Over 16 million Americans fought in World War II, nearly 11% of the population. On June 22, 1944, Franklin Delano Roosevelt signed into law one of the most successful benefits programs in US history: the Servicemen’s Readjustment Act. It is more commonly known as the G.I. Bill.
Benefits included four years of educational support, including retraining and living expenses. It included loans to start businesses, buy equipment, and purchase new homes with no interest. It included job counseling and employment services. Not only was the bill incredibly popular, it is credited with the post-war prosperity boom that led to an enhanced middle class. Research also showed that recipients of the G.I. Bill were 50 percent more likely to engage civically and they were more politically active.
As of the week of April 20th, 2020, nearly 26 million Americans had lost their jobs or nearly 8% of the population. The unemployment rate is now over 20%. I think business and civic leaders would be well-served to push for a similar bill to support anyone who loses their position as a result of COVID-19, or perhaps even broader, to anyone who is interested in significant retraining or entrepreneurship at this time. Why?
What COVID-19 has made painfully obvious is what many leaders already knew. There is a significant mismatch between jobs available and the skillset of the workforce available. Automation over the next several years is going to make that even worse, particularly when a desire to avoid human contact could accelerate adoption of self-service options. It’s a key driver of income inequality and left unaddressed, will only get worse over time.
Prior to March, there were over 700,000 open jobs in tech and 1.3M in professional and business services. Even in the depths of COVID, nearly one-third of technology CEOs in Massachusetts are still hiring and Oracle was still on the top list of companies hiring. There were nearly 1.5M jobs requiring some aspect of health care skills, ranging from medical assistants to physical therapists to registered nurses.
Some of the sectors hardest hit by COVID employ a significant number of lower skilled workers, like restaurants, hospitality, and retail. While many of these jobs will return when restrictions are lifted, these sectors will most likely take the longest to recover. There just won’t be enough jobs for people without certain skills. We will still have many more semi-skilled and high-skilled jobs going unfilled. Job retraining for adults can work very effectively when coupled with cost of living stipends, child care, and life skills counseling and support. By giving everyone another option, you can direct people into a personal growth path and reduce the burden on unemployment over time. It’s better for people, it’s better for the economy and ultimately, it’s better for society.
In addition, the many talented individuals out of work are an incredible pool for entrepreneurship. The challenge will be finding funding to get started with many investment firms in portfolio triage mode. Well-structured new business grants or early stage equity investments, facilitated by public/private partnerships like the Massachusetts Clean Energy Center, could be a catalyst to unleash a wave of entrepreneurship.
Marc Andreesen of the venture firm A16Z wrote a powerful blog post last week called “A Time to Build.” He said, “Every step of the way, to everyone around us, we should be asking the question, what are you building?…If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you, and we need to get you into a position, an occupation, a career where you can contribute to building…We need to get all the talent we can on the biggest problems we have, and on building the answers to those problems.”
While supporting small business survival and enhancing unemployment was a critical first step, we should use the urgency of this crisis to create a COVID-19 version of the G.I. Bill and give everyone a path to build. To build up their skills for what will be needed in the future. To build a new company. To build new products and services that solve some of our greatest challenges. And ultimately to build a better working world.
Quote of the Week: Education is the currency that can purchase success in the 21st century.Barack Obama