The World at Work: Jobs, Pay and Skills for 3.5 Billion People
McKinsey Global Institute (MGI) recently released The world at work: Jobs, pay and skills for 3.5 billion people, a report analyzing dramatic shifts in global labor markets that have occurred over the last several decades, which have caused increasingly stark skill and wage gaps across the world. Last week’s issue of OVAE Connection described the changes in the global supply and demand for different types of workers, and the diverging fortunes of high-skill and low-skill workers in today’s advanced economies.
MGI estimates there will be 1.5 million too few workers with college or graduate degrees in the U.S. by 2020. Increasing the supply of high-skill workers that employers demand will require sustained efforts in two particular areas: sharply raising college completion rates (both among young people and adults who need additional training to be competitive for medium- and high-skill jobs) and increasing the participation of high-skill workers in the labor force. Increasing employment opportunities for the remaining low- and medium-skill workers who are not able to complete a college degree or postsecondary training program will also help relieve the workforce deficit.
MGI argues that the traditional models of education and workforce development will need to be transformed around the world in order to address the increasing skill gaps. Innovation in the delivery of education and training services is needed to raise the productivity of the education sector and maximize scarce resources. MGI’s global agenda to upgrade the skill level of the labor force over the next two decades involves three key strategies:
- Align education with employment demand, focusing on key STEM fields that face growing worker shortages;
- Focus on creating a comprehensive system of job-relevant career and technical education with smooth school-to-work pathways; and
- Utilize online learning and interactive technologies to reach millions of students at low cost, transforming the traditional role of the classroom as well as the educational experience of students.
MGI also calls for those in the private sector to be involved in this effort to ensure they have access to the talent they will need to compete and succeed globally. Strategies for business involvement include: taking an active role in public education and training systems, such as creating STEM initiatives to provide internships and learning opportunities for students; participating directly in the provision of educational services, particularly in segments not well covered by the public education system; investing continually in improving the knowledge and skills of the private-sector workforce; offering flexible work and compensation structures for older workers to retain their skills and institutional knowledge; and shaping corporate social responsibility initiatives around employment priorities, such as reducing youth unemployment and reintegrating long-term unemployed adults into the labor force.
As the economy continues to evolve and the demand for particular kinds of labor shifts, a comprehensive and coordinated effort will be needed to mitigate the impact of rising skill gaps that will likely create large imbalances and have huge social and economic costs. To keep such possibilities from becoming realities, policymakers, educators, business leaders, and workers themselves must find ways to bring education, training, and job creation into the 21st century.