The Big Money: Maybe it's job retraining that needs to be retooled

By James Ledbetter
Sunday, August 1, 2010; G03

Health-care reform or no health-care reform, we don't have enough doctors in this country. A Harvard economist, writing in the New York Times Magazine, declared: "Today, the shortage of doctors in the United States is worse than at any time in the last fifty years. This is not to say that the total number of doctors has decreased; actually, the total is now higher than ever. I speak of the increased gap between our doctors and our total population."

It's an odd finding to contemplate -- that at a time of massive unemployment, a critical, well-paying field such as medicine should go wanting for workers. Perhaps odder still: The words cited above were written when the country was coming out of a recession and the economy was actually growing. I'm not, however, referring to 2010, but to 1950.

The shortage of doctors -- and nurses, engineers and other professionals -- is a persistent perennial of the American economy, which seems incongruous with high unemployment numbers. If we've had a shortage of doctors since 1950 or 1900 or whenever, then why don't more unemployed people take up the stethoscope?

These issues were hinted at in a recent Peter Goodman article in the New York Times on job retraining and an earlier article in USA Today. Both papers, though, overlooked some broader points that make the inadequacy more urgent -- and more confounding.

The basic problem: Some of the stubbornly high unemployment America faces today -- 14.6 million officially unemployed, with millions more jobless who don't meet the technical definition -- is cyclical, meaning that hard times wiped out jobs that will presumably be restored when conditions improve. But much of it is also structural, so there is a dramatic mismatch between the kinds of jobs that millions of Americans have historically held and the kinds of jobs that we generate now and will generate in the future.

Liberals (and others) have traditionally addressed this problem by advocating worker retraining. Not surprisingly, it is a cornerstone of the Obama administration's jobs policy. In 2009, the Department of Labor spent a little more than $4 billion on adult workplace training; about one-fifth of that came from the stimulus package. Millions of Americans are undergoing such training every year; those numbers are supplemented by state-run programs such as Michigan's "No Worker Left Behind."

And what are workers being retrained to do? It seems that a significant portion of the money is aligned with President Obama's political goals, including "green jobs" and health-care industry jobs. But the Times article makes clear that current job retraining is inadequate, and hints that it may never really work.

So why doesn't the training produce its intended results? The Times grabbed the easy answer: "Because there are no jobs." That might, indeed, be the major reason, but before endorsing it, consider that it contradicts many things that we think we know. According to the U.S. Bureau of Labor Statistics, the job category that will grow the most over the next decade is nursing; nearly 600,000 new registered nurse positions will be created by 2018, increasing the size of the potential nursing workforce by 22 percent.

Yet it is hard to see how America will be able to fill those jobs, since apparently we can't fill the nursing jobs we have now. Various health-care associations estimate that there are 135,000 nursing vacancies today.

Experts place the blame for this shortage on the burdens created by the aging baby-boom generation, but that is only part of the story. As indicated in the 1950 article, America has had a shortage of nurses for a half-century or more. At the same time, USA Today last month cited a "rare glut of nurses" as a reason that recent nursing grads can't find work. Is it possible to have a shortage and a glut at the same time?

I'm unable to locate a single explanation for why worker training isn't more effective, but here are some of the theories out there:

The shortages aren't real. When medical organizations speak of shortages, they are measuring current workforce levels against a theoretical number per capita. Just because health professionals say they need more employees doesn't mean that the market has the capacity to support them. This would explain why we appear to have both shortages and gluts, and why retrained workers don't always find positions.

Unemployed people aren't capable enough to be retrained. With approximately 17 million people out of work, this is true for a fraction. Some conservative observers have argued that nearly all unemployment can be blamed on personal shortcomings. This misanthropic theory may provide emotional satisfaction for some, but it's clearly too unverifiable to have real analytical value.

There's a geography gap. Economists have noted that while capital and physical goods are easily moved from stagnant to productive places, people are much less so. Americans relocate from town to town more readily than most nationalities. But in the short term, it's not easy for unemployed people to move to where jobs might be.

There's a gender gap. Rationally, any well-paying job should be attractive to any needy worker. But reality is usually messier. As noted above, the nation has for decades suffered from a shortage of nurses. Maybe today plenty of young men are willing to enter nursing as a career. But do men in their 40s and 50s really want to put in the training to switch to a historically female job? And if gender issues keep otherwise qualified people from taking well-paying jobs, it may be a two-way street: Engineering, IT and software development are stubbornly male-dominated fields.

Our training is really lousy. This seems like an obvious culprit, except that all the way down the line, the incentives appear intact. Governments and business leaders want unemployment to go down; community colleges want federal grants to provide workplace training; companies want skilled employees; and unemployed workers want jobs that pay well. So the problem shouldn't be an inability to teach skills.

But maybe it is, and if so, that means that our decades-long reliance on worker retraining is misplaced. And yet it seems irresponsible to give up on the idea of teaching adults new skills. Perhaps we need a thorough revamping of what we are teaching. But who will retrain the retrainers?

-- The Big Money

Ledbetter is editor of The Big Money and of "The Great Depression: A Diary."

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