Students can be fast learners. While policymakers continue to jostle over how to get the economy growing faster, students are quick to see the solution.
Despite some economic growth and better profitability for employers, the labor market remains weak. Idaho’s current unemployment rate of 9 percent is right at the national level, but the Treasure Valley has seen more improvement, dropping to 8.5 percent as of September. All of these rates, however, remain well above the 5 or 6 percent that occurs under normal economic conditions.
It is hard to argue any longer that the high number of unemployed workers is due to a recession. U.S. unemployment is clearly structural, not cyclical.
The unemployment rate remains high because many workers, both those with college degrees and those with just a high school diploma, don’t have the skills necessary for available work. A May survey conducted by Manpower Group found that about half of all U.S. employers have difficulty filling positions because of a lack of job applicants in the areas of skilled trades, engineering and machine operations, to name just a few.
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The U.S. Department of Labor reported there were 3.4 million job openings on the last business day of September. Although the number of job openings remains below its 2007 level, it has risen 21.7 percent in just the last 12 months.
Businesses large and small are having a hard time finding workers. An October report from the National Federation of Independent Businesses found that one-third of small businesses report having few or no qualified applicants for their firms’ open positions.
Some recent research has found that the structural unemployment we are experiencing accounts for up to 3 percentage points of total unemployment. This is particularly true in states such as Idaho, where construction was previously a big driver of employment.
Today’s workforce lacks the necessary skills for the jobs available.
Some have placed the blame for this on our educational institutions, both K-12 and college. The argument goes that our high schools and colleges are not properly preparing students for today’s economy.
The problem has less to do with the educational institutions and more with the students themselves. It is not that U.S. workers aren’t learning anything in school. It's rather that students are choosing to study in overcrowded fields.
For the most recent year available, 2009, the U.S. Department of Education reports that 32 percent of all bachelor’s degrees awarded were in business, social sciences or history. Meanwhile, graduates in engineering and in the physical sciences make up on less than 6 percent.
The quality of the education these graduates receive is fine. Students just don’t seem to want to study what employers need.
It shouldn’t take long for students to see where the opportunities lie.
Peter Crabb is a professor of finance and economics at Northwest Nazarene University in Nampa. Reach him at firstname.lastname@example.org.