Lisa Katz| Crain’s Detroit Blog
Southeast Michigan is at a pivotal point in economic and workforce development. If employment increases based on employer demand projections, the total income for Michigan families could grow by $4 billion, which roughly translates into $160 million in additional income tax revenue and more than $200 million in additional sales tax revenue for the state. This can be a reality if the career readiness gap is addressed, providing the middle- and high-skilled workers employers need.
After more than 10 years of declining labor force participation, the number of individuals working or looking for work has stabilized across the region and is beginning to increase. Labor demand from employers is on the rise as well. In many sectors, demand far outpaces the supply of skilled talent. Retirement rates are expected to increase with economic improvements, further exacerbating the problem, leaving employers struggling to find experienced, competent workers. In Southeast Michigan, roughly 158 people per day (nearly 58,000 per year) will reach retirement age. We will have fewer overall workers in the future, no matter what we do.
Furthering the challenge, the continued misalignment of training programs to the actual needs of employers may lead to a long-term talent pipeline issue. Not only is there a deficiency of students interested in high-demand industries, but there is a shortfall in the number of individuals completing degrees or certifications relative to the employer demand for workers with various levels of education. Online job postings between January 2013 and May 2014 in Michigan showed a need for nearly 47,000 engineering and design workers with bachelor’s degrees, but only 5,000 degrees were awarded in the state in these areas of study. Similar trends are present in the other industries tracked, for example, with IT postings for bachelor’s degrees exceeding 72,000 with only 1,800 graduates attaining this degree. In health care, almost 31,000 postings indicated a requirement for a graduate degree, but degree attainment for this level of education was less than 5,000 completions.
Companies may be less likely to fill job openings with individuals who are ready to work, leading to increased needs and costs for on-the-job training and less likelihood that employers will be able to appropriately fill their middle- and high-skilled openings. In turn, this may lead to less successful companies and frustrated employers. This could result in stunted job growth for the region.
If we invest in career awareness for our middle school, high school and young college students, Michigan may retain many of the young people and future workers who are projected to leave the state. Current projections from Economic Modeling Specialists Inc. (EMSI) indicate the state could lose nearly 250,000 residents age 10-30 by 2023. We have the potential to retain at least 75,000 additional workers by helping students get into high-wage, lucrative careers within the next decade.
The economic recovery of the Southeast Michigan region is not sustainable without changes to the way in which we approach career readiness and awareness. In the 1990s, Michigan spent roughly $50 million per year on related efforts. Today, the figure may be closer to $1 million. Young people (and adults) lack direction in their careers; greater effort must be made to provide it.
Recently, Workforce Intelligence Network released an issue brief, “The Career Readiness Gap; Challenges of Career Readiness and Awareness in Southeast Michigan,” which can be accessed at win-semich.org/policy. The goal is to follow up on this conversation with a series of policy town hall meetings to discuss the issue in fall 2014, resulting in actionable recommendations to address the career awareness gap. It is very likely that the necessary approach will be multifaceted and require partnership among many, as well as greater, resources. Meeting the talent needs of our region’s employers depends on it.
To learn more about the WIN organization, visit win-semich.org. This blog post was developed with research and content from Tricia Walding, project manager, research & policy, Workforce Intelligence Network.
 Note: 2014 dollars and 2014 effective sales and income tax rates applied.
 Note: Online job postings may include more than one degree requirement, resulting in a duplication of the number of postings requiring a specific degree. Online job postings do not consistently indicate the degree level requirements. Online posting information attained from Burning Glass. Degree attainment information attained from IPEDS.