[vc_row][vc_column][vc_column_text]Social unrest in recent weeks represents not only a racial divide, but a chain reaction to the financial oppression that constrains our economic growth. As business leaders, we play a role in rebuilding the U.S. economy and developing a workforce that will propel businesses forward.

Consumer spending represents around 70% of GDP. According to CNBC Make It, 78% of Americans were living paycheck to paycheck before COVID-19. Our economy cannot recover if unemployment and underemployment constrain consumerism.

Changes sparked by the pandemic will bring about a reallocation of labor. Government solutions are zero sum—for a subsidy to support a worker, someone has to pay for it. Solutions we could deliver as a business community can benefit all of society.

As economist and New York Times op-ed columnist Paul Krugman points out, there are three fundamental contributors to wage inequality:

  1. Over the last 30 years, our economy has become so productive that people with some wealth are able to multiply their gains through compounding in a marketplace that generates 7-8% returns. The rich keep getting richer. This is evidenced by the fact that wealth inequality is growing faster than income inequality.
  2. During this boom, that wealth has been passed from one generation to the next.
  3. Technology has displaced the least skilled workers. Automation and offshore manufacturing eliminated jobs at the bottom of the labor pool, which is a major contributor to underemployment and the gig economy. Unions have lost their teeth, and supply and demand have reset labor rates. The underemployed resort to driving for Uber and becoming social media freelancers. The deflationary effects of COVID-19 will only exacerbate this situation.

In a list of complex problems for our nation to solve, this could be the most pervasive—and an instigator of other issues from healthcare coverage to our swelling national debt. We are at a tipping point where new technologies such as artificial intelligence, big data and super-computing will worsen the problem unless we seize the day.

I have been involved in various economic development and workforce readiness programs in my local community throughout the years. And while California is better than most at providing programs, I’ve seen first-hand that public and private sectors do not collaborate to develop our workforce.

Full employment in recent years has conditioned employers to think about filling open roles today. Training investment was in rapid decline before our economy crashed and burned. How much do we think companies will invest in their employees when their revenues are in the tank?

We own this problem, and we can solve it. Here are some practical solutions:

Train the unskilled

Business leaders need to work actively within their communities to support private-public partnerships with government agencies, workforce readiness programs, community colleges and universities to develop skilled labor. Our economy will always have access to minimum-wage workers and software developers. Our failing is in the middle—and as baby boomers retire, a lack of mid-management and skilled workers will further paralyze the economy.

I am calling on all business owners to become involved in training the underemployed—if not for altruistic reasons, then for self-preservation. There is a movement for funding programs in disadvantaged communities, and some of this money must be set aside for workforce training. We can take part in these efforts to ensure we have workers five to ten years from now.

Provide mentorship

The greatest gift a businessperson can give is not money, but time. We should all be looking for opportunities to coach other people, including those looking for a brighter future. We can also provide a venue for our managers to do the same. We learn the most by teaching.

Invest your PPP money wisely

As companies are receiving subsidies through the Payroll Protection Program, it is an excellent time to provide employee cross-training, especially technical self-study coursework.

Be an agent for change

We can call on others—trade associations, politicians, peer groups and local business groups to invest in America through similar training initiatives. Training comes down to investment, and it will be the membership of such organizations that drives these initiatives.

It’s time for our nation to reinvent itself, as we have done before. In this new America, low income workers have access to the tools they need to compete. Instead of being replaced by technology, they are benefactors of it. We can lead the world in information systems, data security, AI and the technology that will ensure our ongoing prosperity.

America cannot reach its potential unless it brings lower income workers along for the ride.

Resources:

My Skills, My Future

American Job Center Finder

SHRM: Workforce Readiness Resources

Boys & Girls Clubs of America: Workforce Readiness

IndustryWeek: How to Design a Workforce Readiness Program

360 Training: Business Skills

CareerOneStop: Skills and training

Management Concepts Professional Skills Certificate Program

U.S. Department of Labor’s Employment and Training Administration

Adult Training Programs

Disability Online

Trade Adjustment Assistance (TAA) Program[/vc_column_text][/vc_column][/vc_row]