Trump can bridge skills gap by changing tune on trade

Workforce development is the archetype of vital-but-unsexy issues. The Trump administration deserves credit for highlighting the potential of expanded apprenticeships and other forms of vocational training. Are they drawing the right lessons for a successful strategy? The executive order signed on June 15 suggests not.

More generally, one basic insight seems lost on them so far: The U.S. must remain committed to an open, rules-based global economy to prevent a chronic skills gap from sapping American jobs and competitiveness. 

A skills gap — i.e., when companies cannot find the right workers to fill open positions — is a triple whammy. People cannot find stable jobs that pay sufficiently to make ends meet. Companies cannot seize market opportunities. State and local economies suffer as tax receipts ebb and firms choose to invest elsewhere.

{mosads}Experts have long debated the size of the skills gap in the United States. The Department of Labor reports U.S. job openings are at a 16-year high. That sobering milestone owes to a diverse mix of factors, to be sure. But some of the main drivers, like automation technologies and complex cross-border value chains, are those reshaping employee requirements. The problem cuts across sectors but is especially daunting in more advanced areas, where the U.S. otherwise stands to excel in the coming years.

The private sector, state and local governments and educational institutions are on the frontlines of workforce training efforts. Calibrating the federal role in this ecosystem is a perennial challenge. Washington serves a valuable function by promulgating standard baseline requirements for apprenticeships to help ensure consistent outcomes. That in turn enhances marketability for both companies and employees. Congressional funding is needed to complement other public and private money for program implementation. 

Trump’s message on jobs has of course resonated with millions of Americans who feel economically victimized or otherwise disempowered by a global economy. Yet in focusing most of the blame on trade pacts such as the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership, his diagnosis is far off the mark.

Even Commerce Secretary Wilbur Ross, one of the most ardent backers of “America First” economics, sees the limits of trade-deal tunnel vision: “Not all the unemployment problems… are a result of NAFTA or any other trade agreement,” he said recently. “Some of them are due simply to increased automation… [and] artificial intelligence… And those are problems that will recur on an even broader basis in the years into the future.”

Ross soft-pedals the current impact of these other factors, but he is right that the toll will only increase. The corollary? Any presidential administration that professes to care about jobs must make workforce issues integral in its larger economic agenda.

Unfortunately, Trump’s new executive order on apprenticeships goes too far toward abdicating the important federal role in coordination and oversight of standards. It also is dubious how its envisioned scale-up of apprenticeships will fill the holes in current government and public-private approaches — to say nothing of the new holes created by the administration’s proposed budget cuts for existing federal programs.

Meanwhile, the White House has been silent on the crucial issue of transitional assistance for mid-career, specialized workers whose job prospects fade when their skills fall out of demand among employers. There is strong evidence that this segment is the least-served by current workforce training efforts.

Make no mistake — there is a significant link to trade here, too. It was illustrated plainly for Trump at a White House roundtable he co-hosted with German Chancellor Angela Merkel in March. German executives from the likes of Siemens and BMW explained how their trade and investment ties with the U.S. directly boosted local workforce development and economic competitiveness in Georgia and South Carolina. Such initiatives will be put at risk to the extent the U.S. becomes a less attractive, less reliable trade and investment partner. 

The signs on that score are bad. Already, the administration has alienated many countries by blaming them for all manner of raw deals and threatening to bring them to heel. Some of its underlying grievances are in fact legitimate and do warrant a tough line on enforcement. But tackling such cases on a unilateral or bilateral basis is rarely effective. The White House nonetheless seems poised to follow through on some of the more counterproductive steps favored by its protectionist wing.  

One particularly weighty decision is at hand as the Commerce Department presents President Trump with recommendations to address the national security effects of steel and aluminum imports. Overreaching could prompt retaliatory action by foreign governments, harming both business and consumer interests at home, as well as undermining the World Trade Organization. 

The current environment in Washington does not add much reason for hope. The White House is embroiled in controversy. Its legislative agenda is stalled. It is the kind of political environment that nurtures protectionist impulses. Indeed, officials are on record saying that when he’s on the defensive, trade is “a place where the president can really shine.” 

The question is whether he will fly too close to the sun. The smarter course would be to re-engage in the international trade and investment system, playing firmly but fairly, while broadening and strengthening the foundation for U.S. communities to adapt and compete in the global economy. Getting its workforce development ideas right, and leveraging them to change the narrative with key domestic and international audiences, would be a good place to start.

Nate Olson is director of the Trade in the 21st Century program at the nonpartisan Stimson Center, a Washington, D.C.-based think tank that aims to enhance international peace and security through a combination of analysis and outreach.

The views expressed by contributors are their own and not the views of The Hill.