Talent Shortage Has a Huge Price Tag

On my own at eighteen, I self-funded my college education at both the undergraduate and graduate levels. I am a huge supporter of knowledge as an economic equalizer. As a former tenured university professor who later returned to industry and corporate training, I understand the challenge of teaching students who, through no fault of their own, lack basic skills in writing, math and logic. Therein lies the rub.

The United States spends much more per capita than other developed countries at the same time proficiency tests show American students lagging international peers in “the literacy, numeracy, and computer-age problem-solving skills needed to compete in the global labor market.” This is not good nor is it sustainable or desirable.

At the company level, employers are grappling with the real problem of too few people who can do the jobs they must fill. According to CNBC’s website, a Colorado construction firm, Oakwood Homes, jumped into action by creating its own school. Students learn to “saw, tile, drill, plaster and paint.” The CEO of this Berkshire Hathaway-owned company, Pat Hamill, laments the worsening worker shortage, saying “if we don’t do this, we’re not going to have a labor force to meet the needs of our industry.” I talked to a construction manager a few years old who told me his young workers could not convert measurements when asked to cut wood into certain size pieces.

From a financial perspective, the numbers are staggering. The National Center for Education Statistics reports that taxpayers funded $634 billion for public elementary and secondary schools during the 2013-2014 period or “$12,509 per public school student enrolled in the fall (in constant 2015-2016 dollars).” Inside Higher Ed tallies college and job training at $1.1 trillion.

While taxpayers are scratching their heads about oft anemic investment returns from the national education sector (recognizing that performance varies by region), venture capitalists are clapping with glee at opportunities to make money by solving existing woes. In 2015, Bertelsmann SE & Co announced its $230 million investment in a learning technology company called HotChalk. EdSurge Research chronicles “edtech” funding of K-12 focused start-ups since 2010 of $2 billion.

In an ideal world, young people graduate with adequate skills to land a job and progress towards eventual financial independence. To the extent that improvement is needed (just look at the data), let’s hope that outside investors and clever entrepreneurs can help drive reform with their contributions and independent insights.

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