According to the Bureau of Labor Statistics, there were 12 million unemployed in the U.S. as of February 2013. How can there be a labor crisis? Even with continued slow job growth, Manpower Inc. is predicting that 10 to 20 percent of U.S. businesses will be forced to close by 2020 because of a lack of skilled workers.
There is an emerging labor crisis and by acting now you can gain a long term advantage by having the best people. It”™s the result of a convergence of several key economic and demographic trends including the recession of 2008. We already face a shortage of “qualified” people with the scientific and technical skills needed in our new economy.
Just as our agrarian economy gave way to the manufacturing economy in the industrial revolution, manufacturing is now giving way to knowledge technology. Although our manufacturing production has increased fourfold since 1950, total jobs in that sector have fallen from 30 percent of the workforce to less than 10 percent today.
Forty-nine percent of our labor force was farming in 1880. Just fifty years later the farm labor force had been slashed to 21 percent but, due to technology, produced many times more food than in 1880. As new technology proliferated, productivity improved and crop prices fell.
Farmers who failed to change went out of business and were eventually employed in higher paying jobs by the emerging manufacturing economy. Consumers enjoyed more plentiful food at lower cost. This improvement continues through today. The average percentage of income we spend for food has fallen from 32.6 in 1947 to 11.7 today.
Brian Westbury, author of “It”™s Not as Bad as You Think” and chief economist at First Trust Advisors reminds us that, over the last 50 years what Americans spent on clothing and shoes fell from almost 12 percent to under 4 percent today while the amount we spend on all energy consumption including electricity, gas, heating, and air conditioning went from over 7 percent to, even with high energy prices, 5 percent today.
As we have seen with agriculture, although the free market is a perfect democracy and a harsh taskmaster, in the end everyone wins. Although many people were displaced from the farm they wound up with higher paying jobs in manufacturing. They also paid lower prices, as a percentage of their disposable income, for the food they bought.
We are continuing to make the painful transition to the new information economy and experiencing an acceleration of creative destruction due, as always, to new technology. Austrian economist Joseph Schumpeter first explained “creative destruction “ as the process by which old business models that once delivered value give way to something new and better.
We have had and will continue to have a shortage of qualified knowledge workers and our education system is changing slowly while the number of public-private partnerships continues to grow. Every business in every industry, including government and education is impacted and energy independence will help every organization to be more competitive in today”™s global marketplace.
By being aware of our impending labor crisis you can act now to attract and retain the best talent and gain long term advantage with the best people. While the invisible force of creative destruction doesn”™t obliterate every business, survivors always emerge ”” changed, stronger, more efficient and delivering to their customers, more value than ever before.
Questions for discussion:
Ӣ What skills do we need for the new knowledge economy?
Ӣ How can we attract and retain people that have them or retrain people who donӪt?
Joe Murtagh, The DreamSpeaker, is an international motivational speaker, meeting facilitator and business trainer. For questions or comments, contact Joe@TheDreamSpeaker.com, www.TheDreamSpeaker.com or call (800) 239-0058.
