Trump plan to retrain workers is needed, as are pay raises
One of the toughest challenges for any boss is training workers on new technologies to boost productivity, and sometimes, sadly, watching an older employee’s star fade because he or she can’t keep up.
We all know someone who was good at a job before computers demanded a new set of skills. Whether it is a laserguided lathe or customer relations management software, computer applications are becoming more demanding as machines take on more complex tasks.
The changing workplace has driven up the percentage of older workers dropping out of the workforce before retirement age. The only way to spur faster economic growth is to recruit and re-train them, according to the White House’s Council of Economic Advisers.
President Donald Trump promised on the campaign trail to put Americans back to work, and his executive order last
week to create the National Council for the American Worker is a step in the right direction. The council brings together Cabinet secretaries, corporate executives and education leaders to help Americans return to the continually evolving workplace.
More than 15 major companies and associations have promised to support Trump’s efforts, including Walmart, General Motors, Lockheed Martin, IBM and FedEx. The companies pledged to expand apprenticeships and boost job training for 3.8 million workers over the next five years. But it will not be easy.
“American workers may have incentives to pursue retraining, but the information gap between workers, education institutions and industry job creators remains a major hurdle,” the White House council concluded in a recent study. “The federal government has a unique role to play by re-examining current financial assistance spending and redesigning programs to better serve anticipated needs.”
More than 85 percent of government and private spending on workforce development is focused on people 25 or younger, according to the council’s research. By comparison, public and private expenditures on workers over 40 are minimal and even less for people with only high school diplomas. These are the people who have stopped looking for work.
Yet we need them. Last month, the number of job openings reached 6.7 million, while only 6.3 million people were actively seeking work.
“Employment gains must … come from working-age Americans returning to employment from the sidelines,” the council said.
Educators face a difficult time, though, retraining adults from manual labor positions to jobs requiring abstract thinking, according to researchers at MIT. People who spent years developing motor skills are no less intelligent; they simply did not spend their lives imagining cyberspace.
Adult education programs must carefully match students with skills that make sense and guarantee employment.
Congress has habitually underfunded such federal programs that retrain workers displaced by technology or factory relocations overseas. Trump’s new executive order will hopefully address those shortfalls and encourage private companies to offer educational opportunities instead of layoffs.
Training and opportunity, though, are not the only things keeping Americans out of the workforce. Wages have been stagnant for decades. Two-thirds of American jobs pay less than $20 an hour, and average hourly wages for non-management workers fell 0.2 percent from June 2017 to June 2018, according to the Bureau of Labor Statistics.
The American worker is losing out to the American stockholder. Labor’s share of national income, adjusted for productivity, has dropped from 64.5 percent in 1973 to only 56.8 percent in 2017, according to the Bureau of Labor Statistics. Corporate profits have risen from an average of 10 percent a year before 2007 to above 13 percent since 2009.
Trump and the Republican-led Congress gave corporations an even more significant boost this year by slashing tax rates and leaving most loopholes in place. Supporters promised that businesses would increase investments, hire more workers and boost wages. Businesses have instead increased dividends or bought back stock, driving up share prices to benefit investors.
Trump gave voice to millions of people frustrated with the current global economy. Many have suffered significant economic setbacks brought on by automation, new technology or factories moving overseas. Their pain is real, and they deserve a compassionate government willing to offer a helping hand.
Trump’s “Pledge to America’s Workers” to develop a strategy for training and retraining the workers needed across high-demand industries is a welcome start. But until American workers get the raises they richly deserve, they will not rejoin the workforce in sufficient numbers. Discouraged workers act as a cap on America’s economic growth, and we ignore them at our own expense.