Five years after the end of the Great Recession, unemployment remains unacceptably high, in excess of 7 percent. The figure would be even worse but for an abnormally steep decrease in the labor force participation rate. Even more disturbing is the record rate of long-term joblessness, with roughly four in 10 job seekers out of work for more than half a year.
And yet, paradoxically, employers say they can't find the help they are seeking. Two-thirds of companies surveyed by the Society for Human Resource Management report difficulty finding full-time workers to fill specific openings.
At least part of the answer lies in the accumulated educational deficit that is now coming home to roost. Americans rightly view themselves as exceptional, and in many critical areas that is certainly true. How
ever, when it comes to the critical skills needed to win the global jobs competition, we are anything but exceptional.
The latest evidence comes from a recent analysis conducted by the Organization for Economic Cooperation and Development, a global association of developed nations dedicated to promoting economic and social well-being. According to this sobering report, American adults fared poorly in several critical areas essential to remaining competitive in the global workforce: literacy, basic math, and problem-solving skills.
Perhaps not surprisingly, Japan had the highest scores in all three categories, followed by Finland. As for the United States, there is bad news and worse news.
The bad news: America ranked 16th out of 23 countries in literacy, behind Estonia and the Slovak Republic and below the OECD average.
The worse news: Basic math. The USA ranked 21st out of 23 developed countries, edging out Spain and Italy. And in problem-solving skills we did only slightly less badly, finishing 14th out of 20 countries studied.
This deficiency comes at a price, given that income levels as well as general social welfare are highly correlated to education. Income inequality is a serious and growing problem in America, largely attributable to disparities in the level and quality of education. But the more immediate consequence is the emerging skills gap that has intensified the mismatch between what employers are seeking and what workers have to offer.
Results from the SHRM survey corroborate the OECD data, and highlight the consequences. Nearly one-third of employers undertook major strategic changes in the last year requiring higher skill levels from employees. Meanwhile, these firms indicate a pronounced deficit among job applicants in English, math and reading comprehension. Over half report deficiencies in problems solving (53 percent), and nearly half (46 percent) cite deficits in professionalism and work ethic.
All this distressing news comes on the heels of 11 years, billions of dollars, and an unprecedented increase in federal involvement in the wake of No Child Left Behind. Meanwhile, potential employers are beseeching the education establishment to focus on the skills deficit that hinders job creation and income growth in the US, while dedicated teachers are too often incented to emphasize preparation for standardized tests instead of indulging their passion for teaching.
Albert Einstein once said "The only thing that interferes with my learning is my education." Perhaps it is time to consider a different path.
Christopher A. Hopkins, CFA, is a vice president of Barnett & Co. Investment Counsel.