There were more open jobs in the U.S. last month than at any point since January 2001. Yet, despite what appears to be the best job market in more than 14 years, many Americans still feel that the economic recovery has not really taken hold for them, and that the sort of solid, middle class jobs that used to be available to Americans with a high school education simply do not exist anymore.
Alongside workers struggling to find good-paying work are businesses claiming that they can’t find the workers they need. With an unemployment rate still hovering at 5.5 percent and a labor force participation rate near historical lows, employers continue to report that they cannot fill many of those open positions.
Economist Harry J. Holzer, a professor at Georgetown University’s McCourt School of Public Policy, offers some encouragement for both workers and business owners. Holzer’s analysis of BLS data suggests that solid middle class jobs — what Holzer refers to as “middle-skill” work — has not so much disappeared from the U.S. as it has shifted from an industrial economy to a “knowledge economy.”
“Declining middle-wage jobs often involve the performance of very routine tasks — such as working on an assembly line or typing manuscripts — that can easily be performed by various forms of digital technology,” Holzer writes. “In contrast, the jobs that are growing and still pay well increasingly require more complex reasoning or communications skills.”
As a result, he notes, “The traditional middle of the job market — composed primarily of construction, production and clerical jobs that require fairly little education — has indeed been declining rapidly. But another set of middle-skill jobs — requiring more postsecondary education or training — in health care, mechanical maintenance and repair and some services — is consistently growing, as are skill needs within traditionally unskilled jobs. Among these are the ones that employers have had trouble filling.”
Many economists have argued that claims by businesses that there are no qualified workers are disingenuous efforts to keep labor costs low. Businesses that traditionally offered training programs to entry-level employees no longer do so, calling on the education system — much of it funded by taxpayers — to deliver work-ready employees to their doors. Other economists point out that a lack of real wage growth in recent years suggests that business aren’t actually trying particularly hard to attract new talent.
Both arguments have merit, Holzer concedes. However, business owners reluctant to train new hires also have a point, he says. “Investing funds in on-the-job training can be un-profitable if the skills generated by such training are quite general (relative to other jobs in the region) or the workers are young, since these workers might leave the firms at any time and make it impossible for employers to recoup their training expenditures. If U.S. workers have weak basic skills (as several skill surveys have clearly documented) they will not be good candidates for training investments, especially of a more technical nature.”
Holzer proposes a three-part plan to boost both the number of middle-skill jobs in the U.S. and the number of people qualified to fill them.
First, he says, the government needs to reallocate higher education funding toward community colleges and lower-tier four-year schools, while simultaneously “creating incentives and accountability by basing state subsidies on student completion rates and earnings of graduates.”
He calls for expanding access to career and technical education programs and as well as access to on-the-job training programs such as apprenticeships.
Finally, he says, the government ought to be “assisting and incentivizing employers to create more good jobs. Other supportive policies — including higher minimum wages, paid parental leave, and labor law reform — would help as well.”
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