This Week's Herman Trend Alert

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  The Herman Trend Alert

October 5, 2005

Emerging Class of "Skill-Handicapped"

On September 1, 2005, the United States Department of Labor issued a report with far-reaching implications for employers, workers, and educators. While the pre-Katrina report announced that the unemployment rate had dropped to a four-year low of 4.9 percent, the average time that the 7.4 million unemployed spent searching for work in August was 18.9 weeks---up from an average of 17.6 weeks in July.

With unemployment at its lowest point since August 2001, and a growing economy, we can anticipate watching that index drop even further. The time it takes people to find a job for which they are qualified may continue to rise, particularly as skill-marginal jobs are filled.

The problem is that, as employment expands, a majority of the new jobs will require higher skill levels than are currently possessed by the unemployed. This difference between supply and demand---in skills---will limit opportunities for unprepared workers and make recruiting more difficult for employers. The problem will be exacerbated by increasing use of technology, broadening the gap between the skill- haves and have-nots.

Without aggressive training and education programs, undertaken and driven by local leaders, we will be challenged with a new class of skill-handicapped citizens. The larger the population of these workers, the higher the unemployment rate will be in a community. Gradually---and it will not take long---the skill-handicapped will become a serious inhibitor to regional, national, and international economic health.

Faced with shortages of talented workers, employers in need will be forced to hire people in other countries. This movement of jobs and labor will transcend political borders, attracting new employment opportunities to states that have invested in workforce development. In a macro sense, the same process will occur globally, stimulating economic growth in countries with a skill base to stimulate transnational movement of work and compensation.

Communities with strong skill inventories will enjoy a welcome return on investment in their education and training dollars. As we move into the future and appreciate the burden of carrying skill-handicapped citizens who are capable of performing at much higher levels, this message will become clearer.

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