Thursday, January 30, 2014

Upward mobility and the skills gap

In President Obama's 2014 State of the Union he spoke of putting in place policies that will increase jobs as well as an increase in the minimum wage.  Only some of the tools he intends on using will deal with problems of inequality, or as some prefer to call it "the income gap".  

There is a stark disparity between the packages CEO's negotiate for themselves and what the actual workers are being compensated.  Some get bonuses in the millions for cutting human resource expenses.   Most CEO's fight an increase 15-17% increase in minimum wage, claiming it is bad for business but feel their 50-70% increase is justified.  Which boggles the mind when it is the same CEO's that are looking for a market for their products.  Don’t the potential customers need to actually earning the money to spend somewhere.

To date, employers feel when a candidate has been out of work for a period of time, that employee has missed out on changes that might occur.  The corporate world is supposed to sign on, pledging to be more lenient on those who have been unemployed for extended periods.  In reality what is needed here is that the unemployed actively take steps to reduce those so called "gaps" on the resume to lessen the anxieties of future employers.  How does one stay current on industry regulations?  

In the financial and accounting industry there are regulatory continuing education courses that one is required to do that help keep you abreast of said changes.  If you are at home how do you keep up with the changes? With the economy having moved from manufacturing to service, technology has left a huge percentage of the population lacking relevant skills needed as to be viably employed.

Then there are those who are unemployed because their position no longer exists for a mired of reasons, from downsizing to some sort of automation. It can only mean your skills are no how longer marketable.  Does it then mean that the pledge from "C" suite will cover these shortfalls too?

Now I am not saying that I am grateful for all efforts the President is pushing.  I am just saying that the individual has a significant part to play here.  We are back to basics and there is a clear need for one to reinvent themselves by either going back to school (your degree attained 30 years ago is hardly relevant if changing careers altogether) or looking to see what self-employment might offer.  Americans need to take ownership of their lives and not wait for the right conditions to be put in place.

We brag so often about the greatness of America, whether Republican or Democrat we all have socialist tendencies.  Hiding behind a need for a smaller government in the hope of paying lower taxes without reducing your expectations accordingly is asking for a handout.  Continually expecting benefits when there is no revenue to cover the need is in itself expecting a handout.

The problems being experienced in the USA are replicated world over.  While the USA has an unemployment rate of 6.7% the Euro-zone is at approximately 12.1% - of course countries like Spain (26.3%) and Greece (27.7%) are the biggest contributors to the high rate.  Of course not being counted in there are those that have given up looking altogether.

Maybe the solution is that governments offer incentives to companies that opt of human workers instead of automation.  But there are the high and constant costs that come with HR whereas with equipment it is a given purchase and maintenance cost that no President can change with the stroke of a pen. 


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