Minneapolis, USA. The talent gap in high-end job markets and a general increase of low-wage jobs are the two trends defining the fifth year of the US economic recovery, according to CNN chief business correspondent Christine Romans.
Speaking at the annual conference of the Institute of Management Accountants in Minneapolis, Romans shared insights into the lights and shadows of the post-crisis economic outlook in the US.
Although recovering since 2009, one of the reasons why the US economy might not be operating at its full potential (3.5% GDP growth according to the Federal Reserve) is linked to the structure of its labour market.
"On the one hand, you are seeing talent wars and CEOs complaining about not having enough people to fill skilled jobs; and everywhere else is low-wage workers who are taking to the streets protesting for $13 an hour [jobs]…that’s an important policy to consider over the next years," Romans said.
Romans highlighted how in the technology sector, such as in San Francisco’s Silicon Valley, companies acquire other companies just for the talent of their employees before rivals can hire them. But the demand for skilled workers applies to other sectors.
"There is complaining about skills gap from every single person in the corporate suite. They can’t get the people they need. But the people who maybe have the skills on paper, especially young people, lack leadership skills, executive skills, to be able to identify and solve problems," Romans said.
On the other hand, discussions about raising the minimum wage rank high on the agenda of the Obama administration, which is going to push for an increase in the next two years, according to Romans.
Between January 2008 to 2010, around 3.6m jobs with wages of $20 to $30 per hour just disappeared, Romans highlighted.
From February 2010 to February 2014, around 2.6m of those jobs were recovered but came back as low-wage jobs, $9 to $13 an hour, she added.
A survey conducted by CNN found that 59% of respondents believed the so-called American dream was unachievable, with 63% of them saying that the next generation will not do better than the one before.
When asked how long the economy is going to take to recover, 61% of them said at least 3 years; 16% said it would never recover and only 3% of Americans believed the economy has fully recovered. For 69% of respondents another crush was coming soon.
Despite GDP figures pointing to a steady recovery, the pessimism focused on two groups: those who are blue collar workers and those who don’t have a university degree.
Romans said the pessimism of those two groups is stunning as long term unemployment is still a big problem.
"Recruiters told me that many companies were only taking those who have a job. You have to have a job to be considered for a job. That completely leaves people out of the recovery. This is a structural problem and a budget issue at some point. How this people survive?"
On top of that, tuition fees in US universities have increased by 544% from December 1984 to April 2014, according to figures by the Institute for College Access and Success, a non-for-profit independent research and policy organisation.
Romans pointed out, however, that the US economy is stronger than the survey revealed, with the unemployment rate this month at 6.2% and 2.2 jobseekers per opening, down from 6.2 jobseekers in 2009.
Accounting curriculum in crisis, IMA