Some observations on recent negative trends in productivity, employment mismatch, and labor training and education from the increasingly more bearish David Rosenberg, who notes that the Trump’s proposed policies may end up helping growth on the margins, but fail to focus on what is really important, making tens of millions of US workers competitive and qualified for today’s jobs market.
From Breakast with Rosie, via Gluskin Sheff
I don’t think we have a productivity problem — in fact, the demise of productivity is vastly overstated and that is because the Bureau of Labor Statistics (BLS) is likely vastly overstating labor input, and I’m talking here about how hours worked are estimated.
But the real travesty, and what I think deserves top priority (but I don’t see it), is that we have, in addition to 7.5 million officially unemployed (a number that is closer to 15 million when all the hidden unemployment is accounted for), 23.5 million Americans aged 25-to-54 who reside outside the confines of the labor force. And at a time when job openings are at record highs.
The problem is that unqualified applicants for these openings also are at a record high. The number of jobs available that are not being filled because the skill set is absent is at an unprecedented level — and this was an overriding theme in the latest edition of the Fed’s Beige Book.
The question is what is in the policy playbook to redress this situation?
What we need is a policy playbook that makes education, apprenticeship and training a major priority — the one plank that I had hoped would be yanked out of Bernie Sanders’ platform.
While deregulation and simplifying the tax code obviously are constructive segments of the Trump plan, they are not the most important obstacles in the way of growth. Neither is globalization.
Even the most ardent ”supply-sider” would admit that labor input is key to the outlook and this should really be at the top of the agenda — closing the widening and unprecedented gap between job openings and new hiring. There simply is no replacement for excellent education achievement with respect to maximizing labor productivity.
I see scant attention being paid to this file — surely this is more important than U.S. involvement in Brexit or trying to play a role in breaking up the European Union, don’t you think?
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