Terry H. Schwadron
July 21, 2018
Amid the chaos around President Trump’s vacillating statements about Russian (or others) meddling in American elections, there was a brief moment Thursday of seemingly good news about another issue — jobs.
Here was the development: The president signed an executive order to create new National Council for the American Worker to devise a unified workforce strategy, promote vocational training and develop data on where vacant jobs are located.
Of course, if you look just a little closer, you can see the flaws in the announcement. As an executive order, there will be no money for these programs, for example, or any actual job skills training. Apparently, training should be done by states or companies themselves. And the impetus for the move was the exact opposite of what it says — this is not about workers, this is about the corporate CEOs who attended the signing ceremony in the White House, each pledging to create a designated number of vacancies.
But, especially after this week’s confusion about accepting facts at the White House, this sounded like actual acceptance of a reality: America’s private employers are noticing substantial labor shortages. Of course, if you were looking at this from a worker’s point of view, you might recognize this problem slightly differently: Despite the labor shortages, wages are still not rising in response.
One of the big contributors to the problem is the Trump administration war on immigration — unless you own the Mar-0-Lago resort, where Trump’s family has asked formally for yet more foreign seasonal worker visas, unable, apparently, to find American workes.
A recent report Thursday from ADP and Moody’s Analytics suggested that the difficulty that employers are having in finding qualified employees to fill 6.7 million job openings is becoming one of the most important economic stories of the year, according to CNBC.
To me, it is less about the specific numbers cited that about how these trends meet up with other economic and social trends.
So what does the White House propose?
The New York Post reportedthe new effort promoted by Ivanka Trump said will dovetail with her father’s goal of limiting legal immigration to workers with certain skills. “It’s complementary to the president’s message of merit-based immigration,” she said. The executive order would encourage companies to expand apprenticeships and career training programs for US workers — of course at lower than market-rate wage levels. The White House said it expected the “Pledge to America’s Workers” to lead to at least 500,000 new career opportunities for students and workers.The New York Times account said that when the pledged vacancies didn’t seem like enough to make a splash, the White House broadened eligibility, allowing for a better-sounding total.
Let’s be clear here. This is not a set of programs to actually tackle the problem of missing job training programs. Indeed, the Trump federal budget has reduced money for actual job training administered by the Labor Department.
I find this proposal a fine step, but just a little bit hypocritical. The White House’s Council on Economic Advisers have been arguing publicly that poverty in the United States is largely past, even while insisting that those who need a life raft through food stamps, housing subsidies or Medicaid must show proof of work or job training. The Trump administration believes if corporate profits are high, that will trickle down to more jobs at better wages, particularly if we stop immigration.
That Moody’s report examined changes in private payrolls that are growing, but are short of growth predicted by the companies behind those payrolls. Jobs grew by 177,000 in June, but had been predicted to grow at 200,000, as it had for the previous three months.
According to these reports, truck drivers are in low supply, Silicon Valley continues to struggle to fill vacancies, and employers across the grid are coping with a skills mismatch as the economy edges ever closer to full employment. The television networks have been reporting a pronounced shortage of commuter airline pilots.
Some companies have been reported to use bonus payments to encourage hiring, yet wages have yet to increase by significant amounts.
“Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “These labor shortages will only intensify across all industries and company sizes.”
The reason that Trump and Republican congressmen said they were pushing for corporate tax cuts was to grease investment in growth, resulting in additional jobs and higher wages. That was the theory, though it has not worked in that way. Instead, the biggest part of corporate tax cuts has gone into debt payments, stock repurchase and mergers, not workers or wages.
Things are going to get worse. Tariffs are going to create new pressures on businesses, which are threatening to halt new hiring in specific industries. The Federal Reserve is concerned about inflation, and, just over the horizon, the trend towards tasking robots to do jobs done by humans is just taking hold.
It is difficult to see this as a problem for “business” as separate from a problem for workers, for inner cities, housing, health and a long list of social ills in our society. A new look at prison populations alone could free and harness a new class of workers, for example.
The reason for the tick down in hiring certainly isn’t because there aren’t enough jobs. The Bureau of Labor Statistics reported that April closed with 6.7 million job openings. May ended with just over 6 million people the BLS classifies as unemployed, continuing a trend this year that has seen openings eclipse the labor pool for the first time.
But the report made little attempt to match jobs that are growing with concentrations of unemployed people, particularly in inner cities. And it made no serious exploration of the obvious solution at hand — more specific job skill training.
Thus the opportunity: The White House should lead by proposing actual programs rather than a new council.