Labor economists may be divided over how much the gap between employer needs and employee skills is driving long-term unemployment, but there’s no shortage of anecdotes at the ground level about businesses that can’t fill job openings. The country’s mayors are in a position to do something about it, federal officials told an audience at a meeting of the U.S. Conference of Mayors in Washington, D.C.
Representatives of both the departments of Commerce and Labor offered sobering statistics on the nation’s unemployment problem, activities at the federal level to alleviate joblessness and highlights of innovative programs at the city level.
About 10.4 million people are unemployed, with another 2.4 million not counted as unemployed because they’ve given up their search. Job openings are up 66 percent since the end of the recession, but hiring rates are up only a quarter since that time. Sometimes those unfilled vacancies require businesses to raise wages, review the skills needed for the job or take other steps, but government also needs to reassess how it invests in workforce development, said Kate McAdams, senior advisor to Secretary of Commerce Penny Pritzker.
“We need to bring everyone together in partnership to ensure training responds to industry needs,” she said.
There's considerable debate about the seriousness of the so-called skills gap, with some economists blaming corporations for low pay and others insisting labor markets show no difference in demand between low-skilled and high-skilled jobs . But employer surveys show that, at least among the minds of business leaders, a gap does exist. In an Adecco survey of 500 executives last fall, 92 percent said there's a serious skills gap in the U.S. workforce, though 44 percent of respondents said "soft skills" such as communication and critical thinking are the most serious deficits.
The skills gap has also dominated state-level policy, appearing again and again in gubernatorial State of the State speeches opening 2014. In Georgia, Gov. Nathan Deal wants to expand tuition-free technical training to more high-demand fields, low-interest loans at community colleges and launch a task force with businesses to better understand how to align educational offerings with the needs of private industry. In Idaho, where state leaders are rebranding K-12 education “K-through-career,” Gov. “Butch” Otter is calling for more instructors in high-demand programs to reduce the time needed to graduate.
But McAdams noted many cities are taking proactive steps, forming public-private organizations that work as job recruiters and trainers. Skills for Chicagoland’s Future, launched in 2012, is one such initiative. The nonprofit provides free recruitment, placement and training services to employers. A Chicago-based health care technology company called GoHealth recently announced it’s on pace to hire more than 650 new employees this year with Chicagoland’s help, well above initial forecasts of 250. More than 140 of those employees so far have come through the organization’s “train-to-hire” program as licensed insurance advisors and sales representatives.
Chicago has also worked aggressively to revamp training through its community college system by partnering with more than 100 businesses for direct input on curricula, course offerings and job placements. In Chicago's community colleges, associate degrees are now built around occupational certifications that offer better jobs and pay. Students can earn credentials that offer employment but continue working toward a full degree.
Tying class offerings to workforce needs also extends to K-12 education, said Mayor Christopher Cabaldon of West Sacramento. That means finding ways to give subjects real-world applications, forging relationships with businesses to encourage youth “apprenticeships” and encouraging all paths to training, he said. In a city with the highest number of job openings per capita in the region but one of the worst unemployment rates, the leadership needs to try something new in the area of economic development, Calbadon said.
“As a mayor, much of my focus is finding new companies and building around those we have. That strategy has diminishing returns and is not addressing in really deep ways…our long-term political responsibilities,” he said.