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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is an FT contributing editor, chief economist at American Compass and writes the Understanding America newsletter
At Hadrian, an advanced manufacturer of aerospace and defence components in California, technicians are hired without prior experience. And they begin their careers reporting directly to members of a workforce development team whose own experience may be in the military or the fast-food sector.
Two hundred miles up the road, Fresno Unified, California’s third-largest public school district, helped 12,000 students earn 32,000 industry certifications last year on 81 different career pathways. These provide not only technical training and work-based learning (in partnership with local businesses) but also a focus on soft skills and employability, leadership skills and social and emotional learning.
From high schools and community colleges to factory floors and union halls, all the way up to corporate boardrooms, Americans are rediscovering the important role a range of institutions must play in connecting workers to good jobs, for the sake of both employee and employer.
For employers, the news is both bad and good. The bad news first. No one is coming to save you. The endless stream of foreign workers is over. And after years of neglect, the social infrastructure that once prepared people for the workplace has shrivelled. The good news is that this challenge also provides fertile ground for competition. Companies that prioritise their communities, partner with labour and treat hiring and training as strategic investments are going to succeed.
The current explosion in training results from the collision of two important trends. The first is that families have simply lost faith in the traditional college degree as “the ticket to the middle class”, in former President Barack Obama’s preferred phrase. With good reason. For every 100 students entering high school, only 17 will move smoothly on through the college-to-career pipeline. Many more will fail to reach college. Many others will enrol in college but drop out.
In the first two decades of the 21st century, the US added college graduates twice as fast as its labour market added jobs that require a college degree. Now, the unemployment rate for young college grads equals the level reached in the depths of the so-called Great Recession. For the first time since the 1970s, the unemployment rate for bachelor’s degree holders is higher than for occupational degree holders. Ask parents whether they would rather have their child receive a full scholarship to whatever college they can get into or enter a three-year apprenticeship leading to a good job, and most will choose the latter.
The second key trend is that the supposedly inevitable migration of economic opportunity from the physical world to the “knowledge economy” has suddenly reversed course. As the increasing capabilities of artificial intelligence threaten the value of white-collar symbol manipulators, its insatiable appetite for energy and infrastructure has left the world’s largest technology and finance companies scrambling for electricians and pipe fitters. In parallel, the bipartisan commitment to rebuild the nation’s industrial base is creating demand for technicians and machinists in places seen as “left behind”.
Micron Technology illustrates both: it is expanding production for the high-bandwidth memory needed by data centres as quickly as it can, supported by billions of dollars in federal funding. Its $100bn project in upstate New York is counting on partnerships with the local building trade unions to staff the massive construction effort and on apprenticeship programmes to prepare workers to make chips. Google, meanwhile, has begun funding the electrical training Alliance, a partnership between the International Brotherhood of Electrical Workers and the National Electrical Contractors Association.
These are not federal jobs programmes. They are efforts by the appropriate institutions throughout the nation — schools, employers, unions — to reclaim their role helping people develop the skills and values to build decent lives. In some cases, federal and state governments are not involved at all. In others, they provide frameworks and funding to support local organisations whose own success depends on career achievement for people in their communities.
A “skills gap” or a “labour shortage” is not some blight on the free-enterprise system that someone else will fix. It is a natural condition for which free enterprise is itself the solution. The losers will be those who continue to whine. The winners will be those who get to work.
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