Ed Gordon's November Jobs Report

November Gordon Report

from Imperial Consulting Corporation

"Ignoring America's Talent Desert Won't Solve the Problem!"

Reports of talent shortages continue to proliferate:

• The National Association of Manufacturers reported an all-time record high of over 500,000 vacant positions (September 2019).
• A National Association of Home Builders Survey found that over half of contractors had shortages in 12 of the 16 categories of construction work.
• An October 2019 member survey conducted by the National Federation of Independent Businesses (NFIB) reported that 53 percent of small business owners had great difficulty finding qualified workers (88 percent of those hiring), This year finding qualified workers has consistently been the top business problem in the monthly NFIB survey.

William Dunkelberg, NFIB Chief Economist warned, "If the widely discussed showdown occurs, a significant contributor will be the unavailability of labor -- hard to call that a 'recession' when job openings still exceeds job searchers." This quote is based on official Bureau of Labor Statistics (BLS) reports: the 5.9 million Americans classified as unemployed (11/1/19) and the 7 million job openings reported in the Jobs Openings and Labor Turnover Survey issued on November 5. The BLS also reported that the number of U.S. vacant jobs has exceeded the number of unemployed for the past 17 months (August 2019).

The official BLS estimate of unemployment (3.6% in the 11/1/19 report) is based on an extremely narrow definition: only those who actively sought a jobs in the past month are classified as being unemployed. We believe that this measure of unemployment is very misleading. The BLS also currently estimates that about 95.2 million Americans over the age of 16 are "not in the workforce." This is an remarkably high number that has persisted since the 2008 recession. 

Our analysis of the probably characteristics of this group of 95.2 million Americans is:

• Approximately 55 million people over age 55 have retired.
• What about the other 40+ million people not in the workforce? The latest official BLS survey of this group finds that nearly 4.4 million respond that they want a job. About 1.2 million report that family responsibilities, schooling, medical issues, or transportation or childcare difficulties are keeping them out of the workforce. The significant growth of the populist vote in this nation indicates that a large number of people who lost their jobs in the wake of the 2008 recession have been unable to find full-time employment due to such factors as skill deficits, age discrimination, or inability to move to areas with relevant job opportunities. A variety of sociological data provide evidence that a sizable proportion of unemployed Americans are poorly educated and have few of the job skills businesses now demand. But we estimate that as many as 27 million Americans who are willing to work are educationally qualified but lack some skills needed for currently available jobs.

Including the 5.9 million Americans who the BLS officially reports as unemployed, these 27 million Americans could potentially help fill the 10.5 million jobs we currently estimate are vacant across the United States provided that they receive training from employers to update their skills. Based on these figures, the actual unemployment rate is over 16 percent!

A September Rand Research Report warned that the education-to-employment pipeline has changed little from previous decades despite technological advances, globalization, and demographic shifts. This has resulted in major shortfalls of workers due to: (a) inadequate general elementary and high school education, (b) limited enrollment in and completion of  post-secondary education programs, and (c) lack of access to lifelong learning and training supported by employers. We believe that a staged transformation into a suitable 21st-century education system should occur at the regional level involving the leadership of major community sectors. These programs are already underway in many communities. We have coined the term Regional Talent Innovation Network (RETAIN) for such undertakings. They, however, have not gained enough traction to have an impact on the overall unemployment situation.

In 1970 the United States had the world's best-educated and trained workforce. Today America is a spreading talent desert with too many poorly educated workers who do not have the knowledge and skills to fill the new jobs of the 4th Industrial Revolution.

We are now on an unsustainable labor economic course. A Deloitte and Manufacturing Institute 2018 Skills Gap study projected that 2.4 million manufacturing jobs would not be filled between 2018 and 2028 due to skills shortages with a potential loss of $2.5 trillion in economic output over that time period. We believe that other sectors of the U.S. economy will also experience significant economic losses because of the encroaching talent desert.

The time as arrived for regional public-private collaboration rather than empty political and business rhetoric. It is better to rebuild quality workforces at local levels rather than passively accepting continued skills declines and government programs that are ineffective or underfunded due to political divisiveness at the federal and state levels.

Edward E. Gordon is president and founder of Imperial Consulting Corporation (www.imperialcorp.com). His book, Future Jobs:Solving the Employment and Skills Crisis - the winner of an Independent Publishers Award, is now available in an updated 2018 paperback edition.

May Gordon Report

MAY GORDON REPORT

from Imperial Consulting Corporation

"Did History End in 1945?"

Almost every day another survey is published reporting that more and more businesses simply cannot find enough workers with the requisite education for filling their current or future job openings. Projected profits losses to U.S. businesses range from $300 billion by 2022 to over $1 trillion by 2030 unless this imbalance between educational attainments and job requirements is corrected. So why aren't more American companies responding to this talent crisis by both expanding training and education for their employees and supporting career-education programs in their communities?

In his columns and recent books David Brooks cogently analyzes our nation's current social and cultural malaise. He finds a predominant culture in which past moral and social norms have been cast aside and everything is viewed through a "purely economic lens." For corporations this means maximizing profit and the fraying of former norms or commitment to their employees, communities and customers.

This shift in current corporate ethos only reflects a far broader set of social and cultural changes that began in 1945 in response to the mass destruction of Europe during the First and Second World Wars. These tragic conflicts were fueled by monarchist or totalitarian ideologies that subjugated the individual to the state. Even in democratic nations, the all-encompassing mobilization required to marshal the resources to win the war demanded a soul-numbing level of citizen conformity and deprivation. In reaction, a postmodernist movement arose first in France founded on extreme individualism and rejection of the past "truths" provided by science, history, philosophy, ethics, and theology. Instead there thinkers preached that each individual must construct his/her own "truths" based on personal experience, i.e., your personal story. In other words, truth is deduced from what I experience. Thus history is useless; the future is undecided. Only today is important. The central focus is on self, forget what you owe to your community.

We are now witnessing the destructive power of postmodern ideology. Without any unifying ethical/moral compass, opinions proliferate and finding consensus on solutions to America's most pressing economic and social problems is proving more and more difficult. Also ignorance of America's past history means that lessons from the unique heritage of our nation's local community building are not being explored. Learning from America's past accomplishments can lead us out of postmodernism's festering swamp of tribal warfare.

Lessons from the Past

Between 1890 and 1920 industrialization and the consequent growth of U.S. cities led to the disintegration of social structures and institutions. The impact of the new technologies of that time -- electricity, assembly lines, automobiles, tractors, telephones, radios -- were just as disruptive as those of today. It was the age of robber barons, swelling immigration, and the urban jungle resulting in economic upheaval and social unrest. As conditions eroded, new political movements arose across the ideological spectrum. But out of this ideological ferment, consensus was gradually built on funding public schooling to meet the education and skills demands of this new age.

Community, business, and political leaders came to see the links between supporting a new education-to-employment system and social progress. Samuel Gompers of the American Federation of Labor, industrialists Henry Ford and Andrew Carnegie, inventor and scientist Thomas Edison, and politicians such as Theodore Roosevelt and Woodrow Wilson all joined together in supporting and building mandatory public education.

One of the singular achievements of this Progressive Era was the extension pf public schooling throughout the nation. By 1918 all of the then 48 states mandated K-12 tax-supported, compulsory education enforced by truancy laws with teeth. This was revolutionary for its time. It encountered opposition in every state. The United States was well ahead of the rest of the world in adopting the first modern education-to-employment system! For example, the United Kingdom did not set up similar mandates until 1946 and Ireland in the 1980s.

Most historians agree that these decades also saw an unprecedented boom in association building. Americans of all classes and conditions created and joined a broad spectrum of voluntary organizations, most of which have endured to the present. These associations promoted a wide variety of causes -- civic, religious, fraternal, ethnic, labor, business, professional, veterans -- were among the most prominent. While some began at the national level, most were formed at the community level and spread laterally to other communities. Ordinary people -- amateurs -- formed clubs and organizations that promoted self-help and civic engagement as popular debate about local issues became part of America's culture.

That was our economic and social revolution 100 years ago. We need to do it again!

Today's Mandate: Community Renewal

The extreme individualism of today's prevailing culture has seriously weakened the bonds of community in our nation both for individuals and for organizations. The focus is on pursuing one's economic self-interest divorced from social and moral norms. There is always tension between the needs of the individual and the needs of society. However at present, our culture has overbalanced individual autonomy over social good.

The United States met the challenges posed by economic and technological change of the Industrial Revolution in the early 20th century through community activism and cooperation. We need to tap into these roots by again recognizing that moral values and social trust are essential components in this process. 

A Regional Talent Innovation Network (RETAIN) provides a proven and important template for accomplishing this transition to a 21st-century society. Already 1,000 RETAINs exist across the United States. Scattered short-term fixes will not solve the skills-jobs disconnect. It is a systemic problem that requires cooperative action to reform the education-to-employments system. Support the local RETAIN in your community. If one does not exist, this is the time to start one.

America's future needs renewal. What are we waiting for? If you don't get engaged in this process, who will? History has not ended. It is in your hands to write the next chapter.

Edward E. Gordon is president and founder of Imperial Consulting Corporation (www.imperialcorp.com). His book, Future Jobs: Solving the Employment and Skills Crisis, winner of an Independent Publishers award, is now available in an updated 2018 paperback edition.

Ed Gordon's article makes a good point. It will be leveraging regional collaborations that will drive success in the workforce arena. CareerSource Capital Region is part of the Florida Georgia Workforce Alliance that consists of three workforce boards in north Florida and three in south Georgia.

The state structures that govern our workforce efforts are very different, however, we are looking toward leveraging our resources in the training provider area and in the business services area. Both areas seem to hold an opportunity to leverage and combine efforts to assist multi-site businesses in more than one workforce area to provide services and approve needed skills training that can be used across all six workforce areas.

The data continues to show that vacancies in skilled positions go unfilled nationwide. Locally, some business owners are realizing that apprenticeships can be a great answer to filling their talent needs and the worker earns a wage while going to class. The is no "college debt" in Florida. If you are in an apprenticeship, the training is free.

This opportunity should be considered by every parent before they push their child on to college. Technical colleges, like Lively Technical College, offer a wide variety of hands-on skills training to good-paying jobs. Welding is in high demand as is IT technicians. Healthcare continues to have a slew of openings that the hospitals find hard to fill.

Some of the root causes for these openings are 1)Low wages, 2) Lack of a skill centered pipeline developed in the K-12 system, low unemployment locally that translates into fewer people in the job searching pool. 

CareerSource Capital Region is looking to lead the region with innovation in technology, an integrated services approach to benefit the career seeker and business solution that adds value to the employer community.

From my friend, Ed Gordon

"Introducing the Gordon Principle for Regional Development"

In 1967 Laurence J. Peter developed a proposition that rapidly gained such recognition that it became known as The Peter Principle: Anything that works (ideas, people, machines) will be used in progressively more challenging situations until it fails.

The example of this principle inspired me to attempt to encapsulate my basic thinking on the forces central to the health of regional economic and workforce development. Here is the Gordon Principle: For sustainable economic viability, regions need to develop education-to-employment systems aligned to labor-market changes.

In the United States, over 10 million jobs remain vacant while there is growing unrest among Americans who are either unemployed or underemployed. This is feeding populism of the left and right and the development of a variety of scapegoats to blame for their plight. However, in my opinion, the basic culprit is escalating technological change. Change is never easy for individuals, organizations, or societies. The key component in the Gordon Principle is keeping labor-market demands and education and training programs in alignment.  Public-private partnerships that feature cross-sector collaboration are vital for identifying changes in labor-market demands and then making corresponding changes in the education-to-employment pipeline.

There are U.S. communities that are supporting intense public-private regional collaborations that are rebuilding their local talent pipelines. These initiatives promote systemic changes that are providing educational preparation to more people for a job market that continues to demand more learning. Here are two examples.

Chicago, IL  Manufacturing Connect is a program operated by Manufacturing Renaissance. This intermediary includes 55 local manufacturing employers and three inner-city Chicago Public High Schools. Manufacturing Connect offers manufacturing technology classes through which participants can earn industry credentials and college credits, obtain work experience opportunities with local manufacturing firms, and access a wide variety of supportive services. Funders include the U.S. Department of Labor, the Illinois Department of Commerce & Economic Opportunity, foundations, Boeing and 22 local manufacturers.

Charleston, SC  Charleston Regional Youth Apprenticeships is a partnership among 4 local high school districts, Trident Technical College, 122 employers, Apprenticeship Carolina, the Charleston Metro Chamber of Commerce, and the Charleston Regional Development Alliance. This is a two-year program in which high-school juniors take academic classes at their high schools in the morning, go to Trident Tech for career-specific courses in the afternoon, and work part-time at a business during the school year and full-time during the summer.

Although the federal government recently has added more programs supporting career education, the major question remains, "How can we bring to scale public-private collaborations that establish and maintain regional talent-delivery systems for 21st-century jobs and careers?"

The next Gordon Report will explore some of the major cultural roadblocks that must be cleared away to advance the critical components of systemic change.

Edward E. Gordon is president and founder of Imperial Consulting Corporation (www.imperialcorp.com). His book, Future Jobs: Solving the Employment and Skills Crisis, winner of an Independent Publishers award, is now available in an updated 2018 paperback edition.