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America’s New Unskilled Workers

Rick Newman
Senior Columnist
The Exchange

If a feckless government and a lackluster economy haven’t convinced you that America’s glory days are over, perhaps this will: Americans are worse at math, reading and problem solving than people in nearly two-thirds of the world’s advanced nations.

Those findings, from a new report by the Organization for Economic Cooperation and Development, corroborate a lot of other evidence showing that millions of Americans lack the skills needed to prosper in the 21st century economy. That means “unskilled workers” may no longer be just the people at the bottom of the economic food chain who lack a trade, specialty or college degree. We may be in a new and troubling phase in which skills that seemed relevant yesterday have no value today, compounding the ranks of those deemed “unskilled” in the eyes of the marketplace. Many of America’s new unskilled workers might even have college degrees.

It’s taking a while to figure out exactly how the economy is changing, but we know this much so far: Unemployment remains highly elevated more than four years after the last recession ended, more people are dropping out of the workforce altogether, and household income is still about 6% below pre-recession levels. Former President Jimmy Carter said recently that the "disparity between rich people and poor people in America has increased dramatically. The middle class has become more like poor people than they were 30 years ago. I don't think it's getting any better."

The real question is why this is happening, and whether there’s anything anybody can do about it. In his new book "Average Is Over," economist Tyler Cowen of George Mason University argues that the job market is being bifurcated into two types of workers: Those who are good at working with “intelligent machines”—and will continue to have plenty of rewarding opportunities-- and those who are not, and who are already falling behind. “The slacker 22-year-old with a B.A. in English, even from a good school, no longer has a clear path to an upper-middle-class lifestyle,” Cowen writes.

The U.S. vs. the rest

The OECD’s “survey of adult skills” fleshes out the ways American workers are falling behind their peers in other countries. The organization assessed 166,000 adults in two dozen mostly advanced countries in three broad categories: literacy, numeracy (mathematical competence), and problem-solving ability in a “technology-rich environment.” The idea is to measure skills in demand today, to determine which countries have the best-prepared workforce and which seem destined for mediocrity.

You probably know where this is headed. The best performers were smaller European nations such as Finland, Sweden and the Netherlands, plus Japan and Australia. The U.S. scored considerably below average in all three categories, as the following table demonstrates:

This study differs from others that might sound similar but mostly measure student aptitude in math, science and other disciplines. Focusing on adult skills shows that -- not surprisingly -- shortcomings that appear among American students also exist in the adult workforce.

Here are a few of examples of what it takes to score in the top tier on various skills. Reaching the highest level of literacy requires synthesizing information from a variety of different sources and gathering fact-based evidence to buttress a logical argument (so don’t try this in Washington, D.C.). A top score on numeracy includes the “ability to understand complex representations, and abstract and formal mathematical and statistical ideas.” (You’re probably on your way to a top score if you can even understand what the OECD is talking about.)

The top-level of problem-solving requires people to start a task such as reserving a meeting room for a business function on a given date, then salvaging the whole event when one or more snafus occurs, using computer applications and other tools. Only 5.8% of people in any country reached this level; in the U.S., it was 5.1%.

It’s worth noting that the OECD study doesn’t look so much at areas of academic specialization, such as engineering, law or language, but at “softer” skills that employers find important but also difficult to measure. Workers may also find these skills difficult to develop, though the OECD points out that frequent exposure to the latest technology can be a key advantage.

As for the growing ranks of today’s unskilled workers, they increasingly include people with college degrees in social sciences, the arts, communication and design, along with blue-collar laborers waiting for low-tech assembly-line jobs that may come back to America. It could be argued that a well-rounded liberal-arts education still has value, but employers only seem to care if it allows you to manage complex systems, rapidly solve problems, enhance profitability or contribute to the bottom line in other ways. Education still pays, but it's up to you to convert it into skills that help pay the bills.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.