The New York Times did a fantastic service regarding raising the awareness of the demographic crisis by having a front-page article in its Sunday NY Times Magazine focussing on Europe’s problem with reduced fertility. You will probably have to register, but the link is (http://www.nytimes.com/2008/06/29/magazine/29birth-t.html?_r=1&oref=slogin&ref=ma).

The author is very articulate in describing many of the reasons for the birth dirth in Europe, and especially the Eastern and Southern parts of Europe. However, he does not recognize that the trend to lower fertility has been going on for two centuries. Napoleon worried about it. So did Teddy Roosevelt. Allan Greenspan told Congress that this has been going on for “at least 150 years.”

We must recognize this new demographic reality. The only reasonable solution is to create a paradigm shift regarding the potential of older workers.

The debate continues regarding whether there will eventually be major labor shortages in the U. S. With the big jump in the percent unemployed last week, many will probably be even more skeptical.

However, the argument must move beyond what is going to happen to the average worker. If the nation is going to maintain any semblance of the GDP growth of the past decade, government and business must do something to educate and motivate skilled workers.

Engineers are a frightening example. Many reports have been published about a shortage that already exists in many of the engineering disciplines in the U. S. (a recent example was Workforce Management’s repor that “Engineers, Machinists, Tradesmen in Short Supply” (link). Many executives and government specialists may be counting on importing that talent from abroad. Recent international reports will question that assumption.

The Financial Times reported on May 12, 2008 that “Germany, home of the engineer, faces acute skill shortage.” (Registration required). The FT reports that there are 95,000 unfilled posts in Germany.

 The International Herald Tribune reports on June 8, 2008 that “Japan is running out of engineers.” (Link).

Hmmmm. The three largest economies, and the three that were responsible for such a large percent of the technical innovations for several decades, are now running short of technical innovators.

Would anyone who does not think that we have a workforce crisis, and that we need to desperately work to keep our current technical people in the workforce, please detail why not in a response!

We have noted before that everyone should try to support legislators that have the foresight to help older workers that want to stay in the workforce. The NCOA Public Policy Update for June reported that Reps. Rahm Emanuel (D-IL) and Jim Ranstad (MN) have introduced a bill (H. R. 6036), the Lifelong Learning Accounts Act, that would allow workers to “create employer-matched, portable educational accounts that workers can use to finance their education and training” (per the NCOA).” This is an important change from current law, which only works for retraining directed to an individuals present  job. The latter is obviously not much help to those who lost their job because of category obsolescence or heavy competition in a category from foreign competitors.

 Details on the legislation can be located on Rep. Emanuel’s web site.

Now there’s a catchy title, especially today, as we worry about a 2008 recession meltdown. However, this is a book by Edward E. Gordon, president of Imperial Consulting Corporation in Chicago. And, while our current concerns are economy related, and we consider them cyclical, Gordon writes about a more terrifying meltdown.  His is systemic, and enduring. Gordon’s meltdown results from the demographic realities of an aging population, a massive lack of competence in the U.S. educational system, and a failure of government to deal with this scary scenario in any productive manner.

One of Gordon’s fundamental premises relates to the coming retirement of the 78 million Boomers. Peter Capelli of Wharton has called this ‘Gray2k.’ He believes that there will not be a crisis, but does so because he believes that Boomers will be paid/motivated to stay in/return to the workforce. Let’s hope so, because as Gordon points out, the 55+ workforce will have to have a rate of employment 25% greater than it is today “to maintain productivity.”

Gordon then points out that while this massive wave of retirement has started to arrive, the situation is compounded by a pathetic record for U.S. education and training. For a country that used to lead the world in education, it is sad to see the statistics that “… U.S. students ranked 15th out of 29 OECD countries in reading, and 24th out of 29 nations in mathematics.” He notes that only 2o% of the workers are qualified for 60% of the jobs (statistics from The Hudson Institute). This poor education/lack of training is likely to leave a majority of the U.S. workforce becoming “techno-peasants,” a great phrase by Gordon that paints a sad picture for the future of our youth.

Is the scenario all pessimistic? Not necessarily. Gordon points out several municipalities that have developed industry/government/education initiatives. An outstanding example is Fargo, ND. The Skills and Technology Training Center developed by the community has brought many companies into Fargo. Unemployment is 2%. Fargo has Microsofts’ 2nd biggest campus. Community cooperative efforts are needed and can work. Gordon details how federal efforts, on the other hand, produce little or nothing.

Relating to my earlier post on a potential ‘Global Competitive Advantage’ for the U.S., there is a section detailing a drastic problem with aging populations in Europe, Japan, and, yes, China (for those who have a hard time believing this, refer to a McKinsey Quarterly article just published on this subject [link]).  

Finally, Gordon wraps up with an appeal dear to this blog, to keep older workers on the job.

 The book is ‘The 2010 Meltdown: Solving the Impending Jobs Crisis,’ by Edward E. Gordon, published by Praeger.