Housing starts have plunged now that the homebuyer tax credit has ended. Despite a fall in the unemployment percentage (down to 9.5%), the hard numbers of folks seeking jobs or have given up looking at all are up now that the Census workers are leaving the market. Further in the month of June, consumer confidence measures dropped along with auto sales. I won’t even get into the Europe thang or the austerity campaigns that simply make things worse. But the really big story in this “maybe long seething depression” is how change – permanent change – is remaking the global economy and, in particular, the value propositions that will be required from American workers going forward. Simply, the economy has forced American industry to work in entirely new and efficient ways: businesses and business methods that were unsustainable and just fading out before the economy tanked are gone and those businesses that have continued or risen to replace the “old” just do not function in accordance with past practices. We are not and cannot ever go back to what was; that era is dead, buried and the coffin nails are beginning to rust.
Notwithstanding all of the bad economic news, change inevitable engenders opportunity and new jobs with new skills. The saddest part of the American story may be the legions of dedicated workers whose skills, developed over decades, are simply irrelevant going forward. There are tons of new jobs… but there are very few Americans trained to fill them. As our education budgets are crumbling, our community and large colleges/universities face massive budget cuts, we simply cannot keep up with the demand for the new skills that new economy demands.
When Massachusetts-based A123 Systems – the makers of advanced battery technologies – created a breakthrough technology with a more efficient lithium ion battery pack, they wanted to manufacture that product in the United States, particularly in the hard-hit Michigan automotive rust best. The problem was that there were insufficient American workers with the relevant skills to make it work, so the first new factories were all located in China. Only after a $250 million loan and some serious subsidies (including for training) from Michigan was A123 able to open a plant in the United States. As the federal jobless benefits are set to expire for millions of workers, the issue of how to migrate old world workers into new world values becomes critical.
The July 1st New York Times: “As unlikely as it would seem against this backdrop, manufacturers who want to expand find that hiring is not always easy. During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad… Now they are looking to hire people who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math proficiency than was previously required of the typical assembly line worker… Makers of innovative products like advanced medical devices and wind turbines are among those growing quickly and looking to hire, and they too need higher skills… ‘That’s where you’re seeing the pain point,’ said Baiju R. Shah, chief executive of BioEnterprise, a nonprofit group in Cleveland trying to turn the region into a center for medical innovation. ‘The people that are out of work just don’t match the types of jobs that are here, open and growing.’” Without training for the future, we don’t have a future. Without technical excellence and training, the sad prediction that seven of ten of the expected new jobs in the American economy will be at the bottom of the earning spectrum will come true. That’s just unacceptable!
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