The change that is taking place in workforce in our nation right now is no less than a paradigm shift. A paradigm shift is a fundamental change in the way an entire population views and understands some aspect of the world around them. That’s what I’m talking about here. The core of this change, this paradigm shift, lies at the heart of economics itself with the basic principle of supply and demand.
Supply and demand is the fundamental principle behind all economics and economic systems. If you have two people and one apple, you have an economic system. Will they fight over it? Will they split it? If so, will they split it equally? Is half equal? And so on. That’s economics, and economic social systems are derived from there. So, if you identify/define the supply and the demand in any situation, you can see the rest of the complexities unfolding from there. And it is how you define these that frames the rest of your thinking and dialogue on any system.
In terms of workforce, it has always worked like this. The employer comes into a community with a need for workers. That is the demand. They look around at what workers are available to them. That is the supply. So anytime you hear people in a community talking about workforce, you will hear available jobs being talked about as the demand and available workers being talked about as the supply. As of now, that way of thinking is officially outmoded. It’s exactly backwards for the new paradigm that will characterize the new economy. The new reality is better framed like this. People in a community who want to work are creating the demand for jobs. The amount and nature of the jobs available to them is the supply. This is not semantics, nor is it simply academics. Understanding and embracing this reversal is the key to figuring out the workforce issue in this country. Allow me to explain.
In every town I visit, there are economic development professionals working diligently, and often successfully, to bring businesses to the community. Also in every town I visit, I hear of businesses that can’t find the workforce they need to be successful. This is “the workforce issue” that we talk so much about. We talk about the skills gap – available jobs and workers’ skills not being aligned. We talk about soft skills – how some people are just not hirable. We talk about generational differences in the workplace – usually about millennials and baby boomers. We talk about re-training – to develop a workforce with relevant skills from those folks being flushed out of dying trades. And the list goes on. There are many factors, many facets, and many people doing the good work of workforce development in our communities. Each community has things that are working well and things that need to be improved.
Unfortunately, I also hear some critical language among the relevant parties. Some of the business folks say that the schools aren’t training people to do the right thing, while some of the school folks say the employers are expecting to pay somebody less than a livable wage (by most applicable standards) and are wondering why nobody wants to work there. These criticisms, of course, come from people who don’t understand the other side’s issues at hand. For example, the technical schools are businesses, and they are responding to demand – not to the employers’ demand, but the students’ demand. The student is the customer because they are the ones paying. If students want to take an IT class and are willing to pay for it, then the college is going to offer it, regardless of whether there are any IT jobs in that community. And if no students are signing up for the CNC machinist classes that the college created at employers’ requests, then the school is not likely to keep offering them. The student is the customer. They are the ones paying for it all. If the employer was willing to pay the college to find and train people for a certain position, then the college would create those classes. Again, the college is a business and is responding to the demand of its customers.
On the flip side of the critical coin, the reality that companies don’t pay enough isn’t always because the company is acting greedily, minimizing the value of people, or squeezing margins (like an Amazon or Wal-Mart kind of situation). In most small business cases, the lower pay is because that’s the most the owners can pay for that position and still end up profitable at the end of the day. Those who criticize them for paying less than it says they should on Glassdoor, or that a professor says a young professional should be making, simply may not understand what it takes to actually perpetually create your own job and those of the people around you.
I also hear employers say that people just aren’t hirable. This of course taps into a much deeper issue that ranges from social and cultural decay created by poverty all the way to prejudices and power struggles that exist between cultures here in the US. But whatever it is or whatever you call it, it has a lot of employers saying, “Dude, what the crap is up with people not knowing how to act right?”
These aren’t simple issues to solve. Employers don’t want to go to communities that don’t have people they can hire to work for them. And communities are full of people, so, you know, they need jobs. If employers aren’t there providing good jobs, then your community has an increasing poverty problem that just snowballs.
The problem, though, is in the way we see the problem. We try to recruit businesses supposedly for the taxes they pay and the people they employ. But we use every tax-waiving incentive we can think of to get them to come (eliminating the first reason for even wanting them), and it’s not like we always have people wanting the jobs they bring (eliminating the second). Yes, in any community, there are people who want to work and make a comfortable, sustainable living that can lead to a safe retirement. But there is a big gap between a person who wants that life reality in theory to a person who is applying for an advance manufacturing job. There are a lot of steps in between. Yet, we keep working hard to bring the businesses in. We do this because we are forgetting that the ultimate reason behind all of this is the people in the community and their well-being. We are focused on the business instead of the people. I’m not talking about a worker revolution here. Remember that employers are people too. I am an employer, and I work to create my job and those of my employees every day. We need to focus on people – which includes employers and employees alike.
In every community that I visit, there is an active group of smart, dedicated people concerning themselves with workforce as a community issue. In fact, it’s frequently (almost always) identified as the greatest issue the community faces today. Each of these groups seeks to create a more functional workforce continuum – from grade school on into retirement. But while we try to coordinate all of the pieces, we are also dealing with the fact that each piece has changed significantly in the last few decades – schools, college, training, work, careers, and retirement. The pace of change in each of these areas is dizzying. And every community is struggling with these changes. The more successful communities are working on building and strengthening the collaboration among the participants in their workforce continuum. They are creating collaborations among the different groups – from K12 to Technical & Community Colleges to Universities to State Work & Training Programs to Economic Development Groups to Municipalities and State Governments to Employers and more. The most successful communities are also freely sharing data. This sounds easy, but it’s apparently not. People tend to imagine that they have some ownership over information and data about their own contacts and such. Unfortunately, our territorial tendencies in such things often makes us our own worst enemies in solving the problems we seek so desperately to solve. If your community organizations are actively sharing their data and contacts, then your community is ahead of most.
But those human flaws aside, no matter how much we share information and coordinate the workforce continuum, we will always and increasingly struggle with the workforce question as long as we stand upon a basic assumption that is so fundamental that we are not even thinking to question it. As long as we are seeing people as supply, then we will not understand the new economy.
The unemployment rate in South Carolina is officially around 3%. That’s incredibly low. There are 5 million people in the state of South Carolina with a little over 3 million of them between ages 18 and 65. This is the traditional working age (though increasingly people work past age 65). There are about 2.25 million people in the state who have jobs. So, there are about 800,000 people between the ages of 18 and 65 who don’t have jobs. Only a small group of these people are called “unemployed” because that term is reserved for those who are actively trying to find a job and cannot. For example, both a stay-at-home spouse of a high earning professional and a non-working individual receiving welfare are both left out of the numbers of the unemployed if they are not seeking retirement. In other words, it’s the people who have the demand for a job and can’t get one who are the unemployed.
People who want to work create the demand for jobs. It’s not the other way around. The fact is that people are consumers, and our entire economy is based on this truth. And just like people consume products and services, they also consume jobs. People shop for jobs on the internet like they shop for shoes. They look through them, compare them, and consider which one they want. When shopping for a job, your currency is not money, it’s your soft-skills, hard-skills, and ultimately your time and energy. In the same way you have to decide what shoes you are willing to spend your money on, you have to decide which job you are willing to spend your time and energy on. Some people have more valuable time and energy than others (as defined by the market). This is what many employers don’t understand. Employers attribute their difficulties in hiring willing workers to the millennial generation being entitled, but they are missing the point. The millennial generation is the first generation operating in this new paradigm. They see jobs like products. They are shopping for the job they want most. If they don’t see what they want, they spend more time and money increasing their currency to be able to shop for higher-level jobs (or more expensive shoes). And with increased currency, they expect a better product (a better job).
So, if you are an employer who wants “good people” then you first have to have a good product to offer them. Is your job worth their currency? Then you have to market the job like it’s a product. The amount of money and energy and time and effort and creativity and imagination poured into getting people in this country to be aware of, understand, want, and be able to buy consumer products is absolutely astounding. Think about the amount of resources spend on convincing people which car to buy. What if the kinds of resources being put into telling people to buy a Ford was being put into telling people to become a CNC machinist. And don’t think it’s about public money versus private money because it wasn’t long ago that the government gave the auto industry 80 billion dollars so that the major auto manufacturing companies wouldn’t collapse. This lead to a lot more commercials that helped me see myself in a such and such and want to buy one. We know how to market products. If we saw jobs this way, we could do much better in getting “buyers” (workers) for our “products” (jobs).
In a capitalist system, the supply will always be created by the market to respond to the demand. It is exactly the ability to respond to demand by creating a supply that is the major function of business, though many geniuses of business create a supply that is not in demand yet and then generate the demand for that supply just by introducing it. For example, there was no real demand for cars until Henry Ford created the Model T, and there was no real demand for mp3 players until Steve Jobs created the iPod.
We need to look at what the people in our community want and help them create it. Some will want a job, some will want to create a business. If there are people who want to work, then there will be people who invent ways for these people to work. This is the role of the entrepreneur. I created my own job, and I created the jobs of more than a dozen other people as well. If they want to work, I can put their energy and talents to tasks to bear fruit in the marketplace, and that’s how I get paid. Actually, the primary function of the business is to flip the supply-demand relationship and present the output of workers’ energy to the market as a supply to meet a consumer demand. So, the business has demand on both sides – consumers who want a job (workers) and consumers who want a product/service (customers). The challenge of the business is to create a supply that meets both of those demands and generates profit as a result.
But the question here is not about how to start a business, but how a community can address the workforce challenge we all face. One place to start is to take the jobs that we do have in our communities and market them like products. We need to understand lifestyle marketing. Take the person who just graduated from a technical program with a certificate in nursing. Are there nursing jobs in the community? The graduate is the demand – she wants a nursing job/career. She paid for the community college to provide that certificate (through tuition), and she is creating the demand for the job in the community. If there are a lot of nurses, then a healthcare practitioner would be wise to locate there. He or she can then turn that workforce into a commercial output that meets a consumer demand for healthcare (which is in every community).
Nurses are an interesting example, as they are just about 100% placed in jobs as they come out of nursing programs, and it seems like every post-secondary school has a nursing program. So, how is that possible? Well, healthcare as an industry is growing rapidly, but there is more to it than that. People can see those jobs. People know nurses. They interact with them. They know someone who became one. They generally know what it’s like to be a nurse. It looks challenging in a good way – a good gig, so to speak. They also know how to become a nurse if they really want to. They know they can go online to their closest technical college and look at their nursing programs. They can contact the college, and they can get the whole process of changing their career and life started moving forward. They can envision the whole thing – starting from the lifestyle desire to be a nurse all the way to what action to take right now to do it. None of the above holds true about advanced manufacturing, HVAC, electrical skilled crafts, aviation, and automotive technologies. Most people either can’t picture these jobs at all or are picturing something outdated and unattractive. Even if they did want such a job, they don’t know who even employs such people in the first place, or how to be qualified (to have the currency) to choose that job even if they saw it somewhere.
Therefore, one of the primary objectives of any community’s workforce initiative should be visibility of the jobs that exist in the community – what the jobs look like, people that work them, companies that employ them, courses and programs and training needed (and what that looks like, costs, etc.). Most industries (especially manufacturing) need to be, across the board, more visible in the job market, and any apprenticeships or courses or other opportunities should be presented in the lifestyle context (what it looks like to be a nurse or a CNC machinist).
As far as economic development, we need to remember that we don’t necessarily need jobs to come to town. Instead, we need people to have jobs. That will mean some jobs coming to town granted, but will mean other things too. Sometimes people create their own jobs. I did. Regardless, the end game is not to have jobs available here in our community. That’s just a step. The end game is for our population to be gainfully employed. We need to look at it from the people’s point of view, not from the business’s. And employers are people too, so if you focus on people, it will include them.