Friday, August 22, 2008

Labor Shortage Diaspora

Trying to dig up online an article I read in the Wall Street Journal during my internet holiday, I discovered another news search query as robust as "brain drain." Plugging in "labor shortage" yields an impressive number of stories. Tales of a looming demographic crisis read as follows:

"Everybody has interpreted the shrinking population of working-age people as a mass exodus by young people out of Vermont, but that's really a very small part of the story," Art Woolf, a University of Vermont economist, told The Times Argus. "The biggest part of the story is that people just aren't being born."

Kevin Dorn, secretary of the Agency of Commerce and Community Development, said the shortage of working-age Vermonters is a major economic hurdle facing the state. In the past year, Vermont's workforce fell by about 2,000.

"This low birthrate is a component of a much bigger problem," Dorn said.

The median age of Vermont's workforce is 42.3, the highest in the nation.

Replace "Vermont" with "Pittsburgh" in the above passage and the narrative has that familiar Rust Belt ring to it. Yet the New Hampshire solution to the problem is also (disappointingly) familiar:

The University System of New Hampshire has set a goal to try to get 55 percent of college graduates to stay in-state. Titled The 55 Percent Initiative, it is defined as "working together to convince more of our future college graduates to "work, play, and stay" in New Hampshire."

Veering back to the WSJ article, local workforce development is insufficient when faced with the demand for labor:

In many parts of the economy, there are too many workers, rather than too few. Since January, the U.S. has lost 463,000 jobs. Residential construction and manufacturers that rely primarily on the U.S. market have been hit especially hard.

But the energy industry is hard up for workers who, among other things, can make precision welds, fit pipes for pipelines and oil refineries, and understand the complex electrical wiring in modern power plants. Though the weak housing market has idled many workers who did similar jobs for home builders, their skills often aren't sharp enough to make the cut.

There is a chronic geographic mismatch between the location of the jobs and the location of talent. There is also a disparity between the skills taught at schools and the needs of industry. So, more efficient labor migration won't solve the shortage by itself. There still should be a premium on strategies to attract outsiders and establish new pathways for talent, as opposed to the refrain about retaining graduates.

The other common theme is the lack of awareness about local value propositions. Enough people know about the opportunities in a world city such as Chicago. But too few have even heard about what places such as Vermont have to offer.

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