WITH the United States unemployment rate stuck at about 7 percent, and nearly 20 percent of all young people out of work, many Americans believe our nation faces a long-term shortage of jobs. But for business, an entirely different prospect looms on the horizon: a shortage of qualified workers. This paradox of high unemployment while jobs go begging is already evident in Boston. The help-wanted sections of local newspapers are bulging with ads, and qualified workers are in such short supply that many local companies now offer bonuses for bringing in new employees.
Boston's labor shortage seems certain to worsen over the next decade and spread to other cities. Several factors lie behind this outlook, including the higher educational skills required by many new jobs. But the chief cause is demographic.
Trends in Boston highlight the demographic changes taking place throughout the nation. About one-quarter of New England's current work force will retire within the next decade. Because of the declining US birthrate, fewer young people will be entering the job market to replace those who retire. In 1950, the population of Boston included 345,000 teen-agers and young adults between the ages of 15 and 24. That number increased to 552,000 in 1980 as the baby boom reached its peak. But the city's population of 15- to 24-year-olds has already crested and is expected to drop to about 413,000 in 1990, a 25 percent decrease in just 10 years.
Companies like Boston-based John Hancock need well-trained employees who think clearly, possess sound academic skills, and can perform a variety of demanding tasks. But where will they come from?
The obvious answer is that business must support improvements in public education to help inner-city youth qualify for challenging entry-level jobs, and it must learn how to hire and train the unemployed. Doing so is surely a matter of fairness and good corporate citizenship. But it is also dictated by self-interest. By helping young people and the unemployed, business will be helping itself.
Boston's business community first became seriously involved in public education during the mid-'70s, a time of turmoil when the city and schools responded to a federal court order mandating school desegregation. Out of that turmoil arose a ``partnership'' project that linked each of the city's 16 high schools with local businesses. The John Hancock was paired with English High School, one of the oldest public high schools in the United States. Today, many of the relationships forged at that time continue to flourish, to the advantage of business and the students. One of the existing programs enables high school seniors to meet with company managers to gather information on career preparation; another provides career exploration programs.
Faced with a tightening labor pool for several years, Boston-area companies have already taken steps to broaden participation in the local work force. Through the Boston Private Industry Council, founded six years ago, more than 500 local employers now participate in a variety of cooperative ventures with city government to hire and train the unemployed and improve the quality of public education. Best known is the Boston Compact, a nationally acclaimed program to upgrade the quality of the city's public high schools.
The Boston Compact was born out of the mutual concerns of educators and business. Three years ago, when the Compact was signed, entry-level jobs in Boston were plentiful. The city's public schools, however, were doing a poor job of preparing young people for these positions: Only about one-third of the city's high school students could read at the national average or better, and nearly half were dropping out before graduation.
Under the Compact, the business community pledged to give priority hiring status to Boston high school graduates, expand its summer jobs programs for high school undergraduates, and support academic improvement in the schools. In return, the Boston School Department made a commitment to upgrade the basic skills of the system's graduates. At the heart of the Compact is the incentive it provides to young people: the promise of a job for those who stay in school and take their studies seriously.
Some people question whether the Compact will lead to significant changes in public education. I am optimistic for several reasons.
First, the Boston Compact is a collaborative program, under which each party is called on to do what it does best: educators to teach children and business to deliver jobs. Second, it is based on mutual, measurable goals. Finally, both parties are committed to a long-term effort. This third point is critical, since real change in urban school systems cannot be expected in time periods shorter than five to 10 years.
Expanding on the success of the Compact, government, industry, and community agencies in Boston have developed a program to address the needs of unemployed and disadvantaged adults. This $2 million project, called BostonWorks, will broaden existing training and job placement services to form a system that leads participants through the steps from basic literacy to self-sufficiency. Another component of the program provides advanced skill training for already-employed persons, who receive training for second-level jobs in accounting, data and word processing, computers, and office work.
What have we learned in Boston? The simplest lesson is that the unemployed are one of America's greatest untapped resources. Faced with a shortage of qualified workers, business cannot simply sit back and complain. In our own self-interest, and for the good of the nation, we must reach out to the neglected and the unemployed to find our future work force.
John McElwee, chairman and chief executive officer of John Hancock Mutual Life Insurance Company, serves as chairman of the Boston Private Industry Council.