Thanks to the economic trials of recent years, millions of jobs are gone forever, creating a lost generation of older workers who need more education to land new jobs. Guest columnist Alan Davis writes about what the Washington Legislature can do, beyond Western Governors' University-Washington.
WITH 14 million Americans out of work and the monthly statistics indicating a paltry, almost nonexistent, pace of job restoration, it’s time that politicians in Washington, D.C., quit their charade and tell the truth: Millions of jobs that have disappeared are gone forever.
In fact, the harshest part of that truth is that jobless workers in their 40s and 50s have become a lost generation with virtually no hope of satisfactory re-employment without further education or retraining. They deserve to be told that honestly so they can face up to the need for change.
The tragedy of the final closure of the Nalley’s plant in Tacoma is only the most recent dramatic chapter in the continuing story of jobs disappearing forever.
The reality is that new jobs likely will emerge in this country but they won’t be filled with old skills. Thus many of those who lost jobs over the past three years will remain a generation lost in time because their skills won’t permit them to fill those new jobs.
In our company’s work with companies experiencing economic difficulty, one common factor has stood out: Management, boards or owners of the businesses did not recognize that the change in the economy was a deep and fundamental shift rather than a short, temporary glitch.
In case after case, this denial allowed them to avoid making fundamental changes in their businesses, causing them to ultimately run out of both cash and the ability to borrow or obtain investment.
It’s the same with the job market. Denying the fundamental changes in the skill sets required for the jobs where there is demand will cause workers to avoid making changes fast enough to prevent their personal economic situation from becoming overwhelming.
Many of the “old” jobs that elected officials contend will eventually come back are middle-class manufacturing jobs that have been sent offshore in this global economy. Those jobs created a solid middle class because they paid solid hourly wages and good benefits. But even with wages rising in places like China and India, the costs of manufacturing offshore are substantially less than in the United States.
Given that we live in a global economy and marketplace, companies must “produce” in the most efficient manner or not be able to compete in the global market. Whether through lower wages offshore or through the use of technology and automation here at home, it makes no economic sense for these jobs to return. So they won’t, and all but the most obtuse of politicians know that.
With our focus on creating entrepreneurial opportunity, we often forget that it is the working middle class that creates a major part of the revenue base of this country. Startups often lose money, sometimes for years. As such, they contribute nothing to the tax base, and even when becoming profitable, have large tax-loss carryforwards.
While we certainly need these startup companies for the future, we also need to make certain that our current base of taxpaying workers is productive and generating revenue for state and local governments today. Failure to do so will produce a permanent underclass at just the time in their lives when they should be the most experienced and productive.
Some of those displaced workers may be able to go back to college, but many cannot because they need to work to support a family. Online colleges allow such students to work on their own time rather than tying them to the schedule of a brick-and-mortar facility.
While online education may be the way of the future, current offerings have limitations. Most online institutions are public, for-profit entities and as such focus on return to shareholders as opposed to being concerned first with the needs of students. Many have a fixed curriculum and do not make allowances for hard-earned competencies held by older, more experienced students. And some institutions are not fully accredited.
It’s that reality of education and training for those workers too old or too distant to return to higher-education classrooms that Western Governor’s University-Washington, approved by the 2011 Legislature to have its credits recognized by the state, is designed to address.
But there are key funding solutions that a small amount of political will could bring to bear:
• Allowing displaced workers to collect unemployment while carrying a full academic load, instead of searching for a job;
• State and local tax credits for employers that hire displaced workers and provide private student loans or educational reimbursement;
• And grants, much like Pell grants, but focused on displaced workers.
We don’t need to wait for the federal government; we can begin to act, right here in Washington.
Alan Davis is a principal in Revitalization Partners, a Seattle-based company that helps turn around distressed companies. He is a member of the board of the new WGU-Washington.