Warren Meyer says what the US needs to do is to make changes to the structure of the working world to allow companies to profitably hire low-skilled workers:
A lot of head scratching goes on as to why, when the income premium is so high for gaining skills, there are not more people seeking to gain them. School systems are often blamed, which is fair in part (if I were to be given a second magic wand to wave, it would be to break up the senescent government school monopoly with some kind of school choice system). But a large portion of the population apparently does not take advantage of the educational opportunities that do exist. Why is that?
When one says “job skills,” people often think of things like programming machine tools or writing Java code. But for new or unskilled workers — the very workers we worry are trapped in poverty in our cities — even basic things we take for granted like showing up on-time reliably and working as a team with others represent skills that have to be learned. Amazon.com CEO Jeff Bezos, despite his Princeton education, still learned many of his first real-world job skills working at McDonald’s. In fact, back in the 1970’s, a survey found that 10% of Fortune 500 CEO’s had their first work experience at McDonald’s.
Part of what we call “the cycle of poverty” is due not just to a lack of skills, but to a lack of understanding of or appreciation for such skills that can cross generations. Children of parents with few skills or little education can go on to achieve great things — that is the American dream after all. But in most of these cases, kids who are successful have parents who were, if not educated, at least knowledgeable about the importance of education, reliability, and teamwork — understanding they often gained via what we call unskilled work. The experience gained from unskilled work is a bridge to future success, both in this generation and the next.
But this road to success breaks down without that initial unskilled job. Without a first, relatively simple job it is almost impossible to gain more sophisticated and lucrative work. And kids with parents who have little or no experience working are more likely to inherit their parent’s cynicism about the lack of opportunity than they are to get any push to do well in school, to work hard, or to learn to cooperate with others.
Unfortunately, there seem to be fewer and fewer opportunities for unskilled workers to find a job. As I mentioned earlier, economists scratch their heads and wonder why there are not more skilled workers despite high rewards for gaining such skills. I am not an economist, I am a business school grad. We don’t worry about explaining structural imbalances so much as look for the profitable opportunities they might present. So a question we business folks might ask instead is: If there are so many under-employed unskilled workers rattling around in the economy, why aren’t entrepreneurs crafting business models to exploit this fact?