"New Times, New Challenges" an Article by Elaine Wood

New Times, New Challenges

Elaine Wood, Chief Executive Officer,

Northwest Michigan Council of Governments & Northwest Michigan Works

 

We face two kinds of unemployment: cyclical and structural. Traditionally, cyclical unemployment is caused by normal business cycles where recessions are followed relatively quickly by recoveries. Structural unemployment, on the other hand, has more to do with issues facing the unemployed individual such as lack of marketable skills, chronic health problems, generational poverty, or inadequate education. Prolonged economic stagnation worsens the situation because as cyclical unemployment rises, it becomes more difficult for the structurally unemployed to find work since there is more competition. 

Because recessions and recoveries are a part of our economic landscape, we have developed “safety nets” to help individuals cope with cyclical unemployment. Most families depend on Unemployment Insurance when faced with a job is loss. Solving problems related to structural unemployment, however, are much more difficult and expensive to tackle. 

The lengthening duration of unemployment is one of the most challenging issues we face now. Many people who were cyclically unemployed and would normally have found new work by now are instead still unemployed, and employers are reluctant to hire someone who has been out of work for over a year. The longer the duration of unemployment, the more an individual comes closer to facing the problems of the structurally unemployed.  Taking temporary work of any kind shows you are motivated and hard-working, and keeps your résumé from having gaps. Often people are afraid that taking a “lesser” position will make it appear they are not succeeding in their field. This setback can easily be explained in a cover letter or interview as a positive quality which is attractive to employers. The old adage is true: it’s easiest to find a good job when you’re currently employed.

Another major challenge occurs when a job loss is caused by skills having become obsolete. Low-skilled positions requiring little education but still paying a family-sustaining wage have been disappearing for years. Manufacturing jobs now require higher skills related to computers, mathematics, problem solving. People who have become structurally unemployed due to lack of marketable skills must re-gear, but it’s often difficult to go back to school while supporting a family. Many people need remediation in reading and math before they can undertake a community college program. However, new skills lead to new opportunities, and every day people are upgrading skills in their current field, switching to entirely new occupations, or opening small businesses. 

Older workers who find themselves without marketable skills often use different strategies. Some are retiring earlier than planned, supplementing Social Security with part time work. Other older people are working longer than planned in multiple part-time jobs.

Younger people have some advantages as they enter the labor market in this new, less predictable environment. Fortunately, most do not share their parents’ expectations of lifetime employment with the same company or earning good wages without much education. But during times of high unemployment, many young people find it difficult to compete for summer jobs or entry level positions since older, more experienced workers are now also competing for those jobs. 

Many young people who complete college with a Bachelor’s Degree often discover they still do not possess the skills employers want. Yet great positions in the skilled trades such as electronics, welding and machine programming are going wanting, and we can’t train people fast enough to fill the vacancies left by those retiring. In our eagerness to make sure more people graduate from traditional college, we have neglected other important and viable avenues such as apprenticeships and technical training.

Our work force faces many challenges in these times of employers’ changing requirements. This is coupled with economic unpredictability that requires both employers and employees to be as flexible and creative as possible. Fortunately, that’s where we Americans have always excelled. We are innovators who rise to the challenges and take responsibility for our future, and it’s heartening to see people every day taking steps to shape their future and meet the demands of a new work place. 

 

Originally published in a supplement to the Traverse City Record Eagle, November 2012 Economic Forecast: A Regional Look at the Economy.