Lots of Jobs – Where are the Workers?

The South Texas region has an unemployment rate of somewhere between 5.2% and 5.8%, depending on exactly where you are located. Employment in certain highly desirable professional technology occupations is officially over 100%.

Finding entry-level employees in South Texas is challenging. A few local anecdotes:

• A home care agency, after working for years to develop referral relationships with discharge planners, is having to decline new cases for lack of staff. A week of interviewing and background checks culminated in offers to five new workers, all to start the following day. None showed up for orientation.
• A subcontractor was discharged from a large construction project for falling behind schedule. He was unable to find sufficient employees to man the job. The chosen successor was terminated for the same reason after two weeks.
• A manufacturer in the Eagle-Ford (petroleum producing) area receives a report each Monday morning on his no-show employees. If they call the employee’s home and get no answer, they simply assume he found another job.
• A technology company, after conducting a salary survey, gives employees up to a 35% raise to bring them all up to 100% of the industry wage range. Nonetheless, their rapid growth is forcing them to open offices in other cities just to access additional labor pools. They have given up on getting H1B visas for Master’s degreed foreigners to work in this country.

With all this opportunity, why isn’t Texas seeing even more migration from the states that still suffer double-digit unemployment?

I had a recent conversation with an official of the Federal Reserve that shed some light on the problem.  According to his analysis, we have all-time high unemployment levels nationally among recent college graduates, while simultaneously tracking a record number of help wanted ads. He has concluded that we are training a workforce that isn’t suited for the jobs being created.

Last year Texas universities bestowed just over 6,000 bachelor’s degrees in psychology. The statewide total number of want ads requiring a BA in Psychology during that year? Four. In the meantime, the average age of a Master plumber or electrician is now in the late 50’s, and is creeping up every year.

In an educational system that rates success by the percentage of students sent on to college, we have moved vocational education to community colleges to keep the statistics shiny. I don’t underestimate the educational requirements of a technical career, but no one really thinks that it requires 14 years of formal schooling to become a trade apprentice or a machine operator. Kids who need to support themselves are being graduated from high school qualified only to wait tables or punch a cash register, when many could be taught skills that would let them be self-supporting. (A current estimate is that about one-third of those under thirty are still living with their parents.)

Eventually some of those psychology majors will take jobs as apprentice electricians. The shame of it all is that they will have borrowed tens of thousands of dollars to pay for an education they won’t use, and the economy will continue to lose their productivity until they figure that out.

My new book, Hunting in a Farmer’s World: Celebrating the Mind of an  Entrepreneur, is now available on Amazon in paperback, hardcover and Kindle. It is an ownership book, not a management book, and is illustrated with the stories of real entrepreneurs who faced challenges that apply to us all.