Job Shock, Part Five and a Talent RX

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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

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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

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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

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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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A Guest Blog from Ed Gordon

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“Ignoring America’s Talent Desert Won’t Solve the Problem!”

 

Reports of talent shortages continue to proliferate:

  • The National Association of Manufacturers reported an all-time record high of over 500,000 vacant positions (September 2019).
  • A National Association of Home Builders Survey found that over half of contractors had shortages in 12 of the 16 categories of construction work.
  • An October 2019 member survey conducted by the National Federation of Independent Businesses (NFIB) reported that 53 percent of small business owners had great difficulty finding qualified workers (88 percent of those hiring), This year finding qualified workers has consistently been the top business problem in the monthly NFIB survey.

William Dunkelberg, NFIB Chief Economist warned, “If the widely discussed showdown occurs, a significant contributor will be the unavailability of labor — hard to call that a ‘recession’ when job openings still exceeds job searchers.” This quote is based on official Bureau of Labor Statistics (BLS) reports: the 5.9 million Americans classified as unemployed (11/1/19) and the 7 million job openings reported in the Jobs Openings and Labor Turnover Survey issued on November 5. The BLS also reported that the number of U.S. vacant jobs has exceeded the number of unemployed for the past 17 months (August 2019).

 

The official BLS estimate of unemployment (3.6% in the 11/1/19 report) is based on an extremely narrow definition: only those who actively sought a jobs in the past month are classified as being unemployed. We believe that this measure of unemployment is very misleading. The BLS also currently estimates that about 95.2 million Americans over the age of 16 are “not in the workforce.” This is an remarkably high number that has persisted since the 2008 recession.

 

Our analysis of the probably characteristics of this group of 95.2 million Americans is:

  • Approximately 55 million people over age 55 have retired.
  • What about the other 40+ million people not in the workforce? The latest official BLS survey of this group finds that nearly 4.4 million respond that they want a job. About 1.2 million report that family responsibilities, schooling, medical issues, or transportation or childcare difficulties are keeping them out of the workforce. The significant growth of the populist vote in this nation indicates that a large number of people who lost their jobs in the wake of the 2008 recession have been unable to find full-time employment due to such factors as skill deficits, age discrimination, or inability to move to areas with relevant job opportunities. A variety of sociological data provide evidence that a sizable proportion of unemployed Americans are poorly educated and have few of the job skills businesses now demand. But we estimate that as many as 27 million Americans who are willing to work are educationally qualified but lack some skills needed for currently available jobs.

 

Including the 5.9 million Americans who the BLS officially reports as unemployed, these 27 million Americans could potentially help fill the 10.5 million jobs we currently estimate are vacant across the United States provided that they receive training from employers to update their skills. Based on these figures, the actual unemployment rate is over 16 percent!

 

A September Rand Research Report warned that the education-to-employment pipeline has changed little from previous decades despite technological advances, globalization, and demographic shifts. This has resulted in major shortfalls of workers due to: (a) inadequate general elementary and high school education, (b) limited enrollment in and completion of  post-secondary education programs, and (c) lack of access to lifelong learning and training supported by employers. We believe that a staged transformation into a suitable 21st-century education system should occur at the regional level involving the leadership of major community sectors. These programs are already underway in many communities. We have coined the term Regional Talent Innovation Network (RETAIN) for such undertakings. They, however, have not gained enough traction to have an impact on the overall unemployment situation.

 

In 1970 the United States had the world’s best educated and trained workforce. Today America is a spreading talent desert with too many poorly educated workers who do not have the knowledge and skills to fill the new jobs of the 4th Industrial Revolution.

 

We are now on an unsustainable labor economic course. A Deloitte and Manufacturing Institute 2018 Skills Gap study projected that 2.4 million manufacturing jobs would not be filled between 2018 and 2028 due to skills shortages with a potential loss of $2.5 trillion in economic output over that time period. We believe that other sectors of the U.S. economy will also experience significant economic losses because of the encroaching talent desert.

 

The time as arrived for regional public-private collaboration rather than empty political and business rhetoric. It is better to rebuild quality workforces at local levels rather than passively accepting continued skills declines and government programs that are ineffective or underfunded due to political divisiveness at the federal and state levels.

 

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

Ed Gordon on Apprenticeships

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Each month, I receive a report from Edward E. Gordon at Imperial Consulting Corporation.  These reports are timely and well worth the read for those of us in the realm of business education.  Lifelong learning is a key to every aspect of success.  In this month’s report, which I have included below, Edward focuses upon the apprenticeship model of teaching and training.

I hope this sparks your interest.

 

KNOWLEDGE SHOCK Series Part 3: Apprenticeships & Other Gateways to Good Jobs
Apprenticeship through the Ages
In the 1920s my father, Earl G. Gordon, attended Bowen High School on Chicago’s south side. He was a great athlete and a member of the school’s football team that won the Illinois state championship in 1929. His dream to study at Michigan State University to become a coach was crushed by the Great Depression.
Apprenticeship in a carpenter’s union, however, provided his lifeline in those difficult economic times. In 1937 after passing his final test by designing and building a spiral staircase, he became a union carpenter. Fifty years later he received his union’s Gold Card. Until he retired at age 80 from a profession he loved, my father spent a lifetime building homes and doing custom remodeling.
Today in the Austin neighborhood on Chicago’s troubled west side, poverty is rife, and many students entering high school test as low as the 4th-grade-level in reading and math. Alex was a typical student. He didn’t attend class very often. When he did go, he spent most of his time selling drugs or making trouble. Alex didn’t see any point in attending class because, “They weren’t teaching anything I needed to know and I needed to know how to make some money.” A teacher convinced him to take a few classes at the newly opened Austin Polytechnical Academy. “Man I really took to working with the machines,” Alex recalled. He earned industry certifications that prepared him to work as a skilled machinist. After graduation, Alex was hired by a local manufacturer. He not only is considered a model employee, but he also is pursuing further training to upgrade his skills. When asked what his family thinks of him now, he speaks with pride, “I have two cars, I’m taking care of my daughter, and I make around $70,000.” He choked up when he said, “My mom is real proud.” (Philanthropy Journal News, January 3, 2017)
The Current Status of Apprenticeship & Allied Initiatives
As these two accounts show, apprenticeship and high school career academies can be keys to satisfying and gainful employment. Today about 500,000 individuals are enrolled in U.S. apprenticeship programs, about half sponsored by unions and half by businesses. But this number is not nearly enough as there are growing shortages of skilled workers in many business sectors.
Across the nation over 200,000 construction jobs are unfilled. “Contractors would hire more workers if enough qualified applicants were available,” said Stephen E. Sandherr, chief executive officer of the Associated General Contractors of America. Their recent survey of 1,600 members showed that 70 percent are having difficulty filling hourly craft jobs.
Regional initiatives to increase apprenticeship numbers are gaining momentum. They include an outreach program that provides high school students in southwestern Pennsylvania with information on apprenticeship opportunities. The Builders Guild of Western Pennsylvania that represents 16 building trade unions and 6 contractor associations forecasts that to keep up with demand the region’s training centers will need to double or triple the number of apprentices entering their program. The Chicago Regional Council of Carpenters has participated in a television series, now in its fourth season, titled “Built to Last” that is designed to showcase “the positive impact a skilled union labor force has on people’s day-to-day lives.” In a recent full-page Chicago Tribune advertisement, the council both promoted this series and also encouraged readers to learn about its apprenticeship program.
Manufacturing is another business sector reporting difficulty in finding qualified applicants. A July 2017 Society for Human Resource Management survey reported that 43.3 percent of respondents in the manufacturing sector reported increased recruiting difficulty. Only 20 percent of U.S. apprenticeships registered with the U.S. Department of Labor are in the manufacturing sector (Wall Street Journal, 6/17/2017) . The Manufacturing Institute forecasts that within ten years U.S. manufacturers will face a shortfall of 2 million qualified workers. In the Greater Chicago Metropolitan area there are over 30,000 vacant jobs in high-end manufacturing. There are another 19,000 vacancies in the rest of Illinois.
One notable initiative in the Chicago Area to address the skills-jobs gap is Manufacturing Renaissance, a non-profit organization, that was recruited by Arne Duncan, then the Superintendent of the Chicago Public Schools, to offer a pre-engineering program for high-end manufacturing careers in a Chicago public high school. The result was Austin Polytechnical Academy of which Alex earlier profiled in this report was a graduate. It has now evolved into the Manufacturing Connect program at Austin College and Career Academy. Since 2007 the Manufacturing Connect program has had over 100 manufacturers as partners. In the last 7 years, its accomplishments include: 420 work experiences including job shadows, paid internships, and summer jobs in manufacturing; 421 nationally recognized industry credentials earned by 215 students; 73 graduates earning between $20,000 and $70,000 per year plus benefits in full-time manufacturing jobs; and initiating the only current Chicago Public School dual-credit manufacturing technology class in which students earn college credits as well as industry credentials. The pre-engineering program begun at Austin College and Career Academy is being expanded to two additional Chicago public high schools, Prosser Career Academy and Bowen High School.
Manufacturing Renaissance is an excellent example of a Regional Talent Innovation Network (RETAIN) that is cooperating in a variety of programs to increase advanced manufacturing skills. It raised the private funding needed to establish the WaterSaver Faucet Manufacturing Technology Center, the only accredited machining training facility on Chicago’s west side and in Chicago Public Schools. Manufacturing Renaissance began an adult manufacturing training program that has assisted adult trainees to secure jobs or earn promotion at their current employment. This program is now being operated by the Jane Addams Resource Corporation. It is the model used by the SAFER Foundation in their very successful training program for formerly incarcerated individuals. In addition, Manufacturing Renaissance has recently been awarded funding from the Illinois Department of Commerce and Economic Opportunity to expand youth pre-apprenticeship educational opportunities.
Manufacturing Renaissance 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.
Focus on Vacant Jobs
The August unemployment rate reported by the Bureau of Labor Statistics was 4.4 percent. However the average duration of unemployment was 24.4 weeks, which is higher than any level since 1982.
Wage levels are still not rising in most occupational areas. One factor is that 20 percent of new jobs during the past year were in the restaurant sector, one of the lowest paying fields. The Department of Labor’s August JOLTS survey reported that job openings increased 8 percent to 6.2 million, the highest on record since 2000.  Finding workers with the requisite education and skills levels remains a big problem for an increasing number of businesses of all sizes. Many now rate finding and retaining skilled workers as their most important challenge. The August Federal Reserve Beige Book reports that a shortage of workers is stifling employment growth in many industries.  The Minneapolis, Atlanta, and St. Louis Federal Reserve Districts reported that firms have turned away business due to a lack of skilled workers. The Dallas and San Francisco Districts saw wages rising because of labor shortages.
Yet over 39 million prime-age workers (aged 16 to 55) have given up looking for work. Although their labor force participation rate has improved somewhat, at 62.9 percent it remains far below the participation level of the 1990s. If these American were added to the unemployment calculation, the unemployment rate would be a more accurate 18.5 percent.
Until more U.S. businesses increase their job training programs to help fill job vacancies, the skills-jobs gap will continue to retard economic growth across most of America. From 1995 to 2016, the proportion of U.S. businesses providing training fell from 35 percent to only 20 percent. Unless U.S. business get more skin in the game including support for cross-sector education and training programs, we can expect job vacancies to continue their dramatic rise. Without significant initiatives to upgrade training and education-to-employment systems, it is possible that 14 million jobs may be unfilled in the United States by 2022 driven both by massive baby-boomer retirements and the continued mismatch of worker skills and job requirements.