New skills key to region’s economic future
As originally appearing in The Patriot Ledger

By James T. Brett & Alan Clayton-Matthews

Atthe recent New England Economic Partnership conference, economists from around the region discussed the outlook for this part of the country.

As it has been for several years, the economic forecast was tempered: The region is expected to experience slow growth and slow recovery over the next four years. During the recession, we lost some 5 percent of the jobs in New England, and we are unlikely to return to pre-recession employment levels until well into 2015.

Among the six states, Massachusetts is enjoying a comparatively healthy recovery, having been in an expansion phase since the summer of 2009, although its economic growth is expected to slow to a pace more in line with the national economy.

Between December 2009 and April 2012, the Massachusetts unemployment rate fell from 8.7 percent to 6.3 percent. Nevertheless, unemployment remains high, with a historically high number of people underemployed, discouraged or marginally attached to the labor force.

Much of this derives from external factors. New England’s prosperity is obviously intertwined with the rest of the nation. To the degree the national picture dims, our region is likely to mirror those developments. And, perhaps to a greater degree than other parts of the country, Europe’s influence is significant. The European Union has traditionally been an important trade partner and investor for New England.

Given the factors we cannot control, it is important to look at elements in the economic mix that we can address. In any recession, there is dislocation and realignment of the labor market with the emerging employment opportunities. In this recession, we see a significant disconnect between the types of new jobs being created and the skills of those seeking employment.

Around New England, employers in many industries have job openings, but simply cannot find qualified employees.

In a study forecasting job growth in Massachusetts between 2007 and 2020, the top two sectors for growth were computer and mathematical occupations, along with health care support occupations.

In each of these sectors, jobs are emerging that require highly skilled labor – and often different skills than in past decades. In Massachusetts, our economy is shifting more and more toward occupations that require science, technology, engineering and math, the so-called STEM fields, and our workforce is not keeping pace. We need to redouble our efforts in educational reform to help expose students to STEM skills early and often, and ensure that they arrive in the workforce equipped with the advanced skills needed in jobs of the future.

There is also a “skills gap” for employers needing workers with specific job skills, such as advanced manufacturing techniques. Precision manufacturing technology becomes more sophisticated every day, and so do the skills needed to work in this sector. We need to do more to equip the existing labor force and the next generation of workers with sophisticated mid-level skills needed in the emerging manufacturing sector.

Since 1990, the number of workers with any post-secondary education has been growing more slowly than in other parts of the country. In particular, the region faces a shortage of workers with education beyond a high school diploma, but short of a bachelor’s degree.

Many of the jobs in growing sectors, such as health care, will require just this mix – some 40 percent of future job openings. It is vital that New England’s educational institutions recognize this and align their offerings accordingly.

Skilled workers are the catalyst to transform New England’s long-term economic prospects. Our region’s economic recovery will depend in large measure on the alignment between the skills of available workers and the emerging job opportunities. With slow growth projected for the next few years, and significant external economic risks we cannot control, enhancing the skills of our labor force will pay huge dividends.

James T. Brett is president of The New England Council, the nation’s oldest regional business association. Alan Clayton-Matthews is the New England Economic Project’s Massachusetts forecast manager and an associate professor at Northeastern University.

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