Tuesday, June 21, 2011

How Do We Fix Unemployment?

How do we fix unemployment?

According to politicians, the answer is create jobs.  Some politicians get elected to office on the promise of creating X number of jobs.  The reality is, though we know politicians would love to create jobs, they cannot deliver on their promise in an immediate and sustainable fashion.  No one can create jobs.  Jobs evolve out of need.  And need comes from ingenuity.  These politicians could sit at their desks and play on Facebook for their entire terms and jobs would still be “created” where there’s a need.

The other truth is, companies and businesses don’t want more jobs.  They want more money.  If they expand their products and services to make more money, which then leads to more jobs, everyone wins.  But opportunity for profit comes first; not jobs for the sake of jobs.

This is common sense, right? So what’s the reason for unemployment?

The answer: there’s a worker supply and demand disconnect.  The United States is still the #1 manufacturer in the world (though China will probably surpass us this year).  But thanks to rapidly changing technology, factories rely on expensive precision equipment to produce, rather than simple manual labor.  Employees must possess at minimum basic math skills, and most need advanced technical training.

Yet, roughly 80 million Americans – that’s 40% of the adult population (over age 25) – are undereducated.  Not only are these Americans not getting the education they need to fill the jobs available, but many companies no longer spend the resources to train employees.  Companies want employees to come in experienced and ready to work.

To mend the gap in skills available and skills required, Americans need to become aware of the skills needed and train themselves accordingly.  This Recession has been notorious for the white collar workers it’s affected, but the largest spike in unemployment came from the undereducated.

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