August 19, 2011

Improving Employability Will Help Jobs Problem

Maurice P. McTigue

Vice President, Outreach

As we await President Obama's job creation proposals after Labor Day, there is much debate going on about what the government can do for the unemployed in the short term. Some worry that the United States is struggling from structural unemployment, and according to Mercatus scholar Maurice McTigue we’re partially there, but not doing everything we can to combat our problem.

“We should focus on improving the employability of the unemployed, not creating jobs for them,” said McTigue. “We can create facilities to bring employees and employers together during job searches, help with skill building by offering retraining to help people get reestablished, and offer incentives to employer to hire someone that has been out of work for more than 6 months, like paying a subsidy on an employee’s wages until he or she becomes profitable for the employer and then removing the subsidy.”

It takes time to evolve from an Industrial Revolution economy to a high-tech 21st Century economy, said McTigue. Workers from a dying industry, like textiles or some manufacturing need to upgrade their skills to something more marketable or they’ll get left behind.

“Some jobs are not going to be recreated again, because the gradual sophistication of a growing economy, requires more highly skilled workers, but fewer of them,” he said. “It means higher wages, but employers are also using technology to cover the gap of not employing another person.”