US job market: Four ways to cut the unemployment rate
The modest recovery in the US economy since 2009 has been marked by tepid job creation – a trend that needs to change if the nation is to return to the kind of low unemployment rates that prevailed before the recession. But how to do that? In one of the most detailed efforts the address that question, the McKinsey Global Institute put out a set of recommendations on how to create 21 million new jobs by 2020, bringing unemployment down to 5 percent.
Here's a look at the institute's core proposals:
1. Develop new skills
One of the job market's biggest problems, the report says, is a mismatch between the skills workers now have and the skills required by potential new jobs. If current trends hold, McKinsey estimates the US will have a shortage of up to 1.5 million workers with a college degree or higher in 2020, while nearly 6 million Americans who lack a high school diploma will be unemployed.
Solutions could include more partnerships between employers and community colleges or vocational schools, a national jobs database to help people decide what careers to train for, and targeted federal scholarships.
The report estimates that six broad sectors – health care, business services, leisure and hospitality, construction, manufacturing, and retail – will account for as much as 85 percent of new jobs. (Those sectors account for 66 percent of all jobs in America today.)