Excerpt
JIM LEHRER (Editor, Newshour): Now, a further concern underlying the bleak jobs picture. Why are employers not hiring more workers?
NewsHour's economics correspondent, Paul Solman, has some answers, part of his ongoing reporting on Making Sense of financial news.
PAUL SOLMAN: At the Washington Convention Center, an image that's becoming a cliché: the job fair line, where Americans wait in hopes of finding work.
Two years after the recession technically ended, some 14 million Americans remain officially idled. Recently, a record 4,000 swarmed the stalls at this fair in D.C.
More excerpts
JEFFREY BROWN: So, employers who can't find workers, yet workers who can't find jobs. What gives?
ZACHARY KARABELL, River Twice Research: Well, in my view, we're experiencing structural unemployment, and it's the first time in any American's collective memory that you could say that.
PAUL SOLMAN: By structural unemployment, economist Zachary Karabell means that, because of the progress of technology and globalization, lots of our old jobs are gone, and new ones JEFFREY BROWN: So, employers who can't find workers, yet workers who can't find jobs. What gives?
ZACHARY KARABELL: Well, in my view, we're experiencing structural unemployment, and it's the first time in any American's collective memory that you could say that.
PAUL SOLMAN: By structural unemployment, economist Zachary Karabell means that, because of the progress of technology and globalization, lots of our old jobs are gone, and new ones require skills that many just don't have.
ZACHARY KARABELL: There is some sort of deep shift going on economically that is changing employment patterns, irrespective of whether or not GDP growth is three percent one quarter or negative-two percent another, and that economic growth doesn't then lead to substantial hiring. There is a mismatch between what a lot of people are trained or able to do and the kinds of work that are available to them.
PAUL SOLMAN: Now, Karabell's gloomy analysis is hardly the traditional explanation of today's unemployment predicament.
MIKE KONCZAL, Roosevelt Institute: The real problem is that there's just not enough jobs, not that people are incapable of accepting the jobs that are available.
PAUL SOLMAN: Mike Konczal of the Roosevelt Institute insists unemployment is cyclical, not structural, no growth, no jobs.
MIKE KONCZAL: Cyclical unemployment is unemployment that's associated with the business cycle, with the coming and goings of how -- how strong our economy is.
PAUL SOLMAN: So, argues Konczal, just build it, the economy, and they will come -- jobs, that is.
MIKE KONCZAL: There are people who are sitting around unemployed, and there are, you know, people who want to open businesses and provide services who could hire them if they had customers. And they don't have customers because so many people are unemployed, and people are afraid of becoming unemployed, that they're not spending.
ZACHARY KARABELL: There is some sort of deep shift going on economically that is changing employment patterns, irrespective of whether or not GDP growth is three percent one quarter or negative-two percent another, and that economic growth doesn't then lead to substantial hiring. There is a mismatch between what a lot of people are trained or able to do and the kinds of work that are available to them.
PAUL SOLMAN: Now, Karabell's gloomy analysis is hardly the traditional explanation of today's unemployment predicament.
MIKE KONCZAL: The real problem is that there's just not enough jobs, not that people are incapable of accepting the jobs that are available.
PAUL SOLMAN: Mike Konczal of the Roosevelt Institute insists unemployment is cyclical, not structural, no growth, no jobs.
MIKE KONCZAL: Cyclical unemployment is unemployment that's associated with the business cycle, with the coming and goings of how -- how strong our economy is.
PAUL SOLMAN: So, argues Konczal, just build it, the economy, and they will come -- jobs, that is.
MIKE KONCZAL: There are people who are sitting around unemployed, and there are, you know, people who want to open businesses and provide services who could hire them if they had customers. And they don't have customers because so many people are unemployed, and people are afraid of becoming unemployed, that they're not spending.
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ZACHARY KARABELL: One of the best indicators of this is that companies have been making vast amounts of money for the past two years. They have been either firing people or not hiring, and they have been doing so because the combined effects of globalization and information technology means that they do not need more bodies to do more business.
PAUL SOLMAN: We all know this has been happening in manufacturing, says Karabell.
ZACHARY KARABELL: Twenty, 30 years ago, a factory might have led to 5,000 new jobs in a community. We're opening a factory. It's great. Now, even if you open an auto parts factory or a semiconductor factory, you might need 500 to 1,000 highly skilled workers to man a highly roboticized factory floor, which changes constantly, so your skill level needs to be pretty high for that. There's no thousands of jobs needed for manufacturing.
PAUL SOLMAN: And, indeed, at Marlin Steel in Baltimore, engineers design the baskets the company makes, but robots do most of the heavy lifting.
Owner Drew Greenblatt:
DREW GREENBLATT: The only way my employees can exceed the productivity of a Chinese worker or Vietnamese worker is if they have -- if they're harnessing a tremendous asset, like a robot, which makes them much more productive. So they're 40 and 50 and 60 times more productive than a Chinese worker. That's the only way it's going to work.
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DREW GREENBLATT: We need very nimble, very agile people. They have to be able to do, you know, welding one day and bending the next day, or, you know, setting up this robot this day, then setting up a different robot the next day.
PAUL SOLMAN: Problem is, Greenblatt says, he's not finding the nimble and agile. And he's no lone voice.
A National Association of Manufacturers survey found, during the recession, that almost a third of U.S. companies faced skilled labor shortages, and there are indications it may be even worse now.
My inexpert opinion is in line with Mr. Karabell's, but I would state it this way.....
Today's high-paying jobs (pay a living wage) "require skills that many just don't have." Also, there are not enough jobs for the low-skilled or under-educated worker.
Both Mr. Karabell and Mr. Konczal are partially correct, but Konczal is missing the point that many of the low-skill jobs are gone and will not return. So when the general economy improves (job wise) there still will not be enough jobs for the low-skilled.
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