Skills gap an America-wide problem

Federal Reserve policy makers say that while the American job market shows signs of improving, they are still concerned with the “elevated” level of unemployment. One reason may be because employers can’t find qualified help, according to economists like Dean Maki.

The number of positions waiting to be filled this year has climbed to levels last seen in 2008, when the jobless rate was around 6 percent. The housing bust and ensuing financial crisis put people out of work whose skills may not correspond with those needed by the health-care providers and engineering firms where jobs go wanting.

“What’s going on here is a mismatch of the skills of the unemployed and at least some of the positions that are becoming available,” Maki, chief U.S. economist at Barclays Capital in New York, said in an interview. “This seems to be slowing the pace of filling those job openings.”

The issue has come to the forefront in Maine, particularly through meetings Gov. Paul LePage has held around the state with employers. Employers have consistently said they have open positions – looking for everything from skilled machinists to computer programers — that go unfilled, due to a lack of qualified applicants.

Nationwide, a dearth of skilled applicants may prevent the unemployment rate from declining further and could crimp consumer spending, which accounts for about 70 percent of the economy. Companies also may remain reluctant to expand their workforces as the threat from Europe’s debt crisis and political gridlock in the U.S. weighs on the economic outlook.

Over the three months ended in October, the average number of positions waiting to be filled climbed to 3.26 million, the most in three years, according to Labor Department data released Tuesday in Washington. The jobless rate, which averaged 5.8 percent that year, was at 9 percent in October. It fell to 8.6 percent last month, in part reflecting a drop in the size of the labor force, the agency’s data showed earlier this month.

Compared with the 13.9 million Americans who were unemployed in October, that means that that there were about 4 people vying for every opening, up from about 1.8 when the recession began in December 2007, the report showed.

During the years leading up to the 18-month U.S. recession, millions of Americans sought out jobs in industries that are now struggling, according to economist Julia Coronado.

“A lot of people went into real estate, construction and finance and acquired a lot of skills that are now not as useful to the current economy,” Coronado, chief economist for North America at BNP Paribas in New York, said in an interview. “You just have a skills mismatch in this economy.”

Sixteen percent of small-business owners said they had openings that were difficult to fill in November, up 2 percentage points from the prior month, according to results of a survey issued yesterday by the National Federation of Independent Business. While the share is usually between 20 percent and 30 percent during economic expansions, last month’s reading was the highest since September 2008.

“There’s no doubt that employers need more hiring flexibility, but at the same time they continue to struggle to find talent with mission-critical skills,” said Jonas Prising, president of the Americas for Milwaukee-based Manpower Inc., the world’s second-largest provider of temporary workers. “The lack of demand for products and services and the ongoing skills mismatch profoundly impact hiring decisions.”

Manpower’s 2011 Talent Shortage Survey, issued in May, showed 52 percent of companies polled said they found it more difficult to find qualified help. That was up from 14 percent in 2010 and the highest percentage in the survey’s six-year history.

In addition to the displacement caused by the recession, the relationship between job openings and unemployment may have shifted because of the extension of jobless benefits or the detrimental effects of long-term unemployment, according to Zach Pandl, a senior economist at Goldman Sachs in New York. The change means the equilibrium level of joblessness, or the rate equated with steady inflation, has probably climbed to 6 percent from 5 percent before the economic slump, Pandl wrote in a Dec. 8 research report.

“The economy has been expanding moderately, notwithstanding some apparent slowing in global growth,” the Federal Open Market Committee said in a statement at the conclusion of its meeting Tuesday in Washington. “While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated.”

Concern over the economic outlook may also be affecting employment. The threat that the euro region may slide into recession, causing a global slowdown that would also limit U.S. growth, may be encouraging companies to hold back.

For example, the performance of the Chicago Board Options Exchange Volatility Index, also known as the VIX, which measures the cost of using options as insurance against declines in the S&P 500, also foreshadows payroll gains, Maki, a former Fed economist, said.

“When the VIX index is elevated, it means job growth is going to be more subdued,” he said. The gauge climbed as high as 48 in August and closed yesterday at 25.4. It averaged 16 in the five years leading up to the recession that started in December 2007.

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British Pupils could be forced to study history and geography until the age of 16 in curriculum shake-up

Pupils may be forced to study history and geography until they are 16 under plans for a shake-up of the national curriculum. An independent review ordered by Education Secretary Michael Gove called for the move yesterday as part of a wider drive to address concerns that England’s schools are falling behind the rest of the world.

A separate report yesterday warned of a sharp decline in history teaching, with 159 schools not entering a single pupil for a GCSE in the subject last year.

Recent studies have exposed a shocking ignorance about history among school-leavers. One found that half of all 18 to 24-year-olds did not know Nelson led the British to victory at the Battle of Trafalgar, with a similar proportion unaware that the Romans built Hadrian’s Wall.

Under the proposals, all pupils in England would be required to study history, geography, a foreign language, design and technology and the arts until at least 16, even if they are not planning to take a GCSE in them.

At present pupils can drop these subjects at 14. An expert panel appointed by Mr Gove found that the curriculum in England narrows earlier than in countries with more successful education systems, where pupils are required to study key subjects such as history for longer.

As a result, many youngsters are ‘deprived of access to powerful forms of knowledge and experience at a formative time in their lives’, the panel said.

A move to make these subjects compulsory would tie in with the Government’s new English Baccalaureate, awarded to pupils who gain at least five Cs at GCSE in English, maths, science, history or geography and a foreign language.

Tory MP Chris Skidmore, vice-chairman of the all-party history group, warned that the decline in history teaching had potentially far-reaching consequences.

Mr Skidmore, who will use a Commons debate today to call for history to be made compulsory, said: ‘At the moment we are the only country in Europe, apart from Albania, that allows children to finish history at 14. ‘There are dozens of schools where not a single pupil is studying history beyond that point. ‘Yet history is a subject that binds us as a nation. Having a common understanding of the past helps us to create a more coherent and tolerant society.’

Mr Skidmore said the subject was becoming increasingly confined to the most academic schools, particularly in the south.

Yesterday’s proposals are part of wider reforms designed to boost England’s competitiveness by improving the curriculum. Other suggestions include requiring children to learn their times tables at a younger age.

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New patriotic computer game for Australian schools

GRADE 3 students will be asked to play a patriotic computer game as part of a program to help them embrace what it means to be Australian.

The Aussie Clue Cracker game has been approved by the Australia Day Council and will be included in the history curriculum across the nation next year to help students better relate to Australian symbols.

As well as all of Australia's national symbols and days, students will solve questions to identify symbols such as the MCG, the Melbourne Cup, the Sydney Opera House, a didgeridoo and a Digger.

The education program designed by the Australia Day Council includes activities allowing students to design their own individual flags to show what best represents them.

National Australia Day Council chief executive officer Warren Pearson said the program was designed to reinforce the power of the symbols that all Australians could relate to.

"This is the bread and butter of being Australian," Mr Pearson said. "These are the things that resonate in our hearts and minds as Australians. "There is nothing in this list of symbols that excludes anybody, these are things we can celebrate - different aspects of our identity."

The program will be available for all schools and teachers to use in their lessons, but will not be made mandatory.

Similar to a web-based version of the popular board game Guess Who, grade 3 students will work through questions to identify the 24 national symbols, either as individuals or small groups on school computers, or as classes working on electronic whiteboards.

Mr Pearson said the Aussie Clue Cracker would be released next month, before Australia Day. It would be available for schools to use as part of their history lessons throughout the year and was relevant to all national days and events, he said.

The interactive lessons will incorporate sound bites, images and music to reinforce Aussie symbolism.

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