A Troubling Tale of Two Job Markets: High Unemployment & Shortages of Workers

Within a 24 hour period of the Bureau of Labor Statistics releasing its latest unemployment data, I received nine articles that might make most people scratch their heads and say “huh.”

Confusion over high unemployment and worker shortages First, the unemployment rate released last Friday.  It landed at 8.2 percent and for the 41st consecutive month it remained above 8 percent.  On top of that new job growth disappointed for the third month in a row.

The second article presented an even more dismal picture.  According to the monthly review posted on Jobenomics Blog, the U.S. should have produced 7.5 million jobs by July 2012 based on a goal of 20 million new jobs by 2020.. We have only produced 3.74 million, which represents a 50% shortfall. And just a note: of all the private sector jobs, 95 percent (4,300,000) were created by small business and 83 percent of all new jobs were produced by just 4 industries.

The third article suggested high unemployment isn’t going away anytime soon. A majority of economists in the latest Associated Press Economy Survey expect the national unemployment rate to stay above 6 percent – the upper bounds of what’s considered healthy – for at least four more years.

If the economists are correct, the job market will still be unhealthy seven years after the Great Recession officially ended in June 2009. That would be the longest stretch of high unemployment since the end of World War II.

Even if hiring does pick up, several economists say the unemployment rate will be hard to bring down as soon as millions of discouraged Americans who have given up looking for work resume their job searches. But because most won’t be hired immediately, the unemployment rate will stay elevated.

With the trend of those articles seemingly going from bad to worse, the next article seemed completely out of character.

Many manufacturers have trouble filling the positions, according to a survey just released by ThomasNet.com.The survey of 1,600 manufacturing companies in the U.S. shows that nearly half have openings for line workers, skilled trade workers, and engineers. A similar study about skilled labor shortages was released in May 2012 by ManpowerGroup.

A fifth article reported that three of every five employers surveyed in a 9 county San Francisco Bay Area reported they were “concerned” or “very concerned” that they may not be able to fill new positions or replace highly skilled workers, because they’re having difficulty finding applicants with the right skills and experience.

Ok – we get it.  Unemployment is high because our country has too many old manufacturing, blue collar workers who don’t have the college degrees in the sciences to do the jobs. But not so fast.  PhDs with science degrees aren’t finding this labor market a walk in the park.

The Washington post reported in the sixth article that although jobs in some high-tech areas, especially computer and petroleum engineering, seem to be booming, the market is much tighter for positions like lab-bound scientists — those workers seeking new discoveries in biology, chemistry and medicine.

One reason is that traditional academic jobs, formerly the landing spot for many scientists, are scarcer than ever. Only 14 percent of those with a PhD in biology and the life sciences now land a coveted academic position within five years, according to a 2009 suervey. And that figure has been steadily declining since the 1970s. At the same time the supply of scientists has grown far faster than the number of academic positions.

But even that surprising statistic was contradicted in another article which quoted Bill Robotka, union representative for the Engineers and Scientists of California: “highly skilled health care professionals like clinical laboratory scientists also are in short supply.”

Finally, the eighth article and ninth articles reiterated other stories about skilled worker shortages.  Although there are many unemployed workers seeking jobs, manufacturers and other employers say it’s getting harder to find shop workers (welders and wood craftsman) who have the skills they seek. Engineers, drivers, and machinists top the list of hard-to-fill jobs top the list of hard-to-fill position in the Manpower survey.

So there you have it: nine articles – two widely divergent pictures of the same job market. High unemployment for the next few years, worker shortages now.

To the innocent observer, one would think half of these articles must be propaganda or outright lies. How can we have this recalcitrant high unemployment and still have worker shortages? These seemingly contradictory stories are troubling for many reasons.

Topping the list is that bureaucrats, politicians, political pundits, and many business leaders simply don’t get it. The events leading up the recession have left a labyrinth of complexity, paradox, and ambiguity unlike anything this country has never faced. The solution is no longer as simple as if we do this, then this-will-occur. The marketplace has shifted so dramatically that old tested and proven solutions designed to fix and grow our economy simply won’t work. Technology, automation, globalization – you name it. The definition of work and the jobs required to get the work done are too different than what they were just a few years ago. The reality is that both unemployment and workers shortages are co-existing and that regardless of what strategies, theories, and excuses abound, a mismatch between jobs and skilled workers exists and will widen going forward.

Further complicating the situation and confusing the masses, the mismatch isn’t purely skills related.  Sometimes it’s geographic.  Workers who have the skills might not be able to relocate for a host of reasons including family or under-water mortgages. Other times, it’s about the money.  Thanks to outsourcing, technology, and globalization, many formerly high paying jobs don’t carry the prestige or salary they once did – and many workers struggle to accept the reduced wages. And finally it’s about globalization. Local workers are now competing with far-away job applicants who often have equal or better skills and don’t have to be physically present. Is that fair?  No. Is it real? You bet.

I’m really only just scratching the surface here about why high unemployment and shortages of skilled workers will continue for years to come. In fact, the stories will likely become more abundant and get worse before it gets better. It’s time for politicians to stop the political b.s. and work together to find a solution. It’s time for business leaders to stop looking to government for a solution. And it’s time for individuals to take responsibility for upgrading their skills and stop relying on past experience and education as a guarantee for a lifetime time of high wages.  It’s not only time….it’s long overdue.


Ira S Wolfe