Talent Shortages and Inflation

Talent Shortages and Inflation

Guest writer Ed Gordon gives readers an overview of American companies that offer training and professional development to their employees in this week’s blog post on “Talent Shortages and Inflation.”

About 20 to 25 percent of U.S. businesses provide training to their employees. This management commitment cuts across all types of businesses of all sizes. Here are some notable examples: 

Large
Airbus, Amazon, American Airlines, Boeing, CVS, KitchenAid, Lowe’s, Marriott, United Airlines
 

Medium
Abt(IL), Bell & Howell, Birmingham Water Works Board (AL), CCA, Global Partners, Cracker Barrel, Intermedia, Seattle Genetics (WA)
 

Small
LaSalle Network (IL), O’Shea Builders (IL), Pierce Manufacturing (WI), Pulse Technology (IL), Staub Manufacturing Solutions (OH)


Among the talent measures used by these companies is investing in entry-level job training often through partnering with local technical or community colleges. They also offer continuous employee development to increase productivity and profit, attract and retain talent, and raise employee commitment and satisfaction. In the short term, training creates a pipeline to fill vacant jobs. In the long term it helps to nurture talent for the innovation and leadership needed for success in the future.

 The Perils of Short-Termism

At the start of the 1990s about 40 percent of businesses offered employee training. This began to slip during the mid-1990s when many companies cut training as the trend in management strategy became maximizing short-term profit by cutting costs in areas deemed non-essential to the core function of a business. The idea was to cut your way to greatness. Wall Street rewarded those businesses that kept profits up quarter after quarter.

 A big reality check began in 2019. The cumulative effect of global crises (i.e., COVID-19, the Ukraine War, rising inflation, demographic change) has intensified the need to rebuild U.S. talent resilience. Yet this is fundamental socio-economic issue that is largely being ignored. Despite the changed skill demands of the Fourth Industrial Revolution, many still cling to the 20th-century perspective that only one-third of the labor force needs a better education and specialized career training. Technology has advanced; social perspectives remain largely unchanged.

 At the same time. the U.S. labor force is undergoing a profound generational change. The 76.4 million baby boomers born between 1946 and 1964 have caused big problems coming in and going out. They overwhelmed educational facilities and then flooded the job market causing over one percent annual growth in the labor force. Now they are retiring at an unprecedented rate. Between 2010 and 2020 over 28 million boomers retired; the remaining cohort will leave the workforce by 2030. Currently about one in four U.S. workers are boomers. This massive wave of retirements is generating a huge demand for workers to replace them.  Rising skills requirements are making this process more difficult.

 Today the official U.S. unemployment rate is very low, but the labor participation rate is more than one percent less than at the start of the pandemic. In my over 30 years as a workforce consultant, I have never seen so much skilled talent sitting on the sidelines. Perhaps as many as 20 million workers have the skills-base needed by many businesses and organizations. Yet these employers are not investing in training to give these workers the skills they may lack to obtain a precise fit for open positions.

 Central banks around the world are raising interest rates to control inflation. Demographics and acute skill shortages are among the factors stoking inflation as employers struggling to fill positions raise wage offers. Companies are likely to pass rising labor bills along to consumers in the form of higher prices. In the long-term, term how much will this continue to fuel inflation?  The United States is imperiling its future by ignoring education deficits in schools and training needs in workplaces. Short-term fixes including raising interest rates will not solve our nation’s long-term need to better prepare our citizens for the education and skill demands of advanced technologies.

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Why Job Vacancies Are Surging & Likely to Continue

Why Job Vacancies Are Surging & Likely to Continue

Guest writer Ed Gordon continues to explore the aftermath of the great disruption with this week’s blog post “Why Job Vacancies Are Surging & Likely to Continue.”

As the labor market starts recovering from the severe disruptions caused by the COVID-19 pandemic, there are some reasons for hope and many reasons for concern. The labor participation rate which continues to remain 1.1 percent lower than before the pandemic’s start, may rise somewhat as normal schooling enables more women to return to the workforce and the fear of contracting COVID subsides. On the other hand, reports are showing that students at all levels have lost a year or more of learning and community college enrollments have declined at a time when job skill requirements are growing.  

The biggest and most persistent negative factor is the shrinkage of the U.S. working age population in this decade. The baby boomers who caused a huge surge in the working age population are retiring in droves and this will continue until 2030. As the U.S. birthrate declined precipitously starting in the 1970s, a much smaller cohort is now entering the workforce. Also, since 2017 fewer immigrants have been admitted to the United States.  

Current Job Vacancies Soar 

The rebound from the pandemic and the shrinking labor pool has caused the unemployment rate to plummet and job vacancies to soar. An estimated 10.7 to 12.5 million jobs are now unfilled. The Bureau of Labor Statistics June JOLTS Report showed high rates of job vacancies in many major businesses sectors: information 7.9 percent, health care 9.1 percent, education 8.4 percent, professional/business services 8.3 percent.  

The National Federation of Independent Business reported an all-time high of small businesses that cannot find qualified applicants for skilled positions. A January 2022 Fortune/Deloitte survey reported that 71 percent of CEOs expected that labor and skills shortages will significantly disrupt their business strategies over the course of this year.  

U.S. defense contractors have major staffing shortages. Their aging pool of high-skill specialized employees – particularly engineers with security clearances – is rapidly shrinking as they reach retirement age. These are also tough times for military recruiters. As of late June, only 40 percent of the 57,000 new recruits that the U.S. Army wants by September 30 had been enlisted. The Navy, Marine Corps, and even the Air Force are also having trouble finding personnel that meet their fitness and educational requirements.  

To retain workers and recruit new ones, many employers are raising salaries or offering special hiring bonuses. So far in 2022 the average increase in base pay in the United States is 4.8 percent. As there currently is a shortage of one million registered nurses in the United States, hospitals are offering an up to $40,000 signing bonus to nurses who sign a two-year contract. Walgreens Boots Alliance is offering signing bonuses of up to $75,000 to pharmacists who agree to stay in their jobs for a specified period.  

The Society for Human Resource Management reports that projections for 2023 indicate that salaries will increase from 4 to 5 percent driven by continuing shortages of skilled workers.  

Can We Enlarge the Labor Pool? 

As we cited earlier, the labor participation rate remains below pre-pandemic levels. As of June 2022, there were about 100 million American of working age that are currently not employed or looking for work. We estimate that about 21 million are deterred from seeking employment because they lack the skill requirements for vacant jobs but could gain them if provided with entry-level training. Many of the 5.6 million Americans currently listed as unemployed also are in the same position. Yet only 20 to 25 percent of American businesses have training and education programs. This includes both entry-level job training and upgrading the skills or knowledge of current employees. For every dollar our chief foreign competition invests in worker training, U.S. business contributes just 20 cents!  

Can Robotics and Artificial Intelligence Fill the Gap? 

Many industry analysts are saying robots will largely solve current worker shortages. Businesses are investing billions in robotics and AI. A Material Handling Institute survey found that their members plan to increase robotics in warehouses by 50 percent over the next five years. However, as nations such as Singapore that have successfully automated industrial facilities illustrate, this approach relies heavily on having a high-skill labor pool and providing retraining to workers whose jobs now require programing, monitoring, or repairing automated equipment.  

While AI software can now generate text and field telephone inquiries, it can’t go beyond the set of data with which it is programmed. It can’t solve cause-and-effect problems or learn about the world like a child. Advancements in AI and robotics will require HI (human intelligence), i.e., more knowledge workers. 

How to Expand the Knowledge Pool

Raising salaries will not generate more qualified employees, it will only increase job churn and fuel inflation. The Fourth Industrial Revolution requires a higher proportion of workers to be high-skilled, and their skills and knowledge need to be continually updated to keep pace with rapid technological change. Surveys indicate that most American workers want to work for employers that provide workers with opportunities to upgrade their capabilities. 

Cooperative options for providing training and education need far more support. Small businesses particularly can profit from participating in regional associations in which businesses, educational institutions, and training providers work together in developing programs that develop and retrain workers with in-demand job and career skills. 

Edward Gordon is available to provide customized presentations on talent and the current and future U.S. and global labor market. Please visit our website www.imperialcorp.com for more information or contact us by email at imperialcorp@juno.com or by calling 312.664.5196.

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The May Gordon Report: Hope, Jobs, Change

The May Gordon Report: Hope, Jobs, Change

Guest writer Edward E. Gordon has returned with his report for the month of May: Hope, Jobs, Change.

What are the major roadblocks to changing the ways the United States develops its workforce? We recently sought some answers from other workforce development leaders who also seek major improvements in our education-to-employment systems. There is general agreement that there are new education and training programs that improve adult and student learning, but there are significant obstacles to effectively and comprehensively implementing them.

 Over the past 30 years regional public-private partnership hubs have been formed that integrate the wide variety of community resources needed to address skills-jobs disconnects and today’s vacant jobs crisis. But these pathways to a better educated workforce have only been supported by a comparative handful of enlightened community and business leaders. Why haven’t they been widely adopted throughout the United States?

 Storrs Hall in his book, Where Is My Flying Car, gives several cogent explanations of why people in general are very resistant to systemic change. When their money, power, or prestige are at risk, systemic change issues are often turned into personal turf wars. Hall calls this the “Machiavelli Effect.” As Machiavelli stated in his controversial 1532 treatise, The Prince, innovators are often opposed by “all those who have done well under the old conditions.”

 Hall asserts that bureaucracies today pose major obstacles to implementing systemic change. There are well-entrenched bureaucracies in business, education, unions, and government. He finds that bureaucrats often block changes because of a “failure of imagination.” They believe in their superior expertise. They automatically rule out the potential of untried but worthwhile solutions.

 Hall also contends that bureaucracies stifle change due to a “failure of nerve.” Solutions to current challenges gain significant support. Only the details of implementing them need to be worked out. But nothing ever happens! Bureaucrats succumb to the fear that the results of his process will be so good that their leadership will be threatened.

 Bureaucracies are powerful because they are able to use resource starvation and regulations to suppress systemic change. Furthermore, America today is split into warring factions that resist working together to combat threats to our prosperity and way of life. In its history the United States has faced formidable challenges and forged innovative solutions that moved the nation forward. What can we learn from the past?

 After travelling across the United States in 1831, Alexis de Tocqueville wrote Democracy in America in which he concluded that civic activism was America’s greatest strength. As the United States expanded in territory and population during the 19th and early 20th centuries, ordinary citizens banded together to form local governments and organizations to solve common problems and meet local needs. 

 Tax-supported public education is among the most prominent advancements resulting from civic activism. By 1918 spurred by the Progressive movement, all the then states in the United States had enacted this reform. The United States became the first nation in history to attempt to offer a basic education to everyone. The system was far from perfect, but for most of the 20th century it worked well for most citizens. But the technological demands of the Fourth Industrial Revolution have made this education-to-employment system obsolete.

 Why do we need a revival of civic activism today? There are at least 1.8 job openings for every unemployed worker. U.S. inflation has reached a 40 year high of 8.5 percent. Companies across all business sectors cannot find workers with the requisite skills to fill up to 13 million vacant jobs, thus threatening significant wage inflation. Unless significant efforts are begun to bridge the talent gap between current educational preparation and the rising skill needs of local/regional businesses, we believe that by 2030 the U.S. labor market will be in an even deeper crisis, perhaps triggering a popular backlash that could destabilize our nation.

 We contend that America’s participatory democracy offers viable solutions to this grave employment crisis. During the Progressive Era a broad spectrum of voluntary organizations were formed. Many of them focused on civic improvement, such as Chambers of Commerce and Rotary Clubs. Today they and other groups and agencies such as Workforce Development Boards, regional economic development organizations, sectoral business alliances, community colleges, K-12 educational agencies, parent organizations, and unions are serving as catalysts for initiating broader public-private partnerships to update regional education-to-employment systems. Your advocacy and support for such efforts in your communities are vitally important for their success.

 For a more comprehensive analysis of the causes and solutions for the current skills-jobs mismatch, see Job Shock: Moving Beyond the COVID-19 Employment Meltdown to a New Skilled Talent Decade

 

Edward E. Gordon is the president and founder of Imperial Consulting Corporation.

 We invite to submit your questions or comments by email or calling us in Chicago at 312.664.5196.

Thank you for your continued interest in our publication.

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The New Plague: Vacant Jobs

The New Plague: Vacant Jobs

In tonight’s blog post, guest writer Edward Gordon shares the new plague taking hold in our economy: vacant jobs.

“Hiring Now” signs are sprouting across the United States. Businesses can’t fill the tidal wave of empty positions. Many are not new jobs but replacements for the unprecedented number of 79 million baby boomers retiring by 2030. The largest number reach age 65 in 2022. This will be a terrible year for recruiters.

As COVID-19 restrictions have eased, job openings have soared. Since October 2021, the number of vacant jobs reported in the U.S. Bureau of Labor Statistic’s monthly JOLTS report has remained at about 11 million. The latest report shows that jobs openings are high in many key industry sectors including:

  1. Construction                                                   380,000
  2. Manufacturing                                                855,000
  3. Transportation, Warehousing & Utilities        479,000
  4. Professional & Business Services                   2,065,000
  5. Education & Health Services                          2,129,000
  6. Retail Trade                                                     1,046,000
  7. Accommodation & Food Services                  1,497,000
  8. State & Local Government                             567, 000

However, many businesses for proprietary reasons or because of repeated failure to find qualified candidates, do not report their job openings. As a result, we estimate the current number of vacant jobs at between 12 to 13 million vacant positions.

People are reentering the workforce, but many lack essential educational qualifications or specific job skills.  Too many Americans graduate from high school or even college without “learning how to learn” or failing to attain the math or literacy levels needed for employment in today’s in-demand career areas. Meanwhile technological advances across all industry sectors demand continuous education and training updates.

After assessing the current job situation, a Wall Street Journal analyst predicts, “If employment keeps growing like it has, by this summer the jobs market will either be extraordinarily tight, or excruciatingly so.” (March 5-6, 2022)

There is some evidence that American businesses have finally begun to increase their investments in worker training and education. But to produce more educated and skilled workers, systemic change is needed. If regional efforts do not grow appreciatively over the remaining decade, job vacancies will rise substantially. Our current analysis predicts that by 2030 there will be over 95 million empty positions globally with up to 30 million U.S. vacant jobs. The resulting economic and social upheaval will have dire consequences overseas and across America.

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Building a New Skilled Talent Decade

Building a New Skilled Talent Decade

Edward E. Gordon, the founder and president of Imperial Consulting Corporation in Chicago, has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. This week, he shares with us the history and the present needs involved in building a new skilled talent decade.

Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Recently I spoke at a forum on my White Paper, “Job Shock: Moving Beyond the COVID-19 Employment Meltdown to a New Skilled Talent Decade,” at the Cliff Dwellers Club in Chicago. My presentation and responses to it can be viewed on YouTube at https://youtu.be/gnLBrOiMSYA. In my remarks, I pointed out that history was now repeating itself as workplace technology change is again shifting education and skills requirements.

PAST LABOR HISTORY

During the first decades of the 20th century, a titanic shift in the U.S. economy destabilized society. An industrial revolution triggered by spread of electricity and the growth of factories and offices required workers with at least a basic education in reading and mathematics. Many violently opposed the expansion of public education. Who needs a universal school system? Why educate children, women, and immigrants? You will only cause anarchy by giving them dangerous ideas! Anyway, these people are not trainable. We need them for cheap labor in our factories or on our farms!

As this debate raged across America, more people were persuaded that the expansion of education would benefit society. Starting at the regional and state levels, enlightened community leaders spearheaded the expansion of compulsory tax-supported primary and secondary education. By 1918, all of the then 48 states mandated this standard of public schooling backed by tough truancy laws. The United States was the first nation to attempt to provide a general education to all its citizens. It was a major contributor to the rise of the United States as a world power.

A NEW SKILLED JOB ERA

Another major industrial revolution began in the 1970s as computers and information technology began to be adopted in workplaces. By the beginning of the 21st century, personal computers, smartphones and the internet were everywhere. Automaton has eliminated many low-skill jobs and increased the demand for workers with higher math and reading skills and specialized career training. The seminal 1983 report, “A Nation at Risk,” raised the first red flag that the U.S. education-to-employment system had become obsolete and warned that America needed to provide more students and workers with enhanced education and training for higher-skilled/higher-wage jobs.

However, continuing national testing by the U.S. Department of Education commonly known as the Nation’s Report Card reports low levels of proficiency in math and reading particularly at the 12th-grade-level. Moreover, the COVID-19 pandemic has caused learning loses of up to a year particularly among lower-income students.

These deficiencies in our education-to employment system plus the 130 million American adults who the Barbara Bush foundation reported read at the 8th-grade level or less is building into a severe shortage of skilled labor. Surveys of employers are consistently reporting difficulties in finding qualified people to fill open positions. A September National Federation of Independent Business survey found that 51 percent of owners had job openings they could not fill, the third consecutive month in which record highs for unfilled jobs had been reached. Moreover, 62 percent of small employers seeking to hire had few or no qualified applicants. In July and August, the U.S. Bureau of Labor Statistics reported over 10 million job openings. The Federal Reserve Bank of Atlanta projected that the high number of unfilled jobs is costing U.S. businesses to lose $738 billion in revenue annually.

CAN WE DO IT AGAIN?

As the COVID-19 epidemic has severely disrupted schooling at all levels and caused labor market turmoil, there is the potential for forming broad coalitions to reform our nation’s education-to-employment pipeline. Parents and students are more aware of the importance of good educational preparation for the future, and many businesses are fighting for their very survival.

At present although the number of vacant jobs is high, there are millions of Americans who are unemployed or underemployed who do not precisely match the skills or experience companies are seeking for their open jobs and who therefore are excluded for consideration for them. A September Harvard/Accenture report estimates that there are over 27 million Americans whom they term “hidden workers.”

Our “Job Shock” research clearly shows that Regional Talent Innovation Networks (RETAINs) as public-private partnership hubs can effectively prepare more people for the higher-skilled/higher-wage jobs that are vacant across the United States. Their success hinges upon mobilizing a diversity of partners to engage in meaningful collaboration to close skills-jobs gaps. Cross sector coordination is key. The current barriers between businesses and educational institutions need to be broken down to allow the development of up-to-date career preparation options.

America has a long history of community civic engagement. Enlightened local leaders have periodically stepped forward to bolster our republic during times of crisis. Community engagement is again essential to move the United States forward into a new skilled talent decade.

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Job Shock: Part Six – The First Half

Job Shock: Part Six – The First Half

Job Shock: Part Six – The First Half

Edward E. Gordon, the founder and president of Imperial Consulting Corporation in Chicago, has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. This week, he continues his blog series with Job Shock, Part Six – The First Half.

Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Solving the Pandemic & 2030 Employment Meltdown

RETAIN Case Studies: Partnerships Rebuilding Local Employment Pipelines

The June Gordon Report provided an introduction to the general characteristics of regional public-private partnerships focusing on economic and workforce development or RETAINs. Across the United States RETAINs have many local brand names.  RETAINs bring together enlightened community leaders from many industry sectors. They cooperate in developing initiatives that provide career education and information to students and retrain incumbent workers to meet the skill demands of workplace technology changes. The goals of RETAINs are to strengthen local institutions and competitive companies while providing local residents with better job opportunities.

There are many paths to pursuing these objectives. Here are examples of RETAINs that are continuing to develop programs that address the talent challenges in their communities.

Manufacturing Renaissance, Chicago, Illinois
For the past 38 years Manufacturing Renaissance (MR) has been recognized as a leading expert, advocate and practitioner of policies and programs that support the manufacturing sector as a primary strategy for reducing poverty, expanding inclusion, and sustaining middle-class communities. MR has currently developed programs in three areas: Career Pathway Services, Policy and Advocacy, and Economic Development. Here is a snapshot of MR’s Career Pathway Services:

Manufacturing Connect. MC is a program designed to expose, inspire, prepare, and support youth and young adults to pursue career pathways in manufacturing.  MC is a community-based program serving in-school youth, ages 14-18, to provide high quality, career pathway programming including career exposure, technical training and work experiences to help young people start and keep good paying jobs in manufacturing.

Young Manufacturers Association. The YMA serves as both a network and a program for young adults, aged 18-29, who are pursuing careers in manufacturing, in-between jobs, in training or interested in starting a career in manufacturing. Through regular meetings and social events, they support one another as peers through training, transition into permanent employment, professional and life skills development, and balancing personal and work life dynamics. The YMA as a program provides services on an as-needed basis, including career coaching, wrap-around supports, employer liaison to help troubleshoot issues that come up at work, and technical training. Together, the YMA network and program are serving the untapped talent and potential that young adults specifically represent to their communities and their current or future employers.

Instructors Apprenticeship for Advanced Manufacturing. IAAM was developed in partnership with the Chicago Teachers Union Foundation and the National Institute for Metalworking Skills to train the next generation of great machining instructors to be technologically, culturally, and pedagogically competent in the machine shop classroom.

Career Pathway Services is not a traditional workforce development program. MR draws heavily from a youth development and social services orientation to engage youth and young adults who typically may not identify or seek out manufacturing as a pathway that can assist them in achieving their life goals. MR introduces young people to the sector, finds a variety of ways for them to relate to peers already in the sector to help illuminate what could be possible for their future. No matter what they ultimately choose, young people benefit from having a network of professional and social support, work experiences, technical and professionalism skills. For those who enroll in our training program and choose to pursue a career-track job in manufacturing we support them as much as possible through training, job placement and beyond to help ensure their success.

MR is expanding its reach in Cook County and showing the way for other RETAINs to begin similar efforts. It illustrates that for a RETAIN to be successful there must be strong cooperation among educational entities, the business community, unions. government agencies, and non-profit partners.

High School Inc., Santa Ana, California

The initial impetus for the creation of the High School Inc. Academies Foundation came from local business leaders in the Santa Ana Chamber of Commerce. Starting in 2003, members of the Chamber of Commerce held discussions with school districts officials on how to raise student achievement. The result was a partnership involving the Chamber, the Foundation and the Santa Ana Unified School District. An official “Memorandum of Understanding was signed by all three partners in May of 2006. This agreement outlined the responsibilities of each partner for the development and operation of the High School Inc. program.

The first six High School Inc. Academies began in 2007 on the campus of Santa Ana Valley High School in the Santa Ana Unified School District. The district’s Career Technical Education (CTE) department conducts monthly meetings with High School Inc.’s staff to maintain the continuity and effectiveness of the academies.

At Valley High School the High School Inc. Academies merge both academic and technical skills through Project Based Learning (PBL), competitions, mentorships, and business internships. Because of the success of the High School Inc. academies, there has been considerable growth in the school district’s creation of career pathways in business and industry sectors. These pathways start as early as sixth grade in the school district’s intermediate schools and send students into the waiting High School Inc. Academies.

The number of Valley high school students categorized as “socioeconomically disadvantaged” in 2008 was 80 percent. However, with the help of talented teachers and staff members, and the existence of High School Inc., Valley High School has raised the level of achievement for all Valley high school students.

Mary Tran, Executive Director of High School Inc. reports that the six High School Inc. Academies have grown from an enrollment of 96 students at its start in 2007 to over 1,572 students in 2019. The Academies boast a 98% high school graduation rate. In the past year there have been 160 professional internships for seniors. The number of students receiving “Industry Certifications” after a minimum of two years in the program was 511, with over 319 students participating in business/industry themed competitions. Students in the 2018-2019 received over 950 hours of volunteer time from business and industry representatives. The program has received numerous awards and recognitions including the prestigious “Golden Bell Award” given to High School Inc. in 2014 by the California School Board Association.

Jack E. Oakes, an officer on the Board of Directors for High School Inc., says “High School Inc.’s development has produced the realization that, before students can be College and Career Ready, they must be ‘Achievement Ready.’ Students reach this new level of preparedness by being motivated to strive at or beyond their potential. The High School Inc. model ensures that students are Achievement Ready before they graduate and pursue higher education and careers. The reforms at Valley High School embrace the mission of High School Inc. ‘to empower youth and strengthen communities through education and business partnerships.’”

Summing Up
Each organization profiled here has continued to evolve to meet the challenges posed by technological, economic, and workforce shifts. The COVID-19 pandemic has disrupted American life at many levels. It opens up new opportunities for many communities to use the RETAIN model as their first step toward a more knowledgeable workforce and the better paying jobs of the Fourth Industrial Revolution.

The last segment of “Job Shock” will focus on why the 2020s will be a crucial decade for building a skilled workforce. As the nation emerges from COVID-19 shutdowns, the disconnect between needed skills and available jobs is gaining increasing attention. The time has arrived for RETAINs to take the lead in rebuilding education-to-employment pipelines in communities across the United States.

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Job Shock, Part Five and a Talent RX

Job Shock, Part Five: Solving the Pandemic & 2030 Employment Meltdown with a Talent RX: RETAIN Partnerships

Edward E. Gordon, the founder and president of Imperial Consulting Corporation in Chicago, has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. This week, he continues his blog series with Job Shock, Part Five and a Talent RX.

Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

The COVID-10 pandemic has triggered widespread doubts about the future. The U.S. job market is in chaos. At the end of April 2021, the U.S. Bureau of Labor Statistics reported an unprecedented 9.3 million job openings across many business sectors. Might this finally be the right time to start anew and find fresh solutions to the skills-jobs shock now underway?

Today’s unprecedented economic upheaval presents an unprecedented opportunity. There are millions of unemployed on the one hand, and rapidly evolving job-skill needs on the other – providing a way for the former to solve the latter’s problem. Communities across the United States have a diversity of underdeveloped talent. They badly need local pathways that promote equity by offering high-quality educational opportunities that are accessible to everyone. This means providing more students and workers with enhanced talent development programs aligned with personal aptitudes and interests and the needs of local businesses and organizations.

The current U.S. labor market is in desperate need of more people who have developed their cognitive, interpersonal, and leadership skills. People who can problem-solve. These people aren’t going to drop from the skies. You can’t click for brains. How can we successfully prepare more people for the skilled jobs of today and tomorrow?

RETAINs

Across the United States at least 1,000 non-profit groups have organized to reinvent local talent-delivery systems. These public-private partnerships bring together a broad cross-section of community groups, such as parent organizations; chambers-of-commerce; elementary, secondary, and higher educational institutions; workforce boards, regional economic development commissions; local government units; unions; service clubs; foundations and other non-profit social welfare agencies. (See Figure 1.)

To provide a descriptive term for such organizations, we coined the term Regional Talent Innovation Network (RETAIN). They have many local brand names, such as The New North, High School Inc., the Vermillion Advantage, ConxusNEO, and Manufacturing Renaissance.

RETAINs began in the 1990s to respond to the economic erosion of their communities. Instead of seeing their young people move elsewhere for employment, they sought to retain them in their communities. Keeping the population stable also enabled communities to retain local businesses and thus stop the erosion of the tax base. Once these communities built a skilled workforce, they could attract new businesses to locate there.

In the short term, RETAINs build a network in which local businesses collaborate with training organizations, educational institutions, and in-house training departments to provide training for vacant jobs and to upskill current employees. This both enables employees to move into higher-skill/higher-paying jobs and enhances the profitability of local businesses through the more efficient use of new technologies. Access to pooled resources make these training collaboratives particularly beneficial to smaller businesses that cannot afford to provide their own in-house training.

In the long-term RETAINs update educational programs at all levels starting in elementary schools and extending to a wide variety of post-secondary options including certificate and apprenticeships programs. They work to harmonize existing educational programs and devise new ways to fill in skill gaps. RETAINs help reconcile funding streams and secure new revenue to integrate K-12, career education, higher education, and adult training. (See Figure 2.)

We agree with a Wall Street Journal editorial (June 9, 2021) that failing public K-12 schools are the “root cause of America’s skilled-worker shortage.” K-12 schools are locally controlled. The purpose of a RETAIN is to foster communication and cooperation among diverse community sectors. Many students today lack motivation as they find schooling too abstract and unrelated to the “real world.” K-12 students and teachers need active connections to local employers in order to learn about the education and skills required for careers in today’s workplaces. Local businesses need to interact with public and private high school students through sponsoring career education programs, internships, and other activities that allow students to explore career areas that align with their aptitudes and interests.

RETAINs see themselves as joint partners in community building and in the renewal of the U.S. free enterprise system. They are rebuilding the pipeline that connect their community members to the job market. The keywords here are “bottom-up collaboration” – defined as a joint authority, joint responsibility, and joint accountability among all the partners.

RETAINs Can Make a Difference

The good news is what we can expect if RETAINs are instituted across America to rebuild the U.S. workforce. (See Figure 3.) In 2030 the U.S. economy will support about 170 million jobs; 128 million of them will be high-skill or mid-skill jobs. RETAINs can increase the expected 56 million high/mid-skill workers by retraining 30 million additional workers and preparing 10 million more students for skilled employment.

Combining these job-ready workers with additional automation will reduce the number of vacant jobs across the economy. There still will be a substantial, but not an overwhelming number of surplus workers. However as more communities use the RETAIN model to sustain job-ready workforces, the number will fall. The American middle class will grow again as high-wage employment rises.

Moving Forward

The COVID-19 pandemic has heightened Job Shock in the United States and around the globe. It has disrupted schooling leaving the economically disadvantaged even further behind. Millions of workers have either changed jobs or faced unemployment. Education and training solutions are more vital than ever before. RETAINs can be an important force in preparing students and workers for positions in America’s fast-paced, technologically driven, knowledge economy. Regional development can better support broad economic expansion and ensure that the United States remains a highly competitive global economy.

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Job Shock, Part Three

Job Shock, Part Three

Edward E. Gordon, the founder and president of Imperial Consulting Corporation in Chicago, has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. This week, he continues his blog series with Job Shock, Part Three.

Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Job Shock Part Three: Solving the Pandemic & 2030 Employment Meltdown

Part III: The Kids & Workers Are Not “All Right”

Many students and workers cannot accept the new reality that they are undereducated for many jobs in this decade’s labor market, let alone future ones!

KNAPP has created a robot for warehouses with the dexterity to recognize and sort random items with 99 percent accuracy. Once such robots are put into operation, humans would continue to work alongside them, but the catch is that these workers will need a whole set of additional skills.

“If this happens 50 years from now,” stated Pieter Abbeel, an artificial intelligence professor at University of California, Berkeley, “there is plenty of time for the educational system to catch up to the job market.” The trouble with his prediction is that the COVID-19 pandemic has sped up companies’ plans to further automate workplaces today!

Throughout the course of the COVID-19 pandemic, small business owners have consistently reported that the quality of labor was an important business problem. In a February 2021 National Federation of Independent Business survey 56 percent of the respondents were trying to hire and 91 percent of these employers reported few or no qualified applicants for their job openings.

This situation is the result of outdated regional education-to-employment systems across the United States. They have largely become broken pipelines with an inadequate flow of people qualified to fill local jobs. Unfortunately, this skills-jobs gap has persisted throughout the last two decades.  As labor economist, Kevin Hollenbeck wrote in 2013, “I am reminded of the adage about the frog in the pot. If you put a frog into a pot of boiling water, it will jump out. But if you put a frog in a pot of water and then slowly boil it, the consequences will be dire for the frog. . .. We (workers, employers, policymakers, and politicians) like that frog, have not been alarmed enough by the signals of a widening skills-jobs gap . . . to jump to action, and now we face the dire consequences in the form of a “talent cliff.”

The COVID-19 pandemic has made this talent cliff steeper.  The switch to remote schooling has meant that many students may be behind as much as a full grade level. Jobs go unfilled due to the lack of qualified applicants while more workers remain unemployed for six months or more and the labor-force participation decreases. Clearly the kids and workers are not “all right.” Denial or wishful thinking will not change this job shock reality.

Knowledge Shock

The 2017 film “Hidden Figures” focuses on the lives of three African-American women who NASA hired because of their advanced math attainments. Through making important contributions to NASA’s space mission, these women overcame race and gender discrimination, earned the respect of their co-workers, and secured career advancement. These three women are unsung heroes of the U.S. space race against the Soviet Union.

What was a major reason for their success?  With the long-term help of their parents, each of the women overcame formidable barriers to obtaining the educational preparation that developed their mathematical talents. Education is a shared responsibility between parents and schools. Education should begin at home. Habits of learning should be instilled there. Parents can help a child learn-how-to-learn by fostering each child’s personal talents and interests.

Unfortunately, America’s popular culture does not esteem educators or link educational attainment to success in life. Parents are the primary motivators of their children.  If parents do not believe that doing well in school is very important, neither will their children.

Many parents also believe that their local school is providing a good education to their children. Regretfully this is often not the case. Education levels have not kept pace with skill demands in workplaces.

There is ample evidence that K-12 education in the United States is not providing many students with the educational foundations needed for their future development. Every two years nationwide achievement tests are given to students in grades 4, 8, and 12. The National Assessment of Educational Progress (NAEP) commonly called the “Nation’s Report Card” is conducted by the U.S. Department of Education. Recent results have been nothing short of alarming.

Students are ranked at four levels: below basic, basic, proficient (at grade level), and advanced (above grade level). The Grade 4 test results in 2019 were: 65 percent read below grade level, 26 percent were at grade level, and 9 percent were above grade level. Fourth grade is a crucial point for reading attainment because in the first three grades’ students are taught how to read, but by the fourth grade, they should have attained a level of reading proficiency that enables them to learn how to learn.

At grade 12 in 2019, 37 percent received NAEP reading scores of proficient or above. However, 30 percent were at the below basic level which was larger than in any previous assessment year. In math, only 24 percent of high school seniors were at the proficient or above levels.

Yet paradoxically the U.S. high school graduation rate has been rising. How can this be explained? Grade-level standards are being downgraded or bypassed. For instance, failing students are enrolled in special “credit recovery programs” that allow them to move on to the next grade or graduate with no or minimal academic standards for a passing grade. Clearly all high school degrees are not equal!

The NAEP scores indicate that a large proportion of U.S. students are not equipped with the basic educational foundation needed for success in post-secondary programs. About 67 percent of high school graduates attend higher educational institutions. After six years only about one-third complete a degree, certificate or apprenticeship.

Many of these students take either the SAT or ACT exams that are designed to access their readiness for higher learning. Between 1967 and 2017 overall test scores on these exams have declined. In 2019 only 37 percent of ACT takers and 45 percent of SAT takers tested fully ready for post-secondary programs.

Higher-educational institutions are compelled to offer remedial education for entering students. About 40 percent of entering freshmen are now enrolled in non-college credit reading, math, or written communication classes. At some institutions over 90 percent of entering students need remedial education. Poor student preparation is also leading to declining quality in higher education.

America does have excellent schools and universities. On the 2020 Social Progress Index the United States ranked first in the world in the quality of its universities. But on this same index, the United States ranked 91st in student access to a quality elementary/secondary education. Over the past decade the decline of the U.S. rank on this indicator has been greater than that any other nation. Unless widespread systemic reform of U.S. K-12 education becomes a national priority, a significant proportion of the next generation of American workers will be under-skilled for employment in the workplaces of the future.

COVID-19 Learning Consequences

Since March 2020 almost all K-12 students have been receiving at least some instruction remotely rather than in the classroom. When the pandemic subsides, what kind of learning losses can we expect?

  •  Millions of low-income and rural students lacked reliable internet access and about 3 million mainly low-income students were not enrolled in school. Many will likely fall behind a full grade level or more.
  • The longer the pandemic persists, the greater the harm to students being taught fully or partly online.
  • Online learning is less effective for younger students as their attention spans are limited, and it also negatively impacts their social skill development.
  • Two major testing services reported that the math scores of elementary students dropped 5 to 10 percentile points in fall 2020. Both noted that their 2020 testing pool was significantly smaller as dropouts or students lacking access to digital technology were absent.
  • High school dropout rates most likely will increase

COVID-19 has also led to a severe decline in enrollments at America’s community colleges. Student enrollment was down 10 percent in the fall of 2020 compared to that of 2019. Because community colleges are an important component of apprenticeship, certificate, and other job preparation programs, this is a significant blow to the development of a more skilled workforce. Moreover, community colleges are the most accessible post-secondary option for low-income Americans whose K-12 education has suffered most due to a lack of internet access.

The Best Time for Education Reform Is Now!

In the wake of the COVID-19 pandemic, as the Brookings Report “Beyond Reopening Schools” cogently states “it is hard to imagine there will be another moment in history when the central role of education in the economic, social, and political prosperity and stability of nations is so obvious and well understood by the general population.”  Now clearly is the time for local, state, and federal action to revitalize K-12 education in the United States.

It is time to go beyond piecemeal reforms and playing “blame games” if we are to close the widening gap in the quality of U.S. education. There are some fundamental components of quality education that can be learned from the study of the world’s most successful educational systems.

  1. Great teachers: The key to boosting student results is improving instruction. Teachers need to thoroughly know their subjects and then receive extensive training and coaching in instructional methodology before and after they begin teaching. More top college students need to become teachers. To attract and retain these recruits, we need to front-load their compensation so that entry-level salaries are competitive with those of alternate professions. To keep their skills up-to-date, teachers need quality professional development programs throughout their careers.
  2. Effective Principals: School principals need to be educated and trained as both efficient administrators and drivers of instructional improvement. They have a key leadership role in fostering a culture of high expectations in educational attainment for teachers, students, and parents.
  3. Updated curriculums: All states need to mandate strengthened 21st-century curriculums to give more students the educational foundations necessary for high-skill/high-paying employment. To accommodate the diverse interests and talents of students, more options should be available at the high-school level including career education programs and advanced placement courses.
  4. The Key Role of Parents: The switch to remote schooling during the COVID-19 pandemic seems to have greatly increased parent awareness of the difficulties teachers face in keeping students engaged and in helping them make progress in their day-to-day learning. This should motivate parents to take a greater interest in the quality of the schooling their children are receiving and cooperate more fully in fostering their children’s daily academic progress.

The Looming Disaster of Job Shock

As low-skill jobs shrink due to automation, underprivileged elementary, high school and community college students will bear the brunt of technological advances. They are under threat of becoming the “technopeasants” of the 21st century.

We are referring to millions of our future workers who deserve an education systemically updated to meet the knowledge and skill demands of modern workplaces. America needs them to become part of a new talent pool for the 21st-century, not the victims of job shock.

Coming Next: “Job Shock Part IV”
Businesses across America now complain about the low skills of many job applicants. Yet, they often resist job training or employee reskilling programs. “Job Shock” will next review this paradox in our business culture and what needs to change to avoid potentially dire economic consequences over the next decade.

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Job Shock, Part Two

Job Shock, Part Two

Edward E. Gordon, the founder and president of Imperial Consulting Corporation in Chicago, has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. This week, he continues his blog series with Job Shock, Part Two.

Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Job Shock, Part Two – by Ed Gordon

Part II: What Has Changed?

Job Shock: Solving the Pandemic & 2030 Employment Meltdown

Would You Use a Videotape in a Blu-ray Disc Player?

The days of semi-skilled blue-collar factory jobs are fast disappearing. These jobs once provided a 19-year-old high school graduate or drop-out with the wages and benefits needed to support a family with a middle-class standard of living. Thinking that working in low-skill manufacturing or service occupations will propel you into the middle-class today is as sensible as buying a videotape for a Blu-ray disc player.

The decline of many types of U.S. manufacturing jobs was a hot political issue in both the 2016 and 2020 Presidential elections. The economic consequences of the closing of large manufacturing plants, particularly those making automobiles and large household appliances, have been especially severe. Many of these factories were located in smaller cities in which they were the central economic engines of their communities since the 1950s. They provided large numbers of assembly-line workers with well-paying, lower-skill blue-collar jobs. The growing prominence of electric vehicles has made such auto plants obsolete. The new technologies used in these vehicles mean that robotics are a central feature of their assembly lines. Such assembly lines depend on higher-skill workers who control, maintain, and repair the automated equipment. Manufacturing, in general, is undergoing a similar transition with jobs that support automated equipment growing dramatically.

The December 2020 survey of the National Association of Manufacturers illustrates the rapid escalation of skills demanded in manufacturing. Even in the midst of the COVID-19 pandemic, respondents reported the “inability to attract and retain talent” as their top business challenge. The Manufacturing Institute has projected that 2.4 million manufacturing jobs will likely be unfilled over the next decade due to skill deficits.

The Fourth Industrial Revolution is wiping out many types of middle-skill jobs. The COVID-19 pandemic has more severely affected middle-skill and low-skill workers.  More individuals see both their financial well-being and social status threatened. This has helped to fuel the growth of populist movements that are latching on to conspiracy theories or finding other scapegoats to blame for their current jobless or low-paying job situations. They are placing the blame on the wrong targets. They should be directing their anger at inadequate or outmoded training and education systems that do not provide the skills needed for the jobs that are currently in demand.

Demographic Time Bomb

The United States and the world are facing a structural labor-market race between advancing technology, on the one hand, and demographics and education on the other. In the United States alone 79 million baby-boomers are retiring between 2010 and 2030. The U.S. Census Bureau projects that one in five Americans will be 65 or older in 2030 and by 2025 the number of retirees will be enough to populate 27 Florida’s. While the US population is projected to grow to over 355 million in 2030, an increase of about 6 percent, the working age population 18 to 64 is only projected to increase by 2 percent.

Similar demographic shifts are also occurring in other nations in Europe and Asia. Birth rates are falling significantly in Italy, Germany, China, Japan, and South Korea to name a few. In these nations as in the United States, the working age population is supporting an ever-growing number of retirees. This demographic shift increases the importance of raising worker productivity. In most nations the current pace of education reform and worker retraining will be too little, too late. For example, in China about 70 percent of the labor force remains unskilled as its huge rural population is relegated to inferior schools where most students receive no more than a junior high education. (Rozelle, Invisible China)

The central premise of this “Job Shock” White Paper is that radical improvements in educational and training programs are needed to obtain a global labor force that meets the Fourth Industrial Revolution’s technological demands. American businesses have become over-reliant on importing foreign talent. However, as the world-wide war for talent heats up, it will be virtually impossible for the United States to use this strategy to compensate for our chronic domestic talent shortages. This situation is likely to become more acute between 2020 and 2030.

Lessons from the Past

This is not the first time the United States has struggled with job shock. Beginning in the 1890s the spread of electric power led to mass production methods in factories and population shifting from farms to cities. Factory technologies required workers with basic reading and math skills. To meet these expanded educational needs, compulsory tax-supported education gradually spread across the nation.

The launch of Sputnik in 1957 triggered the Space Race between the United States and the Soviet Union. This spurred the growth of the American aeronautic and defense industries with a consequent rise of jobs and careers in STEM (science, technology, engineering and mathematics) areas. Encouraged by federal funding, many initiatives sought to improve and expand STEM education and interest more students in pursuing careers in these areas. The 1970s saw the introduction of personal computers (PCs) in homes and businesses across the United States further expanding technical employment growth.

The good news is that there is not a fixed number of jobs in the U.S. economy. These past disruptive job transitions provide evidence that personal attitudes toward jobs do change and that the American labor market is very elastic. The new job requirements of the 1970s sparked a nationwide impetus for improving reading, math, and science instruction in elementary and secondary schools. There also was tremendous growth in educational options at the college level, and U.S. businesses developed in-house training and education programs for new and incumbent workers.

Today’s Job Demands

The Space Race and computer technology revolution produced islands of educational excellence but did not lead to the general development and expansion of education programs across the United States. The current education-to-employment system lags far behind the rate of change in the skill demands of the U.S. labor economy. Two-thirds of occupations now require post-secondary education, while a high school education or less suffices for only about one-third of jobs.

The challenge we now face is that only about one-third of our high school graduates leave school with reading and math comprehension at the twelfth-grade level. These skill levels are needed for the successful completion of post-secondary certificates, apprenticeships, community college two-year degrees, or four-year degrees.

Today’s technologies are increasing the importance of the ability to work in teams that often include workers in a variety of skill and job classifications. This in turn is heightening the importance of so-called “soft skills,” such as effective communication, problem-solving, self-motivation, time management, leadership, and ethical workplace standards.

The COVID-19 crisis has abruptly changed workplaces and skill demands worldwide. It is increasing the adoption of automation, robotics, and technologies that facilitate remote-work options. In this changed environment, adaptability has become a vital skill. A key to adaptability is the cognitive ability of learning how to learn as it enables workers to quickly gain new knowledge and analyze how to implement it to meet new workforce challenges.

We are now in the throes of Job Shock. Too many Americans both young and old cannot find a good job, and many have given up even looking for one. The U.S. labor market participation rate began a downward slide after the 2010 recession and has dived by two percentage points over the past year as the COVID-19 pandemic has decimated some sectors of the U.S. economy. (U.S. Bureau of Labor Statistics, January 2021) This makes the official unemployment rate an inaccurate barometer of workforce conditions.

The United States is now facing a need to provide updated education and training to two expanding sectors of the adult population – those who are not currently employed and those who need to transition to other occupations due to the impact of the COVID pandemic. In addition, the talent development needs of the current workforce must be addressed. In next month’s Gordon Report, the “Job Shock” White Paper will examine the current education and skills profiles of different segments of the U.S. population and what consequences we can expect over the next decade if changes are not made.

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Job Shock, Part One

Job Shock, Part One

This week, we are proud to introduce a new guest blogger, Edward E. Gordon. In Job Shock, Part One, Gordon is beginning a three-week series of thoughts for your consideration. The founder and president of Imperial Consulting Corporation in Chicago, Gordon has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Job Shock Part One: Solving the Pandemic & 2030 Employment Meltdown

Introducing a New White Paper.

Part I: Introduction: Why Read This?

Welcome to the Fourth Industrial Revolution in a COVID-19 challenged world economy. Their combined impact on the U.S. job market will stretch to 2030 and beyond. Say hello to “Job Shock!”

“Job Shock: Solving the Pandemic and 2030 Employment Meltdown” will be released as monthly topical Gordon Reports. This will give readers a greater opportunity to consider their outlook on the future of employment. “Job Shock” will present our most up-to-date research on the future of the U.S. labor market over the coming decade. We will review both long-term and short-term problems and solutions to them that are now underway across the United States. “Job Shock’s” premise is that America’s students and workers are as much in need of knowledge injections as they are of vaccine injections against COVID-19.

Defining the Realities of Job Shock

Technologies that have transformed American workplaces now require higher skills. The United States is not creating more high-pay, low-skilled jobs; it is creating more high-pay, higher-skilled jobs.  Unless we confront the reality of this talent mismatch, we face a decade in which there will be too many unskilled people without jobs who run a high risk for lives in poverty and too many skilled jobs without people. This potentially threatens to undermine the broader economy and increase the social disruption that has already begun.

In today’s job market at least 50 percent of today’s “good jobs” (those with higher pay and benefits) do not require four-year college degrees. These jobs need students who graduate from high school with a good general educational foundation, i.e., strong reading/math comprehension, good written and verbal communication abilities, problem-solving and teamwork skills. Students then need to obtain a career certificate, apprenticeship, or a two-year degree from a technical or community college. We are not preparing enough students for the talent realities of the current U.S. job market.

The United States has millions of well-educated, talented workers.  But the unrelenting demands of Job Shock tell us that we will need to double their numbers over this decade to run our high-tech economy.

Job Shock from COVID-19

The ongoing COVID-19 pandemic has only exacerbated this skills gap and sped up employment meltdowns. It caused the sharpest increase in the official U.S. unemployment rate ever recorded, rising from 3.5 percent in February 2020 to a peak of 14.7 percent in April. At the close of 2020, 12 million of the 22 million jobs lost at the start of the pandemic had been regained. The December unemployment rate of 6.7 percent reflects the number of workers permanently laid off because of the pandemic. The labor force participation rate also remains low.

But the effect of COVID upon different industries and jobs has been very uneven. The leisure and hospitality sector has been particularly hard hit with its low-wage workers experiencing the greatest job loss. Payrolls for couriers and messengers have increased by over 20 percent.

While many businesses lay off workers, others are struggling to fill job vacancies. Overall U.S. businesses continue to cut job training programs, further widening the skills gap. Businesses are increasing investments in automation and technologies that facilitate remote work. The continuing Fourth Industrial Revolution will further raise demands for workers with the skills needed to invent, use, maintain, or repair advanced technologies.

The COVID-19 pandemic is illustrating that skill shortages can have lethal results.   COVID-19 vaccine manufacturers have hundreds of vacant jobs in such areas as engineering and quality control. There are acute shortages of critical-care doctors and nurses as well as lab technicians to process COVID tests.  How many of the over 400,000 dead (greater than the death toll of the U.S. armed forces in World War II) could have been saved if we had fewer shortages of medical personnel in COVID hot spots?

Also, the skilled people we take for granted to meet our daily needs are in short supply. As computer systems have become more and more central to our daily lives, breakdowns and threats to the security of our private information proliferate. Finding a qualified plumber, carpenter, electrician or medical technologist has become more difficult in many communities. If more effective talent development efforts are not initiated, there is a real danger that the world will not end in a big bang, but that it will come to a slow grinding halt due to a lack of workers with the skills needed to maintain advanced technologies. Welcome to Job Shock!

Job Shock Objectives

The goal of the “Job Shock White Paper” is to raise awareness of the broad scope of the changes needed to equip students with the education and skills needed for 21st-century jobs and careers. And we must retrain workers with the specific skills needed by employers. There are solutions already underway in communities across the United States that can help your local area. But these solutions are not easily available to all.

We see the most promising responses to Job Shock coming from regional cross-sector partnerships composed of business owners and managers, educators, parents, government officials, union leaders, non-profit associations, and others. These partnerships have begun regionalized initiatives to rebuild their outdated education-to-employment systems.

“Job Shock” is a call to action. We need to work together in initiating the systemic changes needed to prepare more people for better-paying jobs and thus create a more equitable and prosperous economy over this decade.

Part II of “Job Shock” will provide an overview of how technology has dramatically transformed workplaces and occupational requirements over the last 50 years. Unfortunately, other parts of American society have failed to adapt to these labor market changes thus contributing to the social unrest the United States is now experiencing.  We invite to submit your questions or comments by email or by calling us in Chicago at 312.664.5196.

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