Workers are struggling for skills support during pandemic
Labor market experts are calling for 2021 to be the year the United States revamps its social contract.
Covid-19 laid bare the holes in America’s social safety net, but the federal government’s $3.5 trillion stimulus wasn’t designed to repair them. Instead of more “short-term life support,” World Economic Forum Managing Director Saadia Zahidi told POLITICO’s Global Translations podcast, "this is the moment to reserve some part of the support for investing in the future."
Marianne Wanamaker, an economics professor at the University of Tennessee and former member of President Donald Trump’s Council of Economic Advisers, is more worried about training than further layoffs in 2021. Without skills better matched to the post-Covid economy, millions may find that new work goes to robots and other labor-saving technology instead, she said.
With 85 million Americans having trouble paying basic household expenses and 10 million fewer jobs today than a year ago, Zahidi and Wanamaker said it’s time for the U.S. government to formulate a grand bargain to help American workers retool for the uncertain, but green and digital economy that’s coming.
“There is a skills mismatch and it's growing. There needs to be a much bigger focus on reskilling and upskilling,” Zahidi said, “most governments are failing to think right now smartly about the markets of tomorrow, the jobs of tomorrow," she added. What sets America apart is that it has the resources to do something about that — to help individual workers and employers make smarter long-term decisions.
“It's not just handouts,” but “a path of moving from A to B to C” that people need to land on their feet, Zahidi said. Employers need the support as much as workers. “When they're not supported through furlough or income support schemes from governments, they're making really short-term decisions,” she said.
‘I think we give up on people’
In recent decades, advanced economies have delivered growth, but often without jobs attached. That’s why, according to Zahidi, “We can no longer continue to expect our societies to function if we don't tackle this head-on.”
The WEF says that over the next five years there will be more technology-driven job creation than job losses, but workers need additional skills and access to training to allow them to pivot when needed.
The difficulty is that individual workers often don’t have the information or resources needed to regularly update their skills midcareer, while public authorities also have struggled to predict labor market shifts: from underestimating how many workers would be left behind by outsourcing to completely ignoring the disruptive possibilities of a pandemic.
Wanamaker says that while “it’s impossible to predict what tomorrow’s skills needs are” — meaning governments shouldn’t implement vanity projects teaching people to code, for example — they do have a role in “juicing the finances of reskilling.”
“Generally, we found employers recognize the business case” for training, Zahidi said. But while reskilling is usually more cost effective than a monthslong search for a new employee, it’s easy for employers to shelve the upfront expense of training, especially during the uncertainty of a pandemic.
Some companies are already making major skills investments without government support: PWC developed a $3 billion retraining program in 2020, and Amazon recruited more than 100,000 new workers in 2020 while upskilling its existing staff.
Those investments could end up increasing inequality if governments stay on the sidelines, and employees at smaller businesses, lower-skilled workers and the unemployed miss out on those training opportunities.
The risk is real: government debt is mounting and many officials have “a pretty fixed mindset about what human beings and human capability is all about. I think we give up on people,” Zahidi said.
Becky Frankiewicz, CEO of Manpower North America, said a nudge is often all it takes to boost a worker’s skills. By identifying “skills adjacencies” employers and their staff can craft career paths through a sector, supported by “fast, short bursts of on-the-job training,” she said. According to WEF research, 85 percent of people can reskill in a matter of weeks to jobs with adjacent skills.
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published January 7, 2021