We Have an Unemployment Crisis. Now What?

Twenty-one million people remain unemployed and are looking for work.
July 8, 2020

Chances are you know someone who has lost their job or was furloughed since mid-March when the economy started to shut down in order to slow the spread of COVID-19. It could be a co-worker, a friend or a relative. It might even be you. More than 47 million people have put in new claims for unemployment benefits over the past four months. That’s more than 1 in 4 people in the workforce.

Twenty-one million people remain unemployed and are looking for work. Nine million people are out of work but have given up because they don’t think they can find jobs. There are 21 million Americans working part-time because they can’t find full-time work.

The damage to the workforce has been staggering. Although businesses are starting to call back some workers or hire new workers, there still is a long road ahead to get us back to where we were at the start of 2020. Our path to economic recovery will not be a straight one. Getting people back to work will take collaboration from many groups — business leaders, civic leaders, educators, nonprofits and jobseekers.

The 128-month economic expansion — the longest in our country’s history — ended in February and all the job gains made in the 10 years since the Great Recession have been wiped out. We’re now in a new recession. 

Upskilling is key to rebuilding the workforce and, importantly, making certain unemployed workers are able to find good jobs and careers and a sense of purpose.

Workers Need to Adjust to the Changing Workplace
The need to upskill the workforce is not a new concept. Globalization, automation and an aging talent pool have been changing the workplace for decades. More and more jobs, across many industries, are requiring new technical and digital skills, and employers have been sounding the alarm that jobseekers with these key skills are in very short supply.

Upskilling has been a growing concern for business leaders throughout the world, a point most recently made in the 2020 Global CEO Survey conducted by business consulting firm PwC. Still, many believed they had more time to train their current employees to meet the evolving demands of their industries, or that there  eventually would be a strong pipeline of skilled workers waiting in the wings.

What was expected to happen over the next 10 to 20 years has, instead, happened in just a few months. The pandemic has upended that timeframe.

Here is why it all sped up. At the height of the stay-at-home, work-at-home orders in April, two-thirds of U.S. workers were working from home at least part-time, according to a Gartner business survey. This gave employers a chance to examine how they might make their businesses more productive, and what tools and skills are needed in their workplaces, whether they remain remote or they return to brick-and-mortar environments.

Millions who have found themselves out of work have lost more than financial security; they’ve lost a sense of purpose and dignity.

Joe Fuller, professor at Harvard Business School and co-director of the school’s Managing the Future of Work initiative, is in regular touch with U.S. business leaders, talking to them about their workforce needs. “[Businesses] are actually learning a lot about the processes that underlie their business and how they might be improved. It’s everything from understanding how information flows in their organization and where it gets constrained in normal times. I think they’re finding that there are numerous processes that can be streamlined,” Fuller said.

One key to streamlining is upgrading technology. “I’m hearing that companies are going to — across the board — just accelerate their digitalization,” Fuller said. “By that, I mean digitalization of the customer experience, digitalization of their work processes. And that’s going to shift the types of skills that both entry-level workers and incumbent white-collar workers are going to have to have to remain productive and frankly, to keep their jobs.”

This means there are going to be some bigger, longer-term changes in the workforce in the coming months as the country tries to restart the economic engine. Even jobs we don’t historically think of as being technologically oriented will be impacted, such as jobs in retail and hospitality. These industries will be looking for workers with tech and digital skills that enable them to multitask in new ways.

“I was talking to a major retailer and one of the things they are working on is making sure that their front-line staff in stores are actually qualified to do several jobs that were historically separate and discreet,” Fuller said. “That worker can help in the loading-dock area getting product correctly sorted, and on electronically auditing the stocking of the shelves to see where there are gaps, as well as operate a cash register. Historically, there have been checkout people; there have been logisticians; there have been the people who work on the shop floor. That worker who can do all three of those is more valuable to that employer.”

Upskilling is key to rebuilding the workforce and, importantly, making certain unemployed workers are able to find good jobs and careers, and a sense of purpose.

Traditionally, these have been lower-skilled, lower-paying jobs and often held by people in vulnerable and disadvantaged communities. According to analysis from the Center of Budget and Policy Priorities, “More than half of all jobs losses [from the pandemic] have come from the low-paid group of industries” in the service sectors, including retail, recreation and personal services. The Center also stated, “Jobs in low-paid industries are disproportionately filled by workers who are younger, poorer, less-educated, and especially women, noncitizens and people of color.”

According  to Mark Zandi, chief economist for Moody’s Analytics, the most skilled, most highly educated and best trained are the last to lose their jobs, hours or income and also are the first to be rehired. “They’re going to be the most productive [right now] and it makes most business sense for employers to hire those folks back. And I’m sure that’s going to be the case here,” he said.

Photo from Flickr

There Are Many Paths to Upskilling for Today’s Jobs
With advances in technology in the workplace, employees have had to become lifelong learners whether they know it or not. For many older workers, for example, there were no computers, no mobile phones, no Zoom calls when they started their careers. They adapted — learned on the job — as their jobs dictated. 

Now, though, changes in the workplace are happening so fast, there is a need to actively teach jobseekers — new and old — the newest skills needed to be competitive as hiring picks up again. This is no longer an option. Employers and hiring managers will be looking for workers of all ages who can make the most of the tools they have.

WorkingNation is a nonprofit which focuses on unemployment. Its President, Jane Oates, is a former assistant labor secretary with Barack Obama’s administration and has spent her career at the intersection of workforce development and education. In a recent online webinar for the brokerage and banking firm Oppenheimer, Oates stressed the need for skills-based learning, emphasizing that employers want to know what you know over how you learned it.

“The skills-based learning movement started pre-pandemic but has gained momentum with the economic slowdown. Employers are starting to [write] their own job descriptions based on skills, and not [academic] degrees. Before, we would see bachelor’s degree required. Now, you’re going to see something more like data analytics skills required or data visualization skills required.”

So how do we ensure jobseekers are armed with these skills that make them hirable? There are several pathways, and many of them are proven effective.

Let’s start with higher education. It is always going to be a time-honored pathway to work, but it is having to rethink how it approaches its students and their career and job needs. “There’s no industry that’s going to be more disrupted by all this than higher ed. The economics [high costs] of higher ed were increasingly problematic,” said Fuller. “It’s going to still be a major component of the workforce [development], but it is not going to be so dominant.”

Many universities and colleges already offer work-based learning opportunities such as internships, but they could expand to more fields of study to be more effective. “An innovative leader is going to be able to pivot very quickly and say, ‘Let’s look at where we should get skills-driven,’ ” Oates said. She added that industry-recognized credentials should be embedded in the learning and attainable by taking a few courses. “We need a country that has artists and performers and philosophers, but we also need to get people jobs. Adding credentials across majors gives people a better opportunity to find work.”

Community colleges play a key role in preparing workers for jobs in local communities. By aligning themselves with employers, they are creating training programs that help new and mid-career workers adapt to changing workforce demands.

California has been particularly focused on classroom learning combined with on-the-job training. There is a high demand for technically skilled workers in traditional industries such as construction and manufacturing, as well as growing industries such as health care, information technology, transportation and logistics and energy. Last year, the state’s Community College’s Board of Governors awarded $10 million in grants to establish new apprenticeship programs aimed at meeting these labor needs.

The grants will be used to fund programs at the college system’s 115 schools, the biggest system in the country. California presently has 94,000 registered apprentices with the goal of increasing that to 500,000 by 2029.

Apprenticeships give employers a first look at talent and also gives them clear pictures of what individuals can do. There are thousands of nonprofits and for-profit organizations offering upskilling to in-demand 21st-century skills through a variety of programs of varying length at varying costs. Many of them lead to credentials that also may signal to a hiring manager whether an applicant has the skills needed for the required job. 

Knowing which credentialing program is right for you can be daunting. In all, there are more than 738,000 unique work and education credentials, including diplomas, certificates, certifications, licenses and degrees of all types and levels in the U.S.

After the pandemic struck, organizations representing state leaders, including the National Governors Association, partnered with nonprofit Credential Engine to help jobseekers and students identify the most efficient and cost-effective pathways to secure the right skills and credentials that lead to good jobs. Credential Engine is free.

WorkingNation recently partnered with Atlanta Federal Reserve Bank’s Center for Workforce and Economic Opportunity and the Heldrich Center for Workforce Development at Rutgers University to examine pathways to an effective and equitable recovery for everyone who is unemployed.

Heldrich Center Director Carl Van Horn, an expert on workforce training, warned that the quality of the education training is extremely important. “One of the lessons from the Great Recession is there was a lot of what I would call over-consumption of not very good training, because people were desperate. Often, they grabbed, not a lifeboat, but maybe a life raft that sank. They got the wrong credential, and then what they’ve got is a worthless credential which they’ve spent a lot of time on, and then it doesn’t actually relate to a job.”

Oates added, “We’re going to have new jobs being developed, not only jobs that are growing, but new titles that didn’t exist before or we weren’t aware of before. So I hope that we really follow that lead and not just train people on how to do what they already did better, but look at real, in-demand opportunities and train them moving forward.”

The most skilled, most highly educated and best trained are the last to lose their jobs, hours or income.

These are very practical words of advice about how to help prepare unemployed workers to be competitive in the new workforce shaped by ever-changing technology and now, COVID-19. There is another reason to make certain the economy is working again: the psychological and spiritual toll of being unemployed.

Photo by Getty Images

A Job Is More Than a Paycheck
Most people need a job in order to feed their families, pay their rents or mortgages and pay other bills. Millions who have found themselves out of work have lost more than financial security; they’ve lost a sense of purpose and dignity.

“When you meet someone new, what is the first thing you ask them? Most likely the answer to that question is, ‘What do you do for a living?’ ” Rabbi David Wolpe of Sinai Temple in Los Angeles said. “It can be difficult to interact with someone when you have to answer the question [with] ‘I don’t have a job.’ 

“Somebody who isn’t ‘doing’ in the sense that the questioner expects them to be doing is immediately put in this place where they have to either make some excuse, or they have to allow themselves to feel the judgment of the person, even if the individual asking doesn’t feel it,” Wolpe said.

“In theory” he said, “all of our religions teach that a person and their being gives purpose, as opposed to their doing. You have to try and remind people of that. And yet, it’s almost impossible for any of us to separate how we feel about ourselves from the role we play in society.”

Wolpe concluded with a challenge. He said society needs to explore the “nature of employment and what it means to someone spiritually and psychologically and how we think of it from the outside. I think that that’s essential right now, when we’re facing the greatest unemployment crisis in American history.

“Part of what I think we need to start doing is to understand that, while work is integrally tied to one’s sense of self-worth, the shock we’re about to endure — that we have to take care of as a society — we’re going to have a psychological and spiritual fall that’s going to be even greater than the fall in employment numbers.”

Ramona Schindelheim is editor-in-chief at WorkingNation.

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