Labor supply and available jobs: the big disconnect
So many openings in the trades and elsewhere show a mismatch between available jobs and employees
We read that unemployment is the lowest it has been in many years. But we do not see much about underemployment (people working in menial jobs, multiple jobs or jobs with no benefits). We also read about the shortage of specialized labor, including construction trades, CNC operators, welders and auto mechanics.
And we read about firms desperately seeking talented employees. Then we read about discouraged college graduates with lots of debt who cannot find a position that pays enough for them to pay their bills.
Clearly, some of the people should not have gone to college or take on so much debt, which begs the question: How did they get there? There is clearly a mismatch.
Young people born in America today will live to be 100 (statistically). How is it that we expect them to decide what they want to do for the rest of their lives at age 18? It doesn't make sense. We also know that our young people do not fully mature until age 24 or 26. We have a disconnect.
How do we get these young, future workers from 18 to 24+? In my day, it was military service for many of us. A generation before, there was the CCC, the PWA and the WPA. For some, there was the Peace Corps and Vista (although these often came after college, especially for those recent grads who could not find a “real” job).
Given the current cost of postsecondary education, one must do a cost-benefit analysis. At a mega-level, college graduates can make two times or three times what non-college grads will likely make. While this might be a dated statistic, it is probably still true at some level
I recently did some refresh and upgrades in my house (20-plus years – it was time). I gladly paid the plumber $150 an hour. He is a sole practitioner in his middle years who nets more than $150,000 a year. Trade contractors tell me they will hire good, experienced electricians or HVAC mechanics in a heartbeat.
Not everyone wants to work in construction, but some people might. Job sites are safer, cleaner and, frankly, easier than when I was learning the trades in the ‘60s and ‘70s. I knew I wanted to learn the trades, not to work in the field for a lifetime, but to understand construction and development, where I have practiced for over 45 years.
When my son and daughter were coming of age, they both sought a college education and experience. They were smart, well-prepared, disciplined and studied hard. They both did well and graduated with no debt. My son works for a firm he interned for. My daughter moved to Washington, D..C., in 2009. She had three jobs before she settled into her current position.
My son loves his work. My daughter is ready for more challenge and responsibility. They both have friends and former classmates who have not landed so well. They are both grateful for what they have, but empathize with their friends struggling to find their niche.
Given the under-funded state of Social Security, young people today need to think hard about funding their own retirement. And they will likely have to work longer to get to retirement. That is OK, if you basically enjoy what you do and receive fair compensation and benefits. But in the past two decades, the trend has been to squeeze workers, both public and private. Some blame this on globalization or other megatrends. One factor may be the emphasis on a job (or a series of jobs) vs. a career.
As a community, state region and nation, we need to seriously ponder this and take action or our youth will continue to migrate out of New England.
Bill Norton, president of Norton Asset Management and principal of Harrington & Reeves, is a Counselor of Real Estate (CRE) and a Facilities Management Administrator (FMA). He can be reached at email@example.com.