Everyone says the U.S. government should foster an environment of job creation. I can’t argue with that. Thing is, some jobs are being created. Employers just can’t find anybody to fill them.
According to a recent Bloomberg BusinessWeek article, Narayana Kocherlakota, president of the Minneapolis Fed, estimates that this country’s current job opening rate is 2.3 percent. Filling all job openings would bring the country’s unemployment rate down significantly, from 9.6 percent to 6.5 percent.
Wow. That unemployment rate sounds a little closer to normal.
This points out what’s been obvious to metal fabricators for years: We have a structural unemployment issue. So many people have talent and experience irrelevant in a post-credit-crisis world. (And yes, we also have so many stuck in one locale, unable to sell their house and move to where the jobs are, but that’s a subject for an entirely different rant).
I cringe when I see billions going to temporary construction projects that really don’t put a dent in the unemployment rate, because crews need to be skilled machine operators--and having mortgage brokerage experience doesn’t qualify you. The nation doesn’t need more mortgage brokers. It needs people to perform technical jobs. As Vicki Bell’s most recent blog reports, metal fabricators are feeling the structural unemployment problem. Even with sky high unemployment rates, many can’t find the skilled help they need.
Fabricators and other manufacturers have good reason to be looking for people. Many bottomed out last year, grew slowly for a few months, and then picked up a tad more as businesses rebuilt their inventories earlier this year. Conditions have slowed a bit since then, but business seems to trudge on a slow growth path. Much of that growth seems to be coming, directly or indirectly, from exports.
During an economic forum in Montana, Warren Buffett agreed: The country is on the right track, but we’re still in the middle of a long transition. The American society is turning slightly away from consumerism and toward production and exports.
New York Times columnist David Brooks said as much on a recent episode of Charlie Rose. American society needs to make more and buy less. Brooks is banking not just on manufacturing and exports, but technological innovation to help lift us out of this mess. He referred to those in Silicon Valley, where innovative thinkers gathered, shared ideas, worked in garages, and dreamed up a technological revolution. True, the Internet craze in the 1990s was a bubble, but unlike the most recent bubble, there was still a lot of value left after the tech bubble burst. Business became more productive, which in turn helped the government climb out of what was a seemingly impossible deficit situation in the early 1990s.
Still, opining about the next big thing doesn’t help fabricators find qualified workers today. The structural unemployment problem is probably why this week’s official announcement that the recession is over is, well, a tad irrelevant. The National Bureau of Economic Research announced that the recession lasted from December 2007 to June 2009, when conditions hit bottom and businesses began to ever-so-gradually expand.
That’s nice, but it doesn’t make qualified workers magically materialize.