Traverse City Record-Eagle


May 1, 2014

Phil Power: Job market matter of supply, demand

Henry Ford started paying workers on his new-fangled assembly line $5 a day a century ago. That was a lot of money back then. And the pattern he set — good pay for hard work by folks without many skills — built the middle class in America and paved the way for widespread prosperity for nearly a century.

Sadly, that’s mostly over.

There are lots of reasons. Many U.S. factory jobs got shipped overseas where, for example, Chinese workers were earning in a year about what an American made in a week. Enormous gains in manufacturing productivity meant the number of workers required to run a plant tumbled. And the skills required to hold down a job on the line — running and maintaining robots, for example — were beyond the abilities of most men and women with only high school degrees.

Result: High and persistent unemployment, not just the result of the Great Recession of 2008, but the consequence of a profound change in the perceived values of skills and wages that were underlying economic assumptions through much of the 20th century.

Now, this isn’t exactly breaking news. Most of us have long known this, at least to some degree. But what is striking is our persistent inability to tailor the skills being developed in the human capital industry (schools, high schools, community colleges, universities) to meet the actual demands of the job market.

Every Michigan governor I’ve known going back to Bill Milliken in the 1970s has complained about this. And all of them have been frustrated at the lack of progress in changing it.

But whose fault is this? It’s easy to blame the schools for much of the problem. But how are the schools going to predict the skill needs of the job market 15 years out?

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