Reallocation & Retraining

written by CHRC
4 · 28 · 21

Despite the headache caused by all of the labor market reading done for our last post, we’ve persevered.  

Some Chicago economists have had their thinking caps on, and their musings are worth sharing. They are asking the right questions as we contemplate labor markets and human capital post-pandemic.  

The Chicago Fed’s April paper focused on this:  Why didn’t more people from affected industries move over to industries that were NOT affected by the pandemic? “One sign that Covid might have increased the need for labor reallocation is the fact that even while unemployment rose substantially, firms reported an increase in job openings, the opposite of what normally happens in a recession.”

That article raised a nagging question:  Do workers lack the ability to retrain? The resources? Or the incentives?

One of Chicago’s most wry economists, Carl Tannenbaum, addresses the risks if people do NOT retrain. Solving these problems will not be easy, but he rightly points out, failing to address them will lead to even larger problems along geo-political lines. His piece’s topic sentence sums it up:  “Renewing human capital is as important as renewing physical capital.”

Solutions depend on cooperation and innovation. Education needs to orient to life-long upskilling, supporting a different concept of education before 18 and after 18, with government support. Companies must put their money where their mouth was when they signed the Business Roundtable document in 2019. If they create that ecosystem, they will retain workers for far longer—hiring based on competencies for life-long learning—and partnering with employees committed to constant up-skilling.

Related Posts

Hidden Talents

Hidden Talents

Checking twitter for some of our favorite labor economists, the app declared that Jerry Orbach was trending. Jerry Orbach? Hasn’t he been gone for several years? But funny enough, I had just been talking about how much I loved his portrayal of Lenny Briscoe on “Law...

Musings on a Monarch

Musings on a Monarch

In the autumn of 1984 when I arrived in England to begin an academic year there, I wasn’t thinking so much about Queen Elizabeth II. There to study Tudor and Stuart History, I had Elizabeth I on my mind. What a strong, and amazing monarch she was! As an American, the...

Labor Day Contemplation

Labor Day Contemplation

Labor Day evokes many images.  For some of us, it’s a time to savor the last days at the beach, perhaps with a good read? Most of us hope to find meaning and purpose in our jobs.  In this era of The Great Reassessment, maybe this is the Labor Day to reconsider our own...

Comments

0 Comments