Can we solve our labor problems?

Can we solve our labor problems?

Our region, despite some outward appearances, has some very troubling employment statistics The unemployment rate is modest (2.9%). The number of unfilled positions is relatively high (10,000 openings). More disturbing, the Labor Participation Rate is abysmally low (53.9% in Sullivan County).

The Labor Participation Rate is a standardized measure of the number of people who have or are seeking a job versus the total potential workforce This labor pool includes people who are not available (e.g., stay at home mothers) but it also represents individuals who wanted to work but have stopped looking. Then, there is a segment that simply do not want to work.

Our problem is measured in relative terms. The state and national figures are approximately 61% participation. If our region had a similar rate, there would be more than 30,000 additional people looking for work. If this were the case, our vacancies would likely be filled. We would have a significantly higher unemployment rate (which would also imply a supply of potential employees for companies we recruit to the area).

Too many people have dropped out of our job market. The fundamental questions are, “Why?” and “How do we get them back?”

The “why” is multifaceted. Extended government subsidies are certainly a disincentive to work.

Further, there is a core group of “discouraged workers” who believed that no jobs were available for them. This indicates a mismatch between skills and job requirements. Some are older individuals that never learned the requirements of the modern workplace or people who emerged from our education systems unprepared for the world of business.

Others find working conditions unsatisfactory (e.g., poor compensation or difficult work environment). This highlights the breakdown of the social contract between employers and employees. Business has lost its perspective. When quarterly earnings drive operations, people become little more than another cog in the machine…disposable.

This leads to despondency and feelings of hopelessness. To compensate, a significant group turns to drugs or alcohol, which fuels the abuse problem in our region.

Given this “messy” and complex interaction of economic and social factors, what can we do to improve our situation, to make us more competitive as a region? Unfortunately, there is little we can do to affect Federal government policies. However, several approaches (many of which we are trying to accomplish) apply, including:

• Mitigating the epidemic of drug dependency (particularly, opioids) through cessation and rehab programs

• More job training and a greater focus on vocational education for non-college youths.
• Disability insurance reform

Two other actions may have a significant effect. Most of what has passed for economic development locally has been recruiting low-wage retail, food service and hospitality jobs. Our local governments should stop the subsidies (tax breaks) to induce low-wage businesses.

We must also encourage businesses to treat employees differently. Give employers more inducement to hire those now out of the market. This includes tax incentives to make hiring and training underskilled workers more profitable, especially for small businesses.

When “wages” are not the draw, what is the compelling reason to return to the workforces? Affirmation is key. There will always be jobs on the lower end of the pay scale. However, those workers should be made to feel that they are indispensable members of team.

How do we do this? First, through individual action. I saw a sign at a fast-food joint, “Please be kind to our employees. They actually showed up for work.” Yes, they did and yes, we should.

Businesses must become a “tribe” in which everyone has a function, and that job is recognized as a component of the success of the whole. Senior management must take and active role in understanding what employees do and how it fits in the functioning of the company. The military had a saying, “The unit does well what the commander checks.” “Showing the Flag” (senior leaders being seen with the troops) is important. What worker does not want to explain to the boss what they are doing?

Certainly, financial renumeration is important, but there are other ways to improve morale. Recognizing superior performance is important. Also, understand that uncertainty creates anxiety. Find ways to remind employees that success breeds job security; and that success is up to them. It gives them a vested interest in the performance of the business.

Ultimately, we must recognize that it is “us” as much as it is “them.” If we treat people as if they have little value, we should expect that they will respond in kind. If we cannot give people a belief in a better future, why should we be surprised that they drop out or turn to drug abuse.

The only way we can induce people back into the “game” is to ensure they think they can “win.”