Tags: work | skill | jobs | hiring

Work Is Cut Out to Fill the Gap Between Empty Jobs and Mismatched Skills

Work Is Cut Out to Fill the Gap Between Empty Jobs and Mismatched Skills
(Stuart Miles/Dreamstime)

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Tuesday, 08 May 2018 05:51 PM Current | Bio | Archive

Job openings surged to a record 6.55 million in March, the Labor Department reported Tuesday, compared with the 6.585 million unemployed workers in March.

Breaking down the data from the Bureau of Labor Statistics, we find the private sector accounted for 91% of the openings recorded in the third month of this year, with Trade, Transportation & Utilities, Professional and Business Services, and Education and Health Services generating more than 60% of the openings.

In looking at these categories, we see the pain points associated with our both our Tooling & Retooling as well as our Aging of the Population investment themes.

Are we surprised by the March job opening figures that continued to inch up compared to the last several months?

No and here’s why – according to the National Federation of Independent Businesses (NFIB) April jobs report findings:

“While 57 percent of small businesses are hiring or planning to hire, a large majority (88 percent) of them reported difficulties finding qualified candidates. Twenty-two percent of all small business owners cited the difficulty of finding qualified workers," NFIB said.

Pairing these two reports together tells us there is a clear mismatch between the pool of available worker skill sets and the needs of employers.

This should be of concern given that employment growth is one of two key drivers of GDP, with the other being productivity, which has been below trend line levels for the last two quarters.

Per the Bureau of Labor Statistics, while 1Q 2018 nonfarm business sector labor productivity figure reached an annualized rate of 0.7%, which was a pick up vs. 0.3% in the December quarter, both remain well below the long-term average of 2.1% over the 1947-2017 period. In other words, a GDP headwind.

What can businesses do to overcome this rock and a hard place situation? One solution is to train or in some cases re-train new and existing workers, but that takes time and capital.

Another solution that would help increase the talent pool of available workers would be to expand the EB-5 Immigrant Investor Program, which is currently capped at 10,000 visas.

Unlike other employment-based immigrant visas, the EB-5 program doesn’t create job competition with American citizens because in exchange for a green card, entrepreneurs and their families must make the necessary investment in a commercial U.S. enterprise and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.

In other words, this visa program centers on job creation through investment rather than educational qualifications, skills or other criteria.

The Obama administration tried to regulate the EB-5 program out of existence, but pro-growth members of the Trump administration like Office of Management and Budget Director Mick Mulvaney are expected to stop this regulation and push other ideas that shrink the size of government while getting government regulators out of the way of the economy.

As we’ve seen during Mulvaney’s tenure as temporary head of the Consumer Financial Protection Bureau (CFPB) shows he’s no fan of regulations that hold growth in the private sector in check. President Trump’s push for lower corporate taxes, a simplified tax code and less regulatory burdens on economic growth are consistent with programs like this that are a magnet for foreign investment in American jobs and infrastructure projects.

Since 2008, EB-5 immigrants have invested over $20 billion in the U.S. economy, and projects associated with their investments have created over 174,000 jobs, according to Department of Commerce research. We often hear that small business is the life blood of job creation in the U.S. and the EB-5 program is shining example.

Given the economic headwinds that we are facing because of worker skills set discrepancies, Washington should look to expand the EB-5 visa plan up from the current 10,000 visa limit, which would not only help bring additional investment into the US but help address that discrepancy while creating jobs in the process.

Wouldn’t it be nice if we saw a year over year decline in the number of job openings while the number of job hires rose?

Christopher (Chris) Versace is the Chief Investment Officer at Tematica Research, editor of the newsletter Tematica Investing, co-host of the Cocktail Investing Podcast and is a featured columnist to The Street.com as well as a contributor to Business Insider and Forbes.com

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What can businesses do to overcome this rock and a hard place situation? One solution is to train or in some cases re-train new and existing workers, but that takes time and capital.
work, skill, jobs, hiring
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2018-51-08
Tuesday, 08 May 2018 05:51 PM
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