In the past 40 years, the U.S. economy has seen five different recessions. In most of those recessions, we lost about 2 percent of our workforce (including 2001). It then took about 2-3 years for the subsequent economic growth to regrow those jobs back to the pre-recession level. With the 2001 recession, it actually took about 3.5 years to regrow the jobs. Then, the 2008 economic disaster came along — we lost 8 million jobs (6 percent of the workforce) and we are not yet back to the number of pre-recession jobs (we’re now at 60 months and counting). So, broadly, what we’re seeing is that, when recessions occur, the job losses come more quickly. They are sharper (i.e. we see deeper job cuts), and it takes longer for the U.S. economy to grow enough to get back to pre-recession levels.
Is this a cyclical issue or a secular issue (that’s how an economist would ask if we’ll see this trend continue)? I believe we are likely to see this trend continue unless we take a more focused approach towards the long-term unemployed and recognize that how work gets done has changed remarkably over the past 40 years.
Why are things different now, and why are they likely to stay that way? Purely and simply, technology and innovation is ubiquitous in every phase of our lives — and it’s having a dramatic effect on how work gets done and the skills you need to get and retain a job today.
Let’s just use Iowa as an example (by the way, Iowa has one of the lowest unemployment rates in the nation at 4.2 percent). In Iowa, a recent study said that 56 percent of all jobs in Iowa are now at least at the “middle skill” job level (that means they are jobs that require some training and education beyond high school, but less than a bachelor’s degree). However, only 33 percent of today’s working Iowans have the skills or credentials for these types of jobs. That means we have many Iowans that will need to “upskill” themselves or they risk losing their job at some future point. It also means that the currently unemployed will have a difficult time finding a new job unless they have a means to add new skills.
My view is that this is a systemic issue and no single entity (private sector, government, non-profit) can solve this alone. We can only solve it if there is good cooperation, a shared understanding of the problem and the resolve to fix it. The good news is that there are increasing numbers of examples of private/public partnerships that have had considerable success in helping the long-term unemployed gain the skills necessary to compete in the 21st century. I’ll mention just a few to provide some examples, but also acknowledge that there are many other good programs out there as well:
- Central Iowa Works (CIW) was created through the leadership of the local United Way, Des Moines Area Community college and others. CIW seeks to first understand where the new job opportunities are, what skills are needed in those jobs and then works with the unemployed to help them gain the skills necessary to compete for the new jobs. CIW works in several areas where they have identified ongoing job needs — financial services, advanced manufacturing, health care, energy and construction.
- The Evelyn Davis Center for Working Families is a partnership between the Community Foundation of Greater Des Moines, United Way of Central Iowa and Des Moines Area Community College. The center provides education and employment services, including things like job interview preparation, certificate training (very important!), résumé assistance, digital literacy training and career assessments. They provide income and work supports, such as help with access to public benefits, tax assistance and benefits screening. Finally, they provide financial services and asset building services, such as financial literacy training, credit repair programs and debt reduction plans.
There are others I could mention but I think you get the flavor of this. Here are the key attributes in programs that are making a difference today:
- They are public/private partnerships. Government can’t do this alone; non-profits can’t do this alone, and the private sector needs to be involved so that the training is moving the long-term unemployed towards where the jobs are.
- They are holistic programs — this is not just job training. These programs provide assistance all the way from initial assessment, to job interview training, to financial literacy skills. If it is job training skills only, we run the risk that those skills may be out of favor in 5-10 years.
- They include assessments and certifications on the back end so that hiring employers have greater certainty of the skills of the person they are hiring. One particular assessment tool to mention is the National Career Readiness Certificate (NCRC). The NCRC is a cognitive assessment across a variety of competencies (i.e. problem solving, critical thinking, ability to apply information, etc). It is portable across industries. They award certificates in the Bronze, Silver, Gold and Platinum designations.
Is it working? Absolutely! In central Iowa in the past two years, there have been 365 job placements (goal was 256) and 35 percent of those placements were at hourly wages above $20. It is progress, but it takes a lot of hard work by many people, including the long-term unemployed person to achieve the skills needed for the jobs of today and tomorrow. In short — it takes a village!
I’m at the White House today to hear the President’s thoughts on this issue and to share ideas with other CEOs and senior executives from around the country. I think we have some great examples from central Iowa to share. One of the attributes of Iowans is that we come together to solve problems — and make no mistake, getting the long-term unemployed back in the workforce is one of our biggest challenges and opportunities. But we can do it by working together. These people need our help and we can provide it. That’s the Iowa way.