Friday, June 21, 2013

The Chinese Skills Disconnect: An Opportunity for Us?

The New York Times headline read “Degrees, but No Guarantees.” However, the story was not about the students graduating from American universities this season. Instead, it was about Chinese grads. It seems that Chinese businesses are swamped by job applications from graduating students but have few jobs to offer. At the risk of seeming to express schadenfreude, I want to point out that as bad as our economy seems for our own grads, their prospects are better than China’s.

The problem is not just that growth of the Chinese economy has slowed from its fever pitch of the previous several years. More fundamental is the nature of that economy. Like the postwar United States economy, it is growing mainly from manufacturing. You only have to prowl the aisles of your local Walmart to see the fruits of that manufacturing prowess. However, in an economy that has a very large share of low-tech manufacturing, such as the plants that produce plastic toys, rubber tires, kitchen utensils, or even iPads and other high-tech devices that are assembled by hand, there is a limited need for college-educated workers.

In the postwar American economy, millions of workers with only a high school diploma or even less education were able to find low-tech work in manufacturing plants and earn middle-class incomes. But more and more young people are getting college degrees now, despite the fast-climbing expense, because those low-skill jobs have largely vanished, exported to China, and the low-skill service jobs that remain are very low-paying.

But consider the implications for China. Think of it this way: We have not only exported the 1950s-style manufacturing capability, but also the accompanying 1950s-style skill requirements. Chinese universities are capable of churning out hordes of graduates, having quadrupled the number of college students in the past decade. But at this point in its development, China’s economy does not particularly need these grads.

A survey released last winter of Chinese young people age 21 to 25 found 16 percent of the college grads unemployed, but only 4 percent unemployment among those with only an elementary school education. This is the reverse of what you’ll find in the United States, where the May 2013 unemployment rate was 11.1 percent for those with less than a high school diploma and only 3.8 percent for those with a bachelor’s degree or higher.

There certainly is a case to be made that China is preparing human capital for the economic transition that will occur as wages rise, as manufacturing shifts to still lower-paying countries, and as their economy starts looking more like ours does now rather than our 1950s model. But what will the young grads pouring out of the universities find to occupy themselves until that shift occurs? And if that shift is somehow accelerated—for example, if China’s government invests very heavily in research and development activity—what will happen to today’s huge cohort of low-skilled Chinese workers?

America’s “greatest generation,” which prospered during the postwar period, has already left the workforce. They had several decades in which to enjoy the match between their skills and their nation’s economy. Among the baby boomers, who got their start in that postwar economy, many now are suffering from the shifted economy but at least had many good years of opportunity. What about China? With worldwide economic development now moving so fast, will millions of Chinese factory workers have the rug pulled out from under them as their 1950’s-style economy disappears? Or will China find some way to slow this transition and continue to disappoint the college grads? Either of these alternatives promises to cause social unrest.

There is still one more possibility: that China will do what we did with community colleges in the 1970s, only on a much bigger scale—that is, invest heavily in adult education and retool the hordes of low-skill workers for the inevitable economic shift. Online courses, in particular, could facilitate a golden age of Chinese adult education in the next decade. But consider that the online lessons won’t need to be based in China. Thousands of Chinese students are now coming to brick-and-ivy universities in the United States because of our sterling reputation for higher education. We are now pioneering online education. If we play our cards right, perhaps Chinese-language online education can be one of our hottest export industries in the next decade.

Wednesday, June 5, 2013

No, Friedman; Here's the Better Way to Get a Job

I was appalled by Thomas Friedman’s column of May 28, “How to Get a Job.”  The title indicated that the column was aimed at job-seekers and would provide advice about job-finding, but the content that followed was quite misguided. It might as well have been called, “How Not to Get a Job.”

In fairness, Friedman made one valid point: He quoted a Harvard education expert, Tony Wagner, who says, “The world doesn’t care anymore what you know; all it cares ‘is what you can do with what you know’.” Employers are losing respect for a degree as an indicator of value and instead want to know only “Can you add value?”

The root problem with the  rest of Friedman’s analysis is the unspoken assumption that all jobs are found through advertisements. Of course, in the present economy, posted jobs tend to attract floods of applicants, so the hordes of job-seekers who respond to these postings have a tough time demonstrating to employers what value they can add, and employers have a similarly tough time identifying the applicants who can add the most value. Therefore, Friedman goes into a lengthy discussion of a start-up company that claims it can devise tests to identify the most promising employees in the avalanche of resumes.

But consider that, according to some research, fewer than 15 percent of job-seekers find work through job postings. (This research was done when the economy was in better shape; I suspect the odds are worse now.) The most successful way to find jobs is to tap into the hidden job market—to identify the jobs that open and get filled without being advertised. Every job opening goes through several steps between the time when it first becomes apparent that a new hire is needed and the time when the job gets advertised. By making yourself and your skills known at any instant between those two times, you can get the job.

The procedures for connecting with the hidden job market are thoroughly spelled out in books such as What Color Is Your Parachute? by Richard Bolles and Getting the Job You Really Want by  J. Michael Farr. Briefly, it means networking. Specifically, the strategy consists of reaching out to two kinds of contacts: warm contacts, the people who already know you; and cold contacts, the people who don’t know you yet. With both types of people, it helps to focus on contacts who have good connections to the kinds of employers that hire people like you. However, unexpected connections can occur, so you should also give special consideration to anybody who knows a lot of people.

The immediate goal is not a job but an interview. In fact, the interview process is a lot easier on all parties concerned when it’s not part of a formal hiring process, so when you cold-call and ask for an interview, it’s to your advantage to say you are not looking for a job with the employer but simply want information about the kind of work the employer does. In fact, the employer may never hire you but will then be part of your network and may be able to direct you toward or refer you to another employer who is expecting to hire. So redefine what counts as an interview and don’t think it has to be for a posted job opening.

Another advantage of face-to-face encounters in the networking process is that they allow you opportunities to make a thorough case—much better than a resume could—for what value you can bring to an employer. You may make your case through any combination of what you say, the professional appearance you show, the interpersonal skills you demonstrate, and a portfolio of key accomplishments that demonstrates your skills.

This job-seeking method is not just theoretically effective; it has a proven record of success. My former boss, the late J. Michael Farr, built his publishing company on the workbook that he wrote for classes that taught this technique. A minuscule fraction of job-seekers will benefit from the high-tech, gee-whiz methods used by the start-up company that Friedman describes, but for most of us there's no substitute for networking through phone calls and face-to-face contacts.