- Robert Galbraith/Reuters
The future of the American economy comes down to jobs – but not the jobs people are ready for now.
Linda Duessel, a senior equity strategist at Federated Investors, believes the gap between workers’ skills and employers’ needs is wide and will remain so for a while. That is especially problematic because Duessel also thinks the labor market holds the key to the success or failure of US economic growth for the foreseeable future.
While the idea that growth in the broader US economy happens when people are employed, spending, and economically stable is not revolutionary, the continued employment of Americans is a focus of nearly every economic watcher. Duessel thinks a supply-and-demand mismatch in the labor market will make it difficult to grow the labor force enough to get the economy out of what she called its growth “malaise.”
“It is true that there are a record number of job openings in this country,” Duessel, whose firm manages just under $370 billion in assets, told Business Insider in a recent interview. “It is also true that many, many CEOs and employers are saying, ‘I can’t find people with the right qualifications or that fit my needs.'”
As we’ve noted before, job openings are hitting all-time highs in the US but are not leading to a comparable number of people being hired for new jobs. US companies are also taking longer on average to fill positions than at any other time in the data’s history.
This seems to indicate either that companies are being slow in their hiring process or that the pool of labor the firms have to select from isn’t meeting their needs. To Duessel, it’s the labor pool.
- Business Insider/Andy Kiersz
The major problem, Duessel said, is that this kind of problem won’t be solved anytime soon. It takes time and investment to retrain unemployed people for the jobs that are available, and many of the jobs these mismatched workers may be qualified for are no longer expanding.
“It used to be, back in my father’s day, that if you graduated from high school and went to work, you could just go to the steel mill or something,” Duessel told Business Insider. “That’s not the case anymore – those kind of jobs don’t exist, and the people that need those kind of jobs simply aren’t going to find them.”
Duessel did say, however, that the long-term shift needed to address these discrepancies would eventually happen.
“It’s going to take at least seven years for the transition to occur and to get the large number of workers with the skills required for the jobs we are creating,” Duessel said.
The combination of better, more forward-thinking education and fiscal policy focused on jobs that aren’t “digging a hole and then filling a hole,” as Duessel put it, could help close the gap.
Duessel also said she thought millennials would eventually figure out where the jobs are and be ready for them.
“I have very, very high hopes for the millennials,” Duessel said. “I’m very happy to move off the center stage to [the millennials], because they are the most tech-savvy generation and will be the most educated generation we’ve ever seen.”
While the outlook is bright for the younger generation, there will be a transition period as baby boomers and older members of the workforce shift out of the labor market and more and more millennials hit working age. This will mean the giant gap between experienced workers with the skills for the new jobs America is creating and those available in the labor pool will remain wide for a while.