Without Training, Low-Skill Workers Face Serious Labor Market Challenges

June 21, 2010

By Anna Suhring

Earlier this month, the Bureau of Labor Statistics released new unemployment numbers that, at first look, seem encouraging. The economy grew during the month of May, creating hundreds of thousands of new jobs. Upon closer examination, however, it is clear that the nation's job growth is tenuous at best.

Analysts note that much of the job growth is due to temporary Census positions. Furthermore, despite the emergence of new jobs, the national unemployment rate is 9.7 percent, a figure that has changed little since the beginning of the year and a figure that hovers around generational highs.

Worse, long-term unemployment is at its highest level since the U.S. Bureau of Labor Statistics began keeping track of the statistic. Today, more than 7 million workers have been out of work for six months or more. For low-income, low-skill people and minority workers, the unemployment situation is far worse. These populations have unemployment averages 25 to 50 percent higher than the national average.

According to the Economic Policy Institute, the U.S. labor market has 7.4 million fewer jobs today than it did at the beginning of the recession in December 2007. Even if jobs growth maintained the average pace of the last three months, it would take nearly two years to restore all the lost jobs, according to EPI.

But simply creating jobs won't solve some underlying, structural labor market issues.

Employers increasingly seek workers with postsecondary education and training. By 2018, the nation will need 22 million new workers with college degrees but will lack at least 3 million of the workers necessary to reach that total, according to a study released on June 15 by Georgetown University Center on Education and the Workforce. The study further predicts a steady decline in positions requiring no postsecondary education.

Without postsecondary education or training, low-skill workers face a changing job market which they, even more than the rest of the population, have little chance of reentering. Policies aimed at alleviating unemployment absolutely must address these workers' unique needs.

Short- term solutions include providing an appropriate safety net for unemployed workers in the form of unemployment insurance benefits extensions and other policy options such as work sharing. Long-term solutions include improving or establishing polices to ensure the nation's workers, particularly low-skill and disadvantaged workers, have the knowledge and skills to get and keep a job in the rapidly changing economy.

On June 10, the U.S. House Ways and Means Subcommittee on Income Security and Family Support convened to discuss possible congressional responses to long-term unemployment. Five experts from policy organizations and academia testified before the committee. The experts agreed that unemployment is likely to remain high for months if not years without concerted and focused efforts to reduce unemployment and called on Congress to pass the pending American Jobs and Closing Tax Loopholes Act of 2010, a bill to address the needs of some low-income populations by extending unemployment benefits for the long-term unemployed, funding summer jobs for youth, and extending the TANF Emergency Fund, which funds subsidized jobs.

The panelists agreed that the nation's first priority should be extending unemployment benefits to help reverse salary loss among laid-off workers. They also advocated for adopting work sharing programs to provide support for workers struggling to find and keep jobs.

CLASP agrees with these recommendations for the short term. But given the needs of employers and workers, policies must go further. The Center for Education and the Workforce study reveals that there will be a serious deficit of skilled workers. Given this reality, it is urgent that we put in place policies that give all adults the opportunity to fulfill their potential. This means providing training or retraining for workers who increasingly find themselves shut out of a job market in which postsecondary education is an ever-greater necessity.

To learn more about CLASP's recommendations for job creation strategies that focus on low-income populations, read Job Creation: Creating Work and Learning Opportunities for Low-Income Populations.


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