The positive side of the labor-shortage problem - editorial

Nation's Business, Feb, 1988

The Positive Side Of The Labor-Shortage Problem

The most critical period for new enterprises often comes in the transition from uncertain start-up to established businesses. The founders realize that they can no longer do everything themselves but must begin achieving their goals through other people. The availability of the right type of employees at the right time thus becomes an important factor in how fast the business grows or, in some cases, whether it grows at all. In established businesses, the challenge is to recruit and retain the type of employees needed to maintain and build upon success.

For those reasons, the emerging labor shortage described in this month's cover story (Page 16) represents a strong challenge to many small businesses. As the article points out, demographic trends are reducing the pool of the type of employees those businesses need. But there is a positive side: Actions needed to cope with the labor shortage will contribute to the overall health of American society.

One of the necessary corrective actions, for example, is improving the education system. Today's young people must be equipped from jobs in a marketplace that has changed drastically since their parents entered the work force. Mathematical, scientific, business and communications skills will be increasingly important, even for many entry-level jobs. And manual-labor jobs that have been the last resort for young people without education or skills will continue to decline. Both the public and private sectors are becoming more aware that if they expect the schools to train students in those skills, they must provide the support necessary to achieve those goals.

Resolving labor shortages should also direct the nation's attention to an often-neglected resource--the experience and abilities of older citizens. Many businesses have already found highly capable and dedicated workers in their ranks. Indeed, surveys have shown that productivity is often much higher and absenteeism much lower among elderly workers than among their younger colleagues. Greater reliance on older workers will require a re-examination of attitudes toward them and their potential for continuing contributions to the economy.

Steps should also be taken to utilize what has been another neglected resource --the excessive number of young people outside the economic mainstream. Most dropped out of the education system before finishing high school. Many lack basic reading and writing skills. Some companies have launched programs to prepare those individuals for jobs in today's workplace. Schools are putting increased emphasis on the special needs of these students. The number and extent of these programs will be increased substantially over the next few years, and they will have a double impact. They will be highly significant for only in easing the labor shortage but also in improving the overall health of American society. A brief reflection on the social costs of a functionally illiterate school dropout vs. the contributions of an employed youth with potential for advancement will make the importance of these programs evident.

The emerging labor shortage is disruptive, frustrating and even threatening for many small-business employers. But it is also applying pressure for the solution of longstanding problems. Business, as well as the overall society, will be better off for those solutions.