Happy Fourth of July! Birthdays are a good time to reflect upon things. Since PCDA is focused on jobs, we thought we would take this opportunity to review the American job market, at least from our point of view.
You may have noticed we talk a lot about workforce. Here's why: In 1950, 83% of the workforce had neither a college education nor a specific skill certification. Not to worry, however. Seventy four year ago 79% of the jobs in American did not require either. That means there were five percent more workers than jobs, roughly equal to what economics think of as "full employment."
Today, the percentage of jobs open to those with only a high school diploma has dropped to 35%. Competing for those jobs are 44% of the population. We have obviously done a better job, as a society, of getting more people educated or trained but we have not done it at a fast enough rate. As a result, 26% of those without college or skills training are theoretically unemployed.
By contrast, 65% of the jobs in today's economy require some college or a specific skill. Only 56% of the population can compete for those jobs. That means the supply of jobs significantly exceeds the supply of potential employees for the majority of today's workforce. These workers not only have greater job choices but they enjoy higher pay since their skills and/or education is in demand.
Pundits have often described this as the "barbell effect" and have used this to proclaim the death of the American middle class. That, of course, is a matter of perspective. If the middle class is defined as those with only a high school diploma, as it was in 1950, then the middle class has indeed turned into the "working poor."
Most college grads or skilled workers, however, likely think of themselves as middle class. If you asked today's welder, teacher, legal secretary or truck driver if they are rich, they might not agree with you. What appears to have happened is that admission into the middle class now requires additional education or skills training.
So what do we have to do to get more people trained or further educated so that they can move into the middle class and fill the available jobs? That's a tough question because, as Americans, we certainly object to the notion of forcing anyone to do something they do not want to do. What can be said with certainty is that job growth in many industries, notably manufacturing, is being constrained due to a lack of various skilled workers.
Moreover, getting trained in a skill today is often different than it was in the past when companies handled most of the training. Today, most Americans work for small businesses and there are fewer resources available for training. While many companies still offer training, they typically want either higher education or another skill to prove that a person is worth the investment. In addition, many companies with training capabilities are concerned about providing training to someone who might jump ship in three years.
Add to this the consideration that not all college graduates have degrees that are in high demand. In addition, the logistical challenge of getting the right skill or education in the same place and time as the company that needs that person can be daunting. It is also true that almost no employer can tell you what their workforce needs will be five or ten years from now.
The bottom line is that we have all become career entrepreneurs. Whether we work for companies or run our own business, all of us must manage and guide our own careers in a much more assertive way than in the past. More Americans than ever must plan for retirement in a post-pension world. Health care and other benefits continue to evolve. We change jobs far more than back in the day and, yes, we alone are responsible for making sure that our skills and education are relevant to a fast changing economy.
So this week we celebrate independence. Remember as you celebrate that your career, your livelihood and your future are more independent from any anyone else, (company or person) than ever before. It's up to you whether or not that's a good thing.