Monday, April 28, 2008

Don't forget the Skills Gap

“Nearly one-third of all Americans – 76 million people – were born between 1946 and 1964. Boomer retirements are projected to open up 1 million jobs in Los Angeles County and 3 million in California in the next decade.”

“The question is, are we going to be a 21st century city with shared prosperity, or a Third World city with an elite group on top and the majority at poverty wages,” asked Ernesto Cortes Jr.,..of the Industrial Areas Foundation."

Teresa Watanable, “Shortage of skilled workers looms in U.S.,” Los Angeles Times, April 21, 2008

A few years ago the Aspen Institute projected zero growth of the native workforce in the coming decades; various economists have projected 35 million skilled job openings by 2030. Edward Gordon’s The 2010 Meltdown is a call to action to address this impending jobs crisis, the first year of baby boomer retirements.

I’ve always thought this impending skill shortage would force leaders and institutions to do the right thing – more boldly invest in our underutilized and marginalized communities. In other words, the economic need to fill jobs would galvanize multiple interests to support an equity and opportunity agenda. A first response, and a good one, is to let’s fix the schools. Not enough. A startling statistic is that two-thirds of the people who will be in the labor market in 2020 are already in the labor market today, meaning we’ve also got to invest in adult workers, those who are unemployed or underemployed, returning from prison, or who are low-skilled immigrants. To some degree, this leadership around skill shortages began to emerge selectively in the 1990s as Michael Bennett and I show in Economic Development in American Cities.

Surprisingly, there has been little national attention paid to the impending skills crisis, especially as the economy tanks. Or, the attention is on loss of jobs, outsourcing, etc. The business community hasn’t mobilized in force and there is little congressional browbeating. I have too many schizophrenic days when I listen to progressive economists, speaking nationally, saying we have a loss of middle skilled jobs, job polarization, a u-shaped distribution of good and bad job creation – the hourglass economy. The next day or hour I’m listening to health-care institutions in a specific region talk about the thousands of allied health jobs they can’t fill – right now.

A part of the problem is that both perspectives are right. When you factor in retirements and focus on specific industries and regions, the skill shortages jump into relief. When you aggregate nationally and look across industries and regions some of this skills gap disappears or looks more like a blip. And lack of skilled workers does not account for the loss of jobs or the change in job quality. And their is a looming abundance of skills globally, what Richard Freeman calls "The Great Doubling. But not all jobs will be offshored or digitized -- and immigration has its limits.

I guess this is one reason I’m a regionalist at heart. Both the economics and political rhetoric of cities and regions have a riveting concreteness. They feel the pain and more often figure out how to organize to something about it -- sometimes, not always.

A bright light on the skills gap issue is an effort to organize multiple and diverse constituencies around these shortages and the need for everyone to attain some post-secondary training -- the Skills2Compete campaign lead by The Workforce Alliance. Economists Harry Holzer and Robert Lerman have produced a framing study for the campaign, America’s Forgotten Middle-Skill Jobs, that concludes that “ Substantial demand remains for individuals to fill skilled jobs in the middle of the labor market, with many of these jobs paying quite high wages.”

So, what’s the problem? Why don’t we get more business and political take up to deal with this workforce and economic development challenge?


Josh said...

This is exactly why we need tax credits for low-income college students and increased funding for job training programs. My hopes on this front rest in a Democratic president and an extensive green jobs training program.

Colin Austin said...

I once asked Paul Osterman if the "skills shortage" narrative could grab some political attention. He was reluctant to say yes. We still seem to be searching for the right message and medium. The Youtube "Did you know?" series treats a variation on the theme, essentially appealing to competitiveness.

Bob Giloth said...

The issue of a more powerful workforce narrative, or story, is key because too often workforce has been thrown at problems it can't solve -- like outsourcing or loss of jobs. Any many people still think it doesn't work. Last year we asked eight workforce experts to fashion different narratives. These are available if anyone interested. And more work is being done to be shared soon.