Monday, August 8, 2011

Structural Unemployment or Why There Are So Many Filipino Nurses.

Most politicians speak about the need to "create more jobs" as a means to address our high unemployment rate, usually proposing a costly mix of tax cuts and corporate subsidies. While a relative lack of job opportunities is a factor, a far more pertinent one is structural unemployment, which is defined as "a form of unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. Even though the number of vacancies may be equal to, or greater than, the number of the unemployed, the unemployed workers may lack the skills needed for the jobs; or they may not live in the part of the country or world where the jobs are available."   In the case of the United States we have a vast surplus of unskilled labor and at least in some sectors of the economy, we are experiencing a shortage of skilled labor. This accounts for the high level of unemployment among unskilled workers and the low level of unemployment among most skilled workers.

Every time I visit a hospital or geriatric center, the reality of structural unemployment is highlighted by the large number of Filipinos who were invited to the United States to fill nursing positions. In other words, even in the face of high unemployment, an insufficient supply of nurses is generated among American citizens to meet the high demand for nursing. Before I continue, I must emphasize that this is not an anti-immigrant diatribe; quite the contrary, they are providing much needed skilled labor and a modicum of cost control in a sector beset by constant price inflation.The relative lack of interest of Americans in nursing is all the more puzzling considering that nurses are generally well paid, in fact their average salary in Chicago is $76,000 plus benefits.

So, what could possibly account for the large number of Americans who are not responding to the high demand (wages) for nurses and other skilled labor positions? Part of this stems from the time needed for workers to shift from economic sectors rendered largely moribund (such as construction) by the collapse of the housing bubble to expanding sectors, like health care. Extended unemployment benefits and misguided government efforts to stimulate construction and other beleaguered economic sectors, limits incentives for workers and firms to make the tough transition. The inability to sell one's house also makes it difficult to workers to relocate to more economically vibrant regions of the country.

Also, the myriad of (health, housing and food) subsidies offered by the state to low wage workers diminish incentives to develop the skills needed to obtain employment that would allow them to meet those needs on their own. These policies may be well meaning, but they have indirectly exacerbated the problem of a growing surplus of low skill labor.
Shifting subsidies towards select educational endeavors would be far wiser. The reason I use the term select is because many individuals utilize heavily subsided loans to obtain degrees in fields that are already beset by high levels of unemployment. So, as much as I love literature, theater and philosophy, given widespread budgetary woes, we should limiting the level of public subsidies offered to those who pursue studies in the these fields. In contrast economic logic dictates that if we must offer subsidies, we should direct them towards those who pursue an education in high demand fields such as medicine, mathematics, engineering, education, computer science, etc. But, the value of a cultured, thoughtful citizenry leads me to support a core, cultural curriculum (that includes literature, history, art & music) to all students regardless of their primary area of study.

On a cultural level, I wonder if general shifts in American culture towards instant gratification and the cult of self esteem, is a culprit in the failure of more students to pursue studies in the sciences. For most students, the rewards offered by scientific endeavors are not intrinsic and immediate, but are derived from the sense of achievement and mastery gained by solving an equation or a quandary. Discipline and the pursuit of education does not come natural to children or adults, it must be instilled by committed parents. And the failure of parents and teachers to do so has very real economic consequences. But, until the American people are able to produce more nurses, I will declare "maligayang pagdating sa Estados Unidos," which in Tagalog means "welcome to the United States."

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