July 9, 2012 | Commentary on Economic Growth
It may be hard to believe that in this dreadful economy there are a significant number of job openings going unfilled because employers are having difficulty finding qualified applicants. This phenomenon had been a growing concern among employers and some policy makers even when the economy was booming in the last decade. The situation has been alleviated by overall growth in unemployment, but it has not disappeared.
Why should anyone who is not one of these employers care? Because when so many millions of Americans have been unemployed for so long (43 percent of the unemployed have been out of work for more than 27 weeks), it is tragic that any job openings are going begging for applicants.
And many of these unfilled job openings are in higher-growth industries. As we have been painfully reminded these past few years, decline in one economic sector (housing) can be disastrous for the entire economy. Conversely, growth in one area of the economy reverberates positively across other sectors.
An annual survey of employers by the Manpower Group, released in May, found that 49 percent of employers in the United States are having difficulty filling certain positions. Information technology, engineering and skilled trades positions are cited as among the most difficult to fill. Among the top reasons employers cited for being unable to fill openings was lack of applicants, technical skills and experience. Drilling down into the data in this and other surveys it is apparent that other factors are also in play. These contributing factors include unwillingness on the part of employers in some cases to raise starting salaries significantly or invest in on-the-job training and less mobility among potential applicants who are underwater on a mortgage.
Though the situation is less serious than before the recession, at some point in the future the economy will improve and the labor market will tighten (partly because of baby boom generation retirements). To better deal with shortages of qualified applicants now and in the future, government policy makers need to acknowledge that government job training programs could stand improvement. Employers should overcome a myopic quarterly earnings posture and focus on long-term strategies for growth that include investing in their own skills-training efforts to enable a broader pool of applicants. To maintain their own competitiveness, workers need to attain and stay current on the qualifications needed to advance in a constantly evolving economy.
America’s competitive advantage lies in its human talent. All of us should be doing everything we can to cultivate and develop our work force.
First appeared in The New York Times