Thursday, June 23, 2016

With 2Q Economic Job Bounce Back Will There be a Future Labor Shortage?

U.S. jobless claims declined to 43 year low, manufacturing data rises, and an overall increasing trend in single family home purchases. Good news, good news, and more good news! With an unemployment rate of 4.7% and an unemployment drop of 18,000 to 259,000 could we soon find ourselves with a qualified labor shortage.

It is important to distinguish qualified labor shortage from labor shortage. The former is more likely while the later is more of a remote possibility. Qualified labor means people who are able to take on skilled jobs in a growing market. They will need to be educated and trained.

The other side of the economic information is that manufacturing data is rising which means more hiring is a good possibility in the near future. We may actually see a situation where qualified labor will become more expensive and wages will rise naturally based on market forces. 

It is also possible that more expenditures in training will be seen in companies that must fill the skills gap. They will hire people with some of the experience and skills they need and then focus on creating general skills that will help them fulfill their needs. 

As a nation this may be a good time to consider our higher education approaches and the need to get qualified labor out into the market. Offering alternative sources of education with schools that provide focused educational training on key skills that will be well received in the market and capitalize on changing trends in job openings.

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