by Julian L. Alssid
The unemployment rate fell below 10 percent in January to 9.7 percent. While this is positive news and a sign the stimulus may be kicking in, the mismatch between employer needs and the education and skills of much of the workforce remains. This was an issue before the Great Recession and it will persist and only get worse if we do not dramatically improve the way we prepare people for work in this country.
One of the factors contributing to the improvement in the unemployment number is the fact that more Americans have given up looking for work. In fact, the number of "discouraged job seekers" was at 1.1 million people in January, up from 734,000 this time last year. Added to this are those who are underemployed, working just a few days a week and not making enough to sustain a living wage, and you have about 16.5 percent of the workforce sitting on the sidelines or not being fully utilized.
The skills gap, or "skills recession," is a contributing factor to this phenomenon. Many employers involved in advanced manufacturing, health care and energy cannot find qualified workers, despite near record unemployment. Employers like Ace Clearwater Enterprises in California, which specializes in supplying parts to the aerospace and energy industries, which hired 70 people in 2009, only to see nearly half of them leave because they did not have the skills required to do the job. Or Spectrum Lighting in Massachusetts, which is having a hard time filling jobs because the local workforce doesn't have the expertise needed to work with more technically advanced "green" lighting systems.
Real wages have not improved for the average American in nearly a decade. Much of this has to do with the fact that many of the jobs Americans relied on for decades, blue-collar jobs that could be done with a high school education or a minimum of technical training, can now be done in China or Latin America for a fraction of the cost. This depresses wages for these kinds of low-skilled jobs in the U.S. as America tries to compete with the global workforce.
In order to compete successfully, America must become more strategic in its approach to workforce development. Our workforce development system must become more "demand-driven," which means a more effective matching of skills training with the needs of employers. If our country does not become more proactive on this front, it is only a matter of time before employers begin to figure out how to outsource those high skill, high wage jobs that are currently going unfilled.
Julian L. Alssid is the founder and executive director of Workforce Strategy Center, a nonprofit organization that advises leaders who seek to make education and workforce development more responsive to the economy.