STEMulus Package

The April 2016 jobs report came out today. It indicates that U.S. employers added 160,000 jobs this past month, the lowest rate in 7 months as economic growth is moderating. President Obama touts this as a success story, declaring that he has added 14 million jobs since taking office, 3rd-most among U.S. Presidents (behind FDR and Reagan). However, the real story is one level deeper.

While President Obama's figures are accurate, the one statistic that is conspicuously absent is the quality of the jobs that are being added. If you dig a little deeper, you'll see that the jobs lost during the recession were mostly middle-class manufacturing jobs. On the other hand, most of the jobs added since have been entry-level and temporary service-sector jobs. This helps explain why while jobs are being added, wage growth has been stagnant.

This is a bad deal. Replacing good jobs with poor ones isn't going to do the economy much good in the long run. The good news is that there are plenty of good jobs available in the U.S. The bad news is that we have a skills deficit that is preventing us from filling those jobs, because unlike the jobs lost during the recession, these require education and training.

Case in point, it is projected that the U.S. will add over 1.5 million positions for Software Engineers over the next 10 years. However, the U.S. is only graduating about 40,000 Software Engineers per year. Do the math and you see that at that rate, we'll be short about 1.1 million Software Engineers. It goes without saying that these are good, lucrative jobs; jobs that are ripe for the filling but that we simply don't have trained people to take.

The problem is that we have a skills management issue. The jobs of the 21st century economy are here and they're good ones, but they require skills that our people aren't getting. Only 8% of all U.S. college students are in STEM (Science, Technology, Engineering, and Math) programs. By comparison, in China, where the educational system does much more to emphasize careers, about 30% of all college students are studying STEM. If we don't have enough Americans to fill these STEM positions, guess where they're going to go?

At the same time we're facing this problem, our political leaders have chosen to fight over - wait for it - raising the minimum wage. Seriously? Compared to the real employment problem we're facing, the minimum wage is little more than a distractionary issue. Instead, we desperately need to focus on giving our people the skills and training they need to succeed in today's economy.

In a nutshell, our problem is that we have a 20th century workforce and a 21st century economy. Fixing this begins with education, where we need to emphasize STEM as a cornerstone for success in today's world; there's no reason why a developing nation should be graduating more engineers and scientists than the U.S. We already have the most advanced and capable higher education system in the world; if only we can use it in conjunction with the private sector to give students the skills they need to be successful today, sub-2% economic growth, wage stagnation, and underemployment will quickly become the issues of yesterday.