The Great American Employment Disconnect — Simple Math, Right?
Photo Courtesy: Todd Palmer
As of June 2017, according to the U.S. Department of Labor, there is a record 6.2 million job openings nationwide. It's the highest number since the Labor Department began tracking job postings in 2000.
To contrast that, there are 7 million jobless Americans. That’s more than one unemployed person for every available job. To the novice pundits, this is the employment equivalent of The Employment Perfect Storm. Simply connect the jobless with the jobs and like magic, the problem is solved and the United States jobless issue is solved.
Unfortunately, it's not that easy. There are two major disconnects within the job market today: the unemployed people do not have the skills needed by employers, and workers complain that the wages are too low.
Essentially, there are barely any qualified workers for their job openings. In many cases, there isn’t a single qualified worker for many positions.
The disconnect between employers and the unemployed goes beyond a lack of the needed skillsets. According to the NFIB Small Business Survey, CEOs have adopted the mindset that there are not many good workers left to choose from.
Their life skills, not their lack of skillsets, are negatively impacting their ability to be employed. Too many workers these days show up drunk or high, managers say. Or they refuse to work late or on weekends. Unlike previous generations, workers are not willing to pay their dues, so to speak.
Lack of a skillset, combined with a perceived lack of job dedication, leaves employers with few options. Some manufacturers are bringing in robots.
The supply of workers between the ages of 25 and 54 has plateaued. Specifically, 18 percent of workers in this age bracket are not gainfully employed. When one in five workers in this prime age category are opting out of the workforce, essentially 2.5 million people that would have been working in the 1990’s are no longer available to employers, according to the Lindsay Group in Virginia.
Others would like for Washington, D.C. to get involved in fixing the problem of a lack of qualified workers. Compounding the
situation, the Trump administration recently announced that it would be slashing legal immigrant programs by 50 percent in the next 10 years, in spite of the lack of available talent in the U.S.
On the other side of the equation, companies have to increase their wages if they want better talent. Money talks.
Times have changed and employers have been slow to react, embracing outdated thought processes they developed during the Great Recession. In that time frame there were almost seven unemployed people for every job opening. Businesses could afford to be selective — and offer lower salaries.
As the U.S. Department of Labor report indicates, the situation is dramatically different today. The job seeker to job opening ratio is 1:1. This type of tight labor market should result in an increase in worker wages by companies that must fill their job openings. That has not happened.
Why is that? The devil is in the data. The U.S. government projects that five of the 10 jobs that will grow the fastest over the next decade pay less than $25,000 a year. The jobs have titles such as personal care aide, home health aide, or food preparer. These type of jobs do not require an extensive post secondary education. Even entry level CNC machinists positions do not require years of schooling.
The result is a vicious cycle: Companies don't pay enough to attract workers, and workers do not invest in their skillsets to justify higher wages to employers. The result is that both sides complain that neither side isn’t dedicated, fair, and loyal to the other side.
In order to create change, something has to give. Businesses may need to "be less picky" and, in some cases, employees will need to work off-shifts and overtime. Both sides need to work together to bridge this employment gap.
Employers need to invest in basic, on-site training, to get inexperienced workers up to speed. Then, take things a step further to create a culture that attracts people. Build a workforce community, not just a job.
For example, imagine your company is at a job fair and you are trying to hire a customer service person for a call center. Many rigid thinking companies will only consider candidates with a call center background. They will ignore people who have worked at a dentist office as a receptionist with the perception that they lack the experience handling a heavy volume of calls.
The company won't hire the receptionist because she hasn't worked in a call center before. It sounds mind-boggling, but some employers are still that picky. As recruiters, we see this limiting thought process daily.
President Trump talks about wanting to create 25 million new jobs. The issue isn't the job openings, there are plenty. The issue is training people for jobs, at a livable wage, and the need for job seekers taking responsibility for their investment in their potential careers from a hard and soft skills perspective.
Todd Palmer is founder and president of Troy-based Diversified Industrial Staffing and Diversified PEOple LLC and a regular contributor to DBusiness.