Anthony Carnevale does not toss out “to-do” items for an embattled labor movement in the annoying manner of so many policy wonks. He bases his challenge on a far-reaching analysis of the changing character of the American economy and labor's important role in it.

Carnevale, the Vice President for Education and Careers of Educational Testing Services, put forward his challenge at the AFL-CIO's Working for America Conference in Philadelphia on April 22. He is an internationally recognized authority on education, training, and employment who served as chair of the National Commission for Employment Policy during the Clinton Administration. He's no stranger to the labor movement: he was once Government Affairs Director of the American Federation of State, County, and Municipal Employees.

“Traditionally, labor saw its role as one of mobilizing skilled and unskilled workers to confront capitalists, to guarantee workers access to work, and a share of the profits,” Carnevale explains, but “bargaining should now be about skills.” He quotes Communications Workers' President Morty Bahr: 'The function of American labor is not to decide who should get what, but who should get what next.'”

“Increasing the skills of all Americans is the missing element of our labor strategy,” Carnevale contends. In his view, technology and globalization undermine the position of low-skilled workers, but can be exploited by those who master new modes of production and communication, and have the capacity to adapt to an ever-changing work environment. The retirement of educated baby-boomers and new restrictions on immigration by trained foreigners will create shortages of skilled labor in the decade ahead. This could create opportunities for the labor movement, but only if it re-tools to take advantage of them.

Carnevale states the options bluntly: “We can take work offshore, or we can get aggressive about increasing the skills of Americans.”

One place such skills can be fostered, he notes, is in the schools that serve our 18 to 24 year old population. But what about the large portion of the working population that for one reason or another cannot take advantage of these schools? “It is very costly to serve the non-traditional student because that requires customization,” Carnevale explains, “and the current system is somewhat rigid. Since funding for the Employment and Training Administration was cut, the part of the U.S. Department of Labor's mission that is charged with helping these people is effectively defunct.”

All this presents a challenge and an opportunity, in Carnevale's view: “It's time for American labor to step up and demand a national training system in exchange for free trade and in response to technological change.” (For a full text of Carnevale's speech, see:
http://www.newecon.org/Carnavale.html

Trade Bill and Training Opportunities

On May 23rd the Senate voted 66-30 to approve trade promotion authority (TPA, or fast track negotiating authority) for the President for the first time since 1993. The legislation, if approved in the House/Senate conference, will also make important reforms in federal programs helping workers displaced by global competition. (See: http://www.ndol.org)

Among the reforms proposed in Trade Adjustment Assistance (TAA) are a significant increase in funding for retraining displaced workers, and provisions that will enable dis- placed workers to continue receiving health insurance coverage as they prepare for and seek new jobs.

The loss of health coverage by laid-off workers often makes it very difficult for them to enlist in re-training programs. They are under pressure to take a new job –- any job -– or go on welfare so they or their families will not be exposed to the risk of a health crisis while uninsured.  If this provision passes, it could increase workers' demand for retraining programs available through Trade Adjustment Assistance.

A new injection of funds into our state-operated workforce development system will open greater opportunities for unions to participate in training and educational programs. Even those who are skeptical about or opposed to giving the President TPA may see in these “sweetener” provisions the recognition that Congress and the public are favorably disposed to the use of public funds for skills and professional development, and toward a union role in it.

EU Expects Skills Crisis

Another report from the European Commission sternly warns European policy makers about "the recent under-performance of the EU in labor productivity growth," a poor performance that can endanger key strategic goals Europe has set for itself in this decade.

A major concern set out in this report is the number of EU countries that are lagging in introducing new Information and Communications (ICT) technologies. The report asserts that "The quality of the labor force and the availability of skilled labor must be improved so that new technologies, innovation and research and development can be more readily exploited. Labor market institutions and policies must meet the needs of new technologies."

Too many prospective European workers are being trained for jobs that are not in high demand. An interesting footnote to the report remarks that "the problem of skill imbalances is particularly worrying since it has occurred in a period of chronically high (albeit declining) unemployment." The report also notes that the trend is moving the wrong way: "educational mismatch, in particular, was worse in 2000 compared to 1992."

In concluding, the EC report strikes a chord that will not be unfamiliar to readers of this Bulletin: "Knowledge (and the capacity to use it effectively) is a key to the competitiveness of our economies. To ensure that the people of Europe have the required knowledge and skills, coherent strategies and practical measures fostering lifelong learning for all are to be developed and implemented. New ways of education and training have to be explored, and the use of technology for learning must be reinforced to facilitate access to and to increase quality of learning."

Germany: Limber Up!

The European Commission, the executive authority of the European Union, has cited labor market rigidity as a major cause of Germany's lagging growth, according to reports in the German media.

Economic growth in Germany is about a full percent lower than the EU's already sputtering average, an embarrassing statistic for the world's third-largest economy. While some of this may result from the huge costs of reunification, the EC study blames the coun- try's muscle-bound labor markets for a large part of the problem. Many observers think it possible that economic stagnation could cost Gerhard Schroeder, the Social Democratic Chancellor, his September 22 re-election bid.

Some of the "reforms" suggested by the EC study: