The latest news out of Washington, D.C., is both good and bad for the U.S. economy and the workforce nationwide. Economic growth is on the uptick, according to new projections released by the Congressional Budget Office, but the labor market is expected to stay stagnant over the next few years.
Gains in housing construction and business investment will contribute to a 3.1 percent rise in economic growth this year, up 1.9 percent from last year. But an aging workforce will keep the unemployment rate virtually the same at 6.7 percent, along with upward pressure from an influx of unemployed workers who are just now returning to the job market after a long hiatus.
If the demand for goods and services rises and economic output accelerates past the expected 3.4 percent rate over the next two years, that projection could change, making the job market more favorable, the report notes. However, there is another issue mentioned in the report that is contributing to the unemployment rate. It’s one that has become more prevalent as the economy has improved and has been something employers have struggled with since economic recovery began: the skills gap.
Companies that are adding a large number of workers or high-paying jobs, especially manufacturing and high-tech firms, are having trouble filling vacancies because of the widespread lack of skilled workers. While 11 million workers are unemployed, 4 million jobs go unfilled due to a shortage of qualified candidates withspecialized training. The rise in technology and automation in the workplace has raised the level of skills demanded by employers across the board.
CEOs of private firms, in particular, expect to increase hiring by just 1.9 percent this year, according to a PriceWaterhouseCooper survey. The economy is not to blame for this — the dearth of highly skilled workers in both white- and blue-collar industries is. Nearly 30 percent of companies surveyed reported the skills gap as a major barrier to growth, along with increased taxation, regulatory pressures and shrinking margins.
From factories to finance firms, employers are particularly in need of workers educated in science, technology, engineering and math (STEM). Corporations are seeking employees equipped to tackle data analysis and mounting reporting requirements, while manufacturers are searching for workers with enough technological know-how to operate complex, automated systems.
Cities across the U.S. are beginning to take notice of the skills gap problem, and many are launching workforce development programs and initiatives to bridge it and help students better transition from the classroom to the workforce. Read about how regions from Ohio to North Carolina are taking action in this recentBusinessClimate.com post.
via:http://businessclimate.com/blog/2014/02/solving-skills-gap-boosting-workforce-talent-reduce-unemployment/
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