Chicago, IL, a bilingual healthcare partnership, bridges limited English-proficient individuals into nursing positions. These are great examples across the country that focus on increasing an individual's earning power through employer-driven training and need to be replicated to impact the national economy.
Finally, we need to transform the federal workforce development system. With a budget of $10 billion, the system has traditionally focused on the supply of talent, but it needs to be more demand driven. This will require increased involvement by executives and human relations directors of highly-technical companies to actively participate on local Workforce Investment Boards (WIB). In addition, resources should be directed toward programs that will fill a void experienced by a number of companies in order to maximize the output of trained individuals. Without industry input, those funds could be placed in programs that do not address long-term skills gap strategies.
Some people may argue that not everyone is a fit for the degrees required to qualify for these unfilled jobs. But actually excellent, high-paying positions exist at all levels in areas such as advanced manufacturing, skilled trades and more that do not require a degree.
The low hanging fruit in our sluggish recovery could be harvested in several ways: In the short term, retrain existing employees and job hunters to meet skills advertised in already open positions, and longer-term, ensure that workforce programs, educational systems and private industry are strongly aligned and connected with the skills needed for current and future job opportunities.
Laura Shaw has nearly 20 years of award-winning marketing experience in the business world, including 9 years with TREO, and she is a Public Voices Fellow with The OpEd Project.