To solve America's unemployment crisis, we need to follow a plan from the Great Depression
- Millions of people have filed for unemployment during the pandemic, creating a national jobs crisis.
- After the Great Depression, the New Deal created the first Works Progress Administration (WPA), an initiative to hire millions of Americans for unfilled jobs, and we could do it again.
- Michael Rosenbaum, a former White House economist and Harvard fellow, is founder and CEO of Arena.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit Business Insider's homepage for more stories.
America is mired in a huge and alarming employment crisis.
I am not just referring to the more than one million workers and freelancers who filed new unemployment claims last week. Or the fact that this is the 22nd consecutive week that such filings topped that mark.
I am also referring to the more than 5.9 million unfilled jobs in the US as of the end of June, according to the Bureau of Labor Statistics.
Herein lies the crisis. Businesses across the country are looking for candidates. They cite not just the lack of skilled workers for their openings, but the lack of workers period.
A commonly argued solution would be to advise unemployed Americans to apply for these unfilled jobs. But the problem is much more complicated. There is a massive misalignment between workers and living-wage jobs with career trajectories. This is the real employment crisis – one we need to solve.
A new new deal
The answer is a Works Progress Administration 2.0, a new social compact based on lessons we have learned the last time we had a disruption as massive as the one we are now seeing.
As a reminder, 75 years ago, President Franklin Delano Roosevelt's New Deal created the first WPA as a mechanism for the country to emerge from the Great Depression. Under the initiative, millions of Americans were hired to construct public buildings, roads, bridges, and other physical infrastructure essentials.
Part of our present situation can be directly informed by that precedent. The American Society of Civil Engineers estimates that America needs to invest some $4.5 trillion by 2025 to repair the nation's bridges, roads, and other infrastructure deficiencies.
Much like back then, the WPA 2.0 would be a comprehensive jobs creation partnership between the government and the private sector that focuses on the industries that are currently driving the growth of our nation's economy and will continue to do so for the foreseeable future.
The most visible of these industries are tech, healthcare, trades, and entrepreneurship. In fact, the World Economic Forum predicts that 53% of US employees will require significant re-skilling by 2022, with the majority of emerging jobs in those industries.
Consider that technology and healthcare — two of the most robust sectors of our current economy — have long-standing vacancies, and the worker shortages are only expected to grow over the next decade. For example, healthcare occupations are projected to grow 14%, adding 1.9 million jobs by 2028. On the technology front, jobs are projected to grow 12% in that same time, adding to the current gap of one million open tech jobs in the U.S.
In the skilled trades, we also see more available jobs than workers. According to the Associated General Contractors of America, 81% of construction firms have reported difficulty in filling salaried and hourly craft positions, and 65% of firms estimate that it will be as difficult or more difficult to hire over the next 12 months.
The overwhelming majority of these jobs pay mid-to-high five figures to start and, of particular note, do not (and arguably should never) require a four-year-university education. So it's time our policies absorb this reality and focus on aligning people to these opportunities.
With this WPA 2.0 plan, we achieve both short-term and long-term gains with respect to our essential infrastructure. By matching individuals to pathways into skilled trades and launching them into these projects, we can aggressively tackle current deficiencies. At the same time, we will be significantly increasing the number of people in our nation who possess ultramodern knowledge, skill, and capabilities to strategically build and maintain our infrastructure moving forward.
But this modern, re-conceived WPA will have a more profound impact. It will chip away at the significant backlog of technology work needed by the public sector. It will strengthen our healthcare sector in ways that ultimately reduce costs for all. And, most importantly, it will create permanent pathways that can transition people from stagnant and low-paying industries into industries and career pathways that will endure and grow.
The new social compact I am proposing provides two essential structures – first, smart technology to help people efficiently find the careers that are most likely to work for them, and second, a comprehensive national apprentice program that allows individuals to work and collect salaries as they develop expertise.
The apprenticeship component would include a mechanism to accurately identify who would be exceptional in each role, and an investment both in a job and in the upskilling necessary for each exceptional individual to ramp up. According to the Bureau of Labor Statistics, there were 25,000 registered apprenticeships in the US in 2019, a 128% increase from just a decade ago. Still, it is only a drop in the bucket. Scaled up appropriately, we can make a significant impact on filling the roles that are the engine of our economy, while enabling millions who have been left behind by our current winner-take-all economy to pursue careers where they can thrive, grow, and excel.
In fact, instead of just writing checks to the recently unemployed and sending no-strings-attached money to businesses, the government can invest in creating jobs and pathways into these careers in a way that will unlock massive productivity and growth in our economy. Unemployed Americans will still be receiving financial support but doing so in the context of a job, and a pathway into a life and a career that provides happiness, dignity, and security.
Smart technology makes this happen effectively and efficiently. The power of predictive analytics and machine learning can be applied to the applicant-job matching process to reduce bias and remove reliance on traditional input-focused criteria. This helps employers hire for outcomes and helps individuals find pathways to jobs where they can succeed regardless of their background and current skill levels.
The bottom line is that the new social compact I am proposing gives us the means – and the roadmap – to solve America's employment crisis, and more importantly to restructure our economy to one that unlocks the productivity of all of our talents. We just need the will and the investment. Any economic policy that does not consider this, that does not provide pathways to upwardly mobile careers, will be money thrown away on a temporary respite, leaving us with the same problems and less money to address them in the months and years ahead.
Michael Rosenbaum, a former White House economist and Harvard fellow, is founder and CEO of Arena, which uses predictive analytics to improve and enhance workplace recruitment, retention and diversity.
This is an opinion column. The thoughts expressed are those of the author(s).
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