Fixing Unemployment: Part 1
Lately, I’ve been thinking a lot about the state of unemployment and underemployment in the US. Figures last week showed that 12.7 million Americans are unemployed and many more are jobless (i.e. out of work but not seeking employment). This is a gargantuan number.
The tragedy is two fold. One, unemployment is rough on the individuals (and their families) from both a psychological and financial perspective. Two, this is a massive lost opportunity for the rest of society; at 40 hours a week, those 12.7 million Americans could be contributing roughly half a billion hours of productivity per week.
A big part of the problem is what’s called structural unemployment. With structural unemployment, the issue isn’t a lack of jobs but that the unemployed have the wrong skill set. Here in the Bay Area, startups and tech companies are hiring like crazy but the target of the recruiting tends to be engineers / programmers; most unemployed can’t code.
Retraining the unemployed is the typical method for fixing structural unemployment. After World War II, the GI Bill paid for returning soldiers to go to college and gain skills for the new economy. Today, the government could incentivize the unemployed to learn programming or other relevant skills. 5.4 million Americans have been jobless for over 27 weeks; one can learn basic coding skills in half that time.
Advances in online education means that the training doesn’t need to occur in a traditional university format; it could be via Just-in-time Education techniques I’ve discussed previously. There are so many great (free) resources available, the government could just focus on generating the important signal that the content has been learned. This could be through sponsoring or subsidizing a new wave of tests / testing centers.
An additional benefit to teaching more people to code is that coding dramatically lowers the barrier to entrepreneurship. This means that more people will be able to build websites and digital tools that can earn them money, create jobs, and deliver value to the rest of society.
While this could go a long way toward ameliorating the problem, it won’t solve unemployment on its own. As mentioned above, there is a huge opportunity around harnessing the ~500 million free hours per week of the currently unemployed. When not learning new skills, the unemployed should be engaged by their communities.
I haven’t thought much yet about how communities can use the unemployed but I imagine there are a lot of useful ways to harness their time. They can help plant gardens that will lead to cheaper, healthier diets. They could help build new playgrounds or homes a la Habitat for Humanity. They could tutor students after school (or in school).
Ideally the community tasks would lead to new, marketable skills but that’s a bit trickier. Perhaps a Code for America type program could teach people to code and have them help local governments with programming problems.
That’s all I have for now, but I’ll keep musing on the topic and will likely write a followup…
What do you think?
Continued at: Fixing Unemployment: Part 2