Job Creation continued

What about Targeting Specific Jobs?

When the government targets specific jobs by creating the demand for them, we have a short-lived fix with potentially long-lived inflation. This puts us much in the same situation as with stimulus and targeted-industry programs. However, if private industry were able to create jobs and government helped them find people to fill them, we might have a solution to at least part of our problem. Susan Cowden, administrator, Workforce Development Division, Tennessee Department of Labor & Workforce Development, recently stated that "over 1,000 information technology jobs in the Nashville area" are vacant because qualified applicants are not available. In basic economic terms, this is structural unemployment, whereby workers' skills do not match job requirements. In structural, as opposed to cyclical, unemployment, government policies such as stimulus programs and low interest rates have little effect, and, as noted earlier, can lead to inflation. In targeting specific jobs, the government helps by offering training to close the gap between what an unemployed or underemployed worker can do and what is needed in the job market. Using IT skills as a surrogate for the bigger picture, I have extracted the following information from the Technology Hiring Trends Report [Nashville Technology Council].

• 1,044 technology related positions were open in middle Tennessee, up from the third quarter of 2011 (+12%). The figure for the State of Tennessee is 1,410.
• The number of advertised positions in middle Tennessee is the highest since 2001 with the exception of 2007, immediately before the economic downturn.
• Healthcare continues to lead all industry sectors with education and accounting rounding out the top five.

Training centers and technical schools provide workers with the skills needed to close this gap not only in IT but also in skills needed in building trades, logistics, and many other areas. Governmental funding is also available at the existing-job level to incentivize employers to train existing employees using on-the-job training (OJT) techniques. Because training facilities and personnel are already in place, the cost of adding value is less than starting a new program that targets an entire industry and especially less than not targeting anything at all. This approach of targeting specific jobs will also be the best way to help returning veterans re-enter the workforce.

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* David Hayes, EA, CFP, is an adjunct instructor in the Department of Economics and Finance at Middle Tennessee State University and serves on the Tennessee Workforce Development Board.

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If private industry were able to create jobs and government helped them find people to fill them, we might have a solution to at least part of our problem.