Skilling Up Discouraged Workers

The word "jobs" is on the lips of virtually every politician. Political campaigns pivot on what a candidate has done to create jobs or an opponent to deep-six them. However, there is little talk of filling the skilled jobs that sit vacant.

Catherine Rampell of The New York Times reports that more than half of U.S. employers claim they have jobs they can't fill, despite an unemployment rate exceeding 8 percent. It is a problem, she says, we share at about the same rate with rapidly developing economies in Brazil and India, which have much lower jobless rates.

In her "Dollars to doughnuts" blog, Rampell speculates there may be difficulties matching qualified workers with work-ready employers. But it is more likely, she says, there is a real shortage of people with the skills many businesses need.

U.S. manufacturers have warned about a mismatch of skills and available jobs for years. The problem keeps growing more serious as older workers retire and there is no one trained to replace them.

New machinery has increased productivity and lessened reliance on human skills on many manufacturing floors. Even so, there are still jobs only people can perform, but people with the required skills and work habits aren't anywhere to be found.

Think what would happen if there was a war-time scramble to skill up workers to fill those vacant, good-paying jobs in American businesses. The unemployment rate would drop, the economy would get an infusion of spending and tax revenues would increase. What politician wouldn't put that achievement on his or her campaign brochure?

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Rhyming History Without Reason

All the attention on the federal debt ceiling, deficits and debt may be a mistimed priority as some commentators and historians argue U.S. policymakers should focus instead on stimulating consumer demand to get economic recovery into full gear.

"Most people realize that a failure to raise the debt ceiling could be catastrophic," says Millsaps College historian Robert McElvaine, who is author of The Great Depression: America, 1929-1941. "But the drastic cuts in federal spending that some Republicans are demanding in exchange for an increase in the debt ceiling would be a repeat of the mistakes that prevented a full recovery in the 1930s and then caused a secondary collapse in 1937. Enacting these cuts is the most likely scenario in which the current recession could become a new depression."

"The easy thing now might be to proclaim that debt is evil and ask everyone — consumers, the federal government, state governments — to get thrifty," writes David Leonhardt, economics reporter for the New York Times. "The pithiest version of that strategy comes from Andrew W. Mellon, the Treasury secretary when the Depression began: 'Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,' Mellon said, according to his boss, President Herbert Hoover. 'It will purge the rottenness out of the system.' History, however, has a different verdict. If governments stop spending at the same time that consumers do, the economy can enter a vicious cycle, as it did in Hoover’s day."

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