You Need Relevant Skills
September 13, 2016
A big bank funds a program to do that
The media keeps reporting that the U.S. unemployment rate keeps dropping. The latest official data shows that it has dropped below 5% of the eligible workforce, a level that historically has come close to defining full employment, since some people are voluntarily unemployed. They may be in transition between jobs or willingly taking time off.
The statistics hide some harsh realities, however. Most economists agree that the official unemployment rate disguises the fact that many people who would be listed as unemployed have stopped looking for work and are not captured as part of the eligible workforce. They are collecting welfare or disability payments, or earning unreported income in the so-called “underground economy,” often engaged in illegal activities like drug dealing.
Something else misleading about official unemployment data is a discrepancy among different demographic groups. According to the Bureau of Labor Statistics, the Youth (age 16-24) Unemployment Rate in the U.S. has been stuck at more than 10% for quite some time, more than double the overall rate.
One reason is a mismatch between the skills needed by employers and those acquired by young people. On one hand there is an oversupply of college graduates with virtually worthless liberal arts degrees, and on the other a shortage of skilled trade technicians.
Last January, our country’s biggest bank, JP Morgan Chase & Co., announced that it would spend $75 million on a program called the New Skills for Youth Initiative, which encourages states to invest in education programs boosting careers that are in short supply – the skilled trades prominently among them.
“Economic opportunity is increasingly out of reach for millions of young people. Without the right skills or education, they find themselves stuck in low-skill, low-wage jobs or unemployed. We are in investing in high-quality career-focused education programs so that more young people have a shot at real economic opportunity,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co.
The money is being given to state employment agencies, not to individuals, so don’t bother applying. But the program is significant in that it shows that at least one major employer is noticing and taking seriously the imbalance between job skills that are needed and those that are not. Participants in J.P. Morgan’s initiative include the National Association of State Directors of Career Technical Education Consortium.
This initiative complements JPMorgan’s $250 million New Skills at Work initiative, launched in 2014, that invests in programs that train job seekers for so-called middle-skill jobs, which require a high school degree and some postsecondary credentials but not a four-year college degree. That program targeted jobs such as computer technology, nursing and advanced manufacturing. The new program is geared more toward technical education in the skilled trades and similar fields.
More and more big employers are beginning to recognize that the shortage of skilled trade workers is jeopardizing the economic future of their companies and our country as a whole.