Is America's Skills Gap Real or an Illusion?
A disquieting feature of the nation's fitful recovery has been its inability to create new jobs that many Americans need. It isn't just those who lost jobs during the recent recession that are looking for work but an ever-growing number of new entrants into the job market, including recent high school and college graduates.
To combat the persistent lack of job creation, President Obama earlier this year asked 26 leaders from the private sector to come together and brainstorm ideas to accelerate job growth and boost America's competitiveness.
At work for three months now, the group, known as the President's Jobs and Competitiveness Council, recently issued a series of recommendations to spur hiring and create jobs. Chief among the problems identified by the group is the lack of qualified applicants for jobs that companies need filled.
Writing in an op-ed last week in The Wall Street Journal (subscription required), two members of the Obama panel, General Electric Co. Chairman and CEO Jeffrey Immelt (pictured above left) and American Express Co. Chairman and CEO Kenneth Chenault (also pictured above), noted that there were "more than 2 million open jobs in the U.S., in part because employers can't find workers with the advanced manufacturing skills they need."
The solution for creating more qualified applicants, the duo offered, was for private businesses to "quickly form partnerships with community colleges, vocational schools and others to match career training with real-world hiring needs."
But David Autor, a professor of economics who specializes in labor market studies at the Massachusetts Institute of Technology, is a bit puzzled by the supposed skills shortage that Immelt and Chenault are referring to.
The 2 million unfilled manufacturing jobs cited by Immelt and Chenault is huge considering that the sector employs only about 14 million workers in total, Autor says.
Taken on its face, the number translates to 1 in 7 jobs going unfilled because employers can't, for example, find skilled machinists. Autor says, "I find that hard to believe."
Further, in a scathing rebuttal published Sunday, also in The Wall Street Journal, columnist Al Lewis derided the need for businesses to partner with colleges, along with other suggestions enumerated by Immelt and Chenault, as little more than the same lame ideas that have been spouted before.
Though, Lewis chided, sending people to community colleges and vocational schools at least "feels like work."
Lewis' alternative (and potently populist) suggestion? "Stop shipping jobs overseas."
Citing data from the Commerce Department, he noted that multinational corporations cut nearly 3 million jobs in the U.S. in the 10 years ending 2009, while they added 2.4 million jobs abroad. What's more, those figures don't take into account the number of jobs lost due to outsourcing of work to overseas companies.
More from Lewis:
"Big, brand-name enterprises that still employ about one-fifth of all working Americans are to blame. You know, companies like American Express and GE (We bring good things to India)."
Still, if there is one welcome feature of a languid recovery, it is that an increasing number of jobs are returning to the U.S., led largely by manufacturers, including the Detroit Three automakers.
The revival is helping put Americans back to work, including about 500 workers at an NCR plant in Columbus, Ga., that builds ATMs and other self-service checkout systems, CNN Money reported.
In Louisville, Ky., GE is busily revamping a shuttered plant to build electric water heaters, while an existing plant nearby will start making refrigerators. Both products are now made overseas and returning production stateside will result in 1,300 new union jobs.
Still, the new jobs represent a mere trickle compared to the flood of jobs that have left the U.S. in recent years. In the wake of the Great Recession, high unemployment remains the Achilles' Heel of the U.S. economy. According to the U.S. Department of Labor, about 13.9 million Americans remain unemployed, while another 8.5 million people are working part-time because they can't find full-time work.
Faced with those staggering statistics, the Economic Policy Institute, a nonpartisan think tank, says the president's council is is right to recognize that the nation needs to focus on additional job creation.
According to the EPI, policies that boost jobs, such as those laid out by Immelt and Chenault in manufacturing and other fields, "can provide not only millions of badly needed jobs, but also good jobs."
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