One of the challenges that intrigues me is the mis-match between jobs and worker skill. I think there is a great opportunity for effective public policy to help bridge this gap. The challenge that we find is that there are often people eager for jobs who don’t have the correct skill set and employers with job openings who can’t find workers with the proper skill set. Market forces should begin to drive these groups together, but it often doesn’t. Part of this is due to frictional unemployment, where people will find themselves unemployed due to the dynamic nature of the economy—some industries will be shedding jobs while others are adding jobs, and it takes time for workers to shift between industries and develop the necessary skills. Another part, though, I think is a market failure based on lack of information and issues in the education system. There are a number of great resources available for job seekers to examine projected needs and trends, but I think the digital divide and other social factors keep large proportions of segments of the population from having this information to make decisions. Secondly, it takes resources to develop skill sets. There are entry level opportunities where people can develop skills, but one barrier of job entry for many job seekers is a particular skill set that requires some form of training. There are difficulties in acquiring this training—cost of classes, time requirements and the simple availability of classes in certain fields.
Michael Fletcher’s article on this issue through the lens of Fresno, California (Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2011/02/01/AR2011020106092.html?sid=ST2011020106132) highlighted a number of these issues. One of the factors slowing economic growth and job development is the mis-match between available skills of workers and the jobs that are available, which ties in with a nation-wide trend where unemployment remained at 9.4% nation-wide despite the fact that job openings increased by 39%. One of the questions that we face, then, is can public policy help to fill this gap. It is popular for politicians to mention “job retraining programs,” but are these effective? How can public policy makers work to connect the jobless with the right skills to find jobs? Should it be developing specific targeted skills or easing the barriers that are faced in job training?
Yesterday I listened to the debate, Cut or Invest: What’s the Best Way to Grow Our Economy? In his 2011 State of the Union Address, President Obama called for increasing federal investments in innovation as a way to accelerate economic growth and thus reduce the federal deficit. Federal government investments, he said, were critical to the creation of computer microchips, GPS, and other technologies. But conservatives say this is the wrong approach. We must cut government spending, not increase it, in order to reduce the deficit and free up private capital to innovate. The government shouldn't pick tech winners and losers—they’ll only make things worse. Who's right? One of the key points relevant to the EDA Proposal that a number of you have touched on in your blogs is that innovation is stymied by a lack of linkages between inventors and markets for those inventions. An important role that government can play is creating linkages between innovators and the potential users of those innovations, manufacturers and new markets, and workers and employers. Rob Atkinson made a forecful argument that free markets miss a lot of potential linkages that can promote development. This is a direction the Obama Administration seems to find worthy of financial support. I see the Deborah, Nick, and Brian are all addressing this. Thanks to all for the interesting discussion. Sorry that I have this campus meeting that conflicts with the class and interesting speakers Scott has arranged.
ReplyDelete