Coming Labor Shortage (my headline)

Changewave.com ^ | 08/25/2004 | Tobin Smith

[Warhammer]

2. THE KAHUNA'S RANT O' THE WEEK: Blinding Flashes of the Obvious -- By Tobin Smith

OK, it’s blinding flash of the obvious time.

Sometimes I think investors get so caught up with the BIG questions about the market and their stocks that they miss the HUGE transformational changes (i.e. opportunities and dangers) occurring every day right in front of them.

I start this session with perhaps the most obvious: skilled labor in this country is NOT in surplus, but in short supply.

I refer to today’s Washington Post Business section story on employers’ lament about the “declining ranks of capable workers.”

As I hear the Dems cry out about the “Herbert Hoover”-like labor conditions in America today, I think they are doing a terrible disservice to the millions who lived through the depression. To make an analogy about the ’30s to today’s labor environment is like comparing John Kerry’s charisma to Ronald Reagan’s. It’s not only unfair, it’s not even possible.

For Pete’s sake, the story of the Florida survey company that can’t find a dozen people with enough math skills to do basic surveying is played a hundred times a day in the REAL U.S. that Kerry speaks about so ineloquently in those bore-a-thons he calls stump speeches.

I know it is hard for a man who has NEVER actually held a real job or built a real business to understand, but for many public and privately held employers in our country, a 5.5% unemployment rate means nothing.

What’s MEANINGFUL is the 2.7% unemployment rate for workers with four our more years of college. What’s meaningful is the 5.1% rate for workers with high school diplomas and 8.3% rate of unemployment for workers who didn’t graduate high school.

THE REALITY OF THE LABOR MARKET

I’ve talked about the reality of a skilled labor SHORTAGE in this country for ages, and I’ve talked about the impending knowledge labor CRISIS that is brewing in many, many industries.

The reality of the U.S. labor market right now is BLINDINGLY apparent to most employers and seemingly INVISIBLE to most politicians:

1) If you are looking for engineers, machinists, information technology technicians, radiology technicians, nurses, healthcare finance or auto mechanics today, you are having a VERY hard time filling positions.

2) There ARE two Americas: One that is educated and one that is NOT. Those with a college degree or the equivalent make 74% higher wages than those who don’t. That figure has doubled since 1979, according to the Labor Department. Greedy Republicans and tax cuts did not create two Americas -- people who chose to pursue educations and turn those educations into wealth did. If you chose NOT to make the effort and sacrifice to educate yourself, YOU put yourself in the “other America,” not George Bush.

3) We are already in labor shortage crisis mode in the healthcare and pharmaceutical industries -- almost 18% of our entire GDP. Healthcare-related jobs will comprise more than 30% of the jobs created over the next decade, and we are already short 40,000 nurses TODAY. If you are trying to find drug discovery scientists, lab technicians or medical equipment technicians in this country, you can’t. You MUST go to foreign countries or close your doors.

THIS is the reality of labor market today -- not enough skilled workers and knowledge-based professionals to meet demand.

What masks this problem is that best-sourcing is a reality in business today. There are foreign resources that can be brought to bear to solve some of these problems in a pinch.

But best-sourcing is only a Band-Aid for the coming crisis in knowledge work -- the retirement of Boomers that starts to hit at a rate of 2,000 to 3,000 EVERY DAY in 2007. We are facing a skilled labor and knowledge worker shortage of EPIC proportions at the start of the next decade.

If politicians had a CLUE about the real world of the economy they would come clean instead of coming with B.S. scare tactics to try to appeal to poorly educated citizens with low-level skills, or high-level engineers who unfortunately have skills in areas where we hold NO competitive advantage in the U.S.

They would create the biggest crusade since the Marshall Plan or the Iraq rebuilding program to help those who want to improve their lot in life -- by getting a freakin’ education.

This is why we have to win the war on terror. We have to get those resources back to the U.S. to solve our biggest looming economic problem: gaping shortages of skilled labor in our fastest-growing industries.

We are not victims in this country -- we are doers.

QUIT YER COMPLAINING

I’m tired of hearing from the victims who get the TV ads and the PAC money to tell their woe-is-me stories about how their jobs were taken by $5-a-day Asian workers. Even more ridiculous is the blatantly redneck jargon about how “illegal immigrants” are taking jobs from Americans, overwhelming the welfare system and not paying their fair share of taxes. (As if these complainers are willing to work the hard hours and menial jobs that uneducated-but-hard-working immigrants perform in this country every second.)

If you listened to the politicians, you’d think the U.S. labor market was in the midst of a job crisis. The blinding flash of the obvious is on this Labor Day is that we are on the verge of a skilled labor and knowledge worker SHORTAGE.

If this fact of life is not blatantly obvious to you, you are either a politician or one of the poor, unfortunate souls whose vocational skill set is NOT up to date for the reality of the 21st century.

I’m sorry, but I’m from the tough love camp on this one. IF your job has been exported to another part of the country, or to a whole ‘nother country, the blinding flash of the obvious is your skill can be easily automated or templated and can be done by someone somewhere else for much less.

The answer is re-education -- and don't tell me there isn't the time or money to do it. If your skills are easily replicable via automation or software virtualization, you need new skills.

Sell that $500,000 house and $50,000 truck and pay off the credit cards and downsize your life to one you can afford.

On the other hand, with the shortages ahead in the knowledge work industries and skilled labor, your future looks very bright IF you bring the education and basic skill set to the table for the 21st century.

If your skill set doesn’t cut it, don’t cry to the presidential candidate on TV that you were unfairly fragged by some foreign worker. There is WAY too much opportunity in this country to build a great life for this woe-is-meism.

I see people every day in Washington, D.C., and New York City re-tooling their lives to meet the opportunity they did NOT have in their native land. They are the workers who understand the real opportunity here.

Victimhood is not what made this country great -- hard work, risk taking and education did. On this Labor Day, I’ll salute the great American labor force as the most formidable economic power in the world.

If you are not a part of that great force, that choice was yours.

Toby

[Warhammer]

I get his email and thought that his comment about two Americas was interesting. I think he's right. There are two Americas: The America where when we get a problem we roll up our sleeves and work to fix it, and the America where we whine, sit on our ever-expanding rear ends and wait for Big Daddy Government to come fix it for us. In Smith's illustration, the America that works to fix their own problem gets the education that they need, while the lazy part doesn't.

[misterrob]

and an America that values education, sacrifice and hard work to not only that advance yourself but also your children...

and the other half that blames others for what they don't have.

[Know your rights]

What’s MEANINGFUL is the 2.7% unemployment rate for workers with four our more years of college.

I was recently laid off with no advance warning and, starting cold, found a new job (with better pay and bebefits) in less than six weeks.

[razoroccam]

Am a member of changewave alliance myself. And Toby is correct. With retiring baby boomers, it is estimated that by 2010 we will have a shortfall of up to 5 million workers.

[Pyro7480]

With retiring baby boomers, it is estimated that by 2010 we will have a shortfall of up to 5 million workers.

They were all aborted.

[SedVictaCatoni]

Community college. Community college. Community college.

America's community and technical colleges are one of our greatest unsung national assets. Many of these "desperate shortage" careers are skills taught in community colleges, not in four-year colleges. Unfortunately, too many people think that they are required to go on to get a bachelor's degree after high school, and ignore the skilled trades.

[MARTIAL MONK]

Bump