Despite a positive economic outlook, investments in workforce development are necessary to face significant challenges that still persist in the country’s labor market.
That was one of the main takeaways after a day of discussions Friday at the New York Federal Reserve.
The central bank co-sponsored the event for the launch of the three-volume “Investing in America’s Workforce,”an in-depth study by more than 100 authors of policies to improve economic performance of workers and companies.
The study is part of a two-and-half-year-long initiative started in October 2017 and aimed at analyzing America’s labor market and promoting efficient policies and programs. The ultimate goal is to match workers’ skills with companies’ requirements in order to make the country reach “its full economic potential,” according to the initiative’s manifesto.
“Sustainable economic growth and thus broad-based prosperity is dependent on a healthy job market, one in which employers can find the skills they need and workers find jobs that allow them to grow and move up the economic ladder,” New York Fed President John Williams said during his welcoming remarks at the book launch event.
During panel discussions, speakers from workforce development programs as well as economists touched upon the challenges caused by technological change, economic inequality and barriers to labor mobility.
While economic indicators seem to show that America’s economy is booming, with GDP growing at 4.2 percent in the second quarter of 2018 and unemployment rate hitting 3.7 percent in September, numbers don’t tell the whole story, speakers said.
“A lot of people from the low-income community are not benefiting from this economic expansion,” said Lisa Futterman, regional director of the Workforce Development Institute.
There is a huge economic gap between communities, with African-Americans, Hispanics and Native Americans having fewer job opportunities, said Chauncy Lennon, the Lumina Foundation’s vice president for the future of learning.
Data from the Bureau of Labor Statistics showed that while in October unemployment rate was 3.3 percent for whites, it reached 4.4 percent for Hispanics and 6.2 percent for blacks.
Inequalities could be even further exacerbated by technology, according to the workforce experts. Job boards are online and algorithm matching tools and online skills assessment tests are an important part of the hiring process, Lennon said during a panel on employment opportunities. “We don’t know what the outcome would be for low-skilled workers,” he added.
Access to technology has become “vital” as many communities still lack connection, wrote Stuart Andreason, the director of the Center for Workforce and Economic Opportunity at the Federal Reserve Bank of Atlanta, and the Fed’s advisor Alexander Ruder in the book’s introduction.
“Communities without fast and reliable broadband Internet will disadvantage business, learners, and community members,” Andreason and Ruder said.
The biggest challenges are funding programs and policies aimed at helping these communities as well as implementing meaningful partnerships between businesses, government agencies and non-profit organizations, said Jane Oates, the president of WorkingNation, a non-profit campaign launched to inform people about the risks stemming from the profound changes in the labor market.
David E. Altig, vice president of the Atlanta Federal Reserve, also stressed that “investing is a business imperative.” Altig said the Fed has been working on addressing these issues as it is involved in diverse projects. It has been participating in the National Poverty Study, which is the “first systematic and scientific collection of information” about people living in poverty.