Four years after the Great Recession, jobs remain scarce and unemployment painfully high.
Four years after the Great Recession, jobs remain scarce and unemployment painfully high.
Yet good jobs that do exist can go unfilled for lack of qualified workers, employers say.
The best jobs — jobs that pay well with benefits — are in health care, high-tech manufacturing, social services, finance and construction. All require sophisticated training or years of school.
The challenge is to find workers with the right skills, or to quickly provide those skills, to nurture the economic recovery and lift the long-term unemployed out of a deepening hole. So far, that challenge is not being met, analysts say, though public and private partnerships for job retraining offer some hope for a solution.
Long-term joblessness was at a six-decade high in August, nearly 38 percent of all unemployed, according to the Center on Budget and Policy Priorities in Washington, D.C.
The federal government defines long-term as 27 or more weeks without work.
The longer people remain unemployed or underemployed — working in low-paying jobs without benefits or opportunities for advancement — the harder it will be for them to land a good job.
National studies of hiring practices show just six months of unemployment can hurt prospects for good job offers. And workers 55 and older have less time to recover in what should have been peak earning years before retirement.
Without aggressive public and private investment in job retraining, experts warn of a permanent underclass of workers trapped in low-skill, low-wage jobs. Long-term costs to the economy, health care, social services and communities will be high, according to private and government forecasts.
Federal spending on unemployment benefits alone was estimated at $99 billion for the federal fiscal year that ended Sept. 30, 2012. About half was for emergency and extended unemployment benefits, according to an analysis by Pew Charitable Trusts.
Similar spending was running at $33 billion prior to the start of the recession in 2007, and rose to $159 billion in 2010.
Long-term unemployment forces workers to postpone the very schooling needed to improve job skills. Research also shows the long-term jobless are especially at risk of chronic unemployment or underemployment. Families are at greater risk of falling into poverty. Small businesses are less likely to expand and hire when consumer demand is soft.
The Great Recession, which officially lasted from December 2007 to June 2009, was unlike any other since World War II, said William Dickens, interim chairman of the economics department at Northeastern University in Boston. The usual pattern of recovery followed by a hiring surge did not happen. As of August, the nation still was 1.9 million jobs short of pre-recession levels.
Older and better-educated workers were least likely to be laid off in past recessions and were the first to return to work when recessions ended. The numbers of unemployed have continued to rise for both groups this time.
Older workers still on the job are staying longer to make up for the losses from the financial crisis.
Low-wage retail, restaurant and service jobs have accounted for much of the job growth since the end of the recession, according to federal data. Millions more are working part-time who would prefer to work full-time. Demographers say underwater mortgages have made it difficult for workers to follow the jobs.
"We had a big shock," Dickens said, "that was different than shocks we had before."
The sheer depth of the Great Recession shattered the old patterns. Jobs disappeared fast and for good as technology left industries struggling to adapt. Even as the economy picked up and callbacks began, the work-force numbers were smaller than before the recession.
Jobs moved where workers could not — in some cases overseas — and the good jobs that remained required new skills.
Rick Christie, 40, was forced to close his martial arts and fitness business in Decatur, Ill., when many of his students lost jobs. Fitness training was a luxury they could no longer afford.
He said he still entertains the idea of self-employment. But Christie, too, is back in school, studying machine-tool operations.
"At a certain point, I just had to close it down and recoup from that," said Christie. "I decided to go back to school and complete my education."
The federal government has placed new emphasis on job training and education at community colleges as one way to provide targeted help quickly. Federal spending on community colleges runs about $9.9 billion per year. In 2010, another $2 billion in federal funding was approved to help community colleges retrain workers displaced by the recession. Early this year President Barack Obama proposed spending another $8 billion.
Federal job training money helps, educators say, but is a relatively small component. The largest portion of their college budgets comes from state funding. Money for education was cut by states struggling with post-recession budgets.
Public-private partnerships have emerged as another source of support for retraining workers. Companies will help colleges offer job training specific to their industry, and often hire the graduates. Microsoft Corp., Caterpillar Inc., Burlington Northern-Santa Fe railroad, McDonald's, the Gap Inc., United Technologies Inc. and energy giant PG&E Corp. are a just few of the companies involved in job training.
Community college job-training programs take months, not years, to ready workers for the most promising fields. Displaced workers must be willing to commit time and money, and often switch to new lines of work. Assembly-line workers become nurses. Former small-businesses owners learn high-tech manufacturing. Older workers facing retirement study bill coding for health-care providers.
The future of many workers, communities and entire regions, will depend on how quickly people seeking new careers can make the transition.
National surveys and individual employers say good jobs are available, but sufficient numbers of qualified workers are not.
Express Employment Professionals, one of the nation's largest private staffing firms, released a report this summer estimating 3.8 million U.S. jobs were unfilled for lack of qualified workers.
Pay ranged from $11 to $30 an hour in hard-to-fill jobs that included manufacturing engineers, welders, machinists, accounting, sales, commercial truck drivers, information technology, engineers, health care and social services, and office administrative assistants.
The company based its estimates on federal employment data.
"If we had 10,000 welders, we could probably put them to work tomorrow," said founder and CEO Robert Funk.
The U.S. Bureau of Labor Statistics predicts millions of new jobs will be created in health care, social services, construction, education, high-tech manufacturing and retailing in the next decade. Nearly all require training beyond high school.
Denise Kirgan is a human resource manager for Cook Medical Inc. The family-owned medical device manufacturer, based in Bloomington, Ind., has 15,000 employees worldwide. The company makes 16,000 products for 40 medical specialties. She said the manufacturing work has become very detailed, with workers needing the ability to interpret technical manuals. Competition for new jobs is tough, with 1,000 applicants vying for 30 jobs when a new plant opened.
Filling jobs can create more jobs, according to the National Manufacturing Institute. The institute last summer estimated filling 600,000 openings nationwide would create 406,000 additional support jobs.
The institute also warned that failure to provide American workers with the right skills could result in billions of dollars in economic losses to foreign competition.
Not all economists and work-force experts agree there is a skills gap. Employers, according to critics of the theory, say the notion of a skills gap is just an excuse to postpone hiring, hold down wages and shift training costs to taxpayers.
Marc Levine, founder of the University of Wisconsin-Milwaukee Center for Economic Development, has released a series of papers on the topic. He argues that a real skills gap would force employers to compete for scarce workers by raising wages.
The true culprits, according to Levine, are slow economic growth, offshoring of U.S. jobs and corporate unwillingness to invest in workers.
Looming over the debate is the threat of individuals and families trapped in a cycle of unemployment and underemployed, unable to contribute significantly to the local, state and national economies.
"Unemployment can become a self-fulfilling prophecy," said Josh Mitchell, a researcher at the Urban Institute, "where being unemployed makes it less likely employers will even consider you."
Tim Landis is business editor for the State Journal-Register in Springfield, Ill. He spent four weeks researching the skills gap for a GateHouse Media national reporting project.
A typographical error in the headline has been corrected.