Every business I know, big and small, is struggling with severe worker shortages. Sure, you can blame extended unemployment benefits, lack of child care and employee reticence to return to work in light of health concerns. All of these factors are part of the problem today. But we had these problems well before COVID-19. Even in early 2019, there were 7.3 million open jobs that needed to be filled.
So COVID is not really to blame for our country's ongoing worker shortage. What’s really to blame? Our broken higher education system and the greedy people at the very top running it.
Employers across the country are complaining about talent shortages. Microsoft and Amazon both recently warned that the lack of skilled workers will threaten their growth over the coming years. About seven in 10 companies reported talent shortages in 2019, the worst level ever, according to staffing firm Manpower Group, a level more than three times higher than a decade ago.
Should these companies be providing more training, as many experts suggest? Maybe. But why do they have to do that? If our country’s largest corporations, with all of their generous benefits and compensation, can't find skilled workers, imagine the problems small businesses (with fewer resources) are facing.
Because my own children are in their 20s, I have seen firsthand too many of their friends who have, after spending literally hundreds of thousands of dollars on meaningless degrees, emerge from college without any skills, certifications or licensing to actually do a job. I've watched naive young people (and their parents) get duped into paying for masters degrees that provide little to no benefit.
I too have suffered by paying through the nose for four-year college degrees that could easily have been accomplished in three years (a savings of 25 percent), when you take into consideration all of the unrealistically light class schedules and extended school breaks where my own kids spent more time at home during their college years than at their schools.
Colleges spend millions on luxurious dorms that offer amenities such as private theaters, housekeeping services, convenience stores and sound-proof music rooms. They’re profiting from gourmet dining hall experiences that include lobster bakes, waffle bars and steak dinners. They’re building state-of-the-art recreation facilities that boast fun activities such as rock-climbing, infinity pools, massages and, according to one report, “fresh fruit, smoothies, energy drinks, and protein bars to fulfill your workout needs.”
They’re paying chief diversity officers as much as $396,550 a year, which is just one of the reasons why their administrative costs have ballooned to almost twice as much as their spending on academics. They cut corners and save money by leaning on teaching assistants and hiring part-time instructors and adjuncts better suited for elementary classrooms than a university setting. In the meantime, the “real” professors I know spend more time outside the classroom than in it.
As a result, tuitions since 1998 have risen 180 percent, a figure surpassed only by health care costs and one that dwarfs the inflationary rise of housing and food. I pray for the poor parents of middle school kids who will face this nightmare in just a few years.
Aren’t these students entitled to a decent education taught by hard-working and competent professors for the $70,000 a year some pay for tuition? Am I missing something? And aren’t businesses entitled to expect a trained and skilled worker on the first day of their job instead of someone sporting an overpriced diploma that’s unable to use a basic business software application? That’s not happening. And it’s because of the way our universities are managed.
They have bloated infrastructures, overpaid professors, excessive benefit plans, outdated tenure systems and a host of other money-wasting expenses. Expenses that will soon be covered by taxpayers through generous stimulus funds and, if Sen. Elizabeth WarrenElizabeth WarrenFiscal conservatives should support postal reform Five Democrats the left plans to target Arizona Democratic Party executive board censures Sinema MORE (D-Mass.) and her colleagues find a way to absolve student debt, a clean slate for universities to continue their abusive and irresponsible behavior.
All of this affects my small business because it affects my workforce. Engineers, accountants, scientists and creative types, even at our finest colleges, graduate with only a rudimentary knowledge of their professions, a knowledge that must be further funded by even more training provided by the businesses that take a chance on hiring them. That's well and fine for the big companies that supplement these four-year degrees with internal programs and industry certifications. But small businesses can't afford that. So, we're stuck with unfilled jobs and unqualified workers.
Does it have to be this way? Of course not. Go ahead and forgive all that student debt. These kids are drowning in it. Go ahead and offer more federal assistance for those who need it. They deserve it.
But only do it after requiring universities to abide by new financial rules that restrict their careless behavior, wasteful spending and extravagant overhead. Eliminate tenure. Cap academic salaries. Make college degrees three years instead of four years like they do in the United Kingdom and Canada. (They work through the summers, can you believe it?) And most importantly, blow up the accreditation system, which is controlled by those very same universities, to allow other schools to provide better, more targeted education that provides their students with actual skills to graduate and get to work.
Taking these steps will go a long way towards reducing all of those unfilled jobs. But more importantly, it will provide a better trained workforce for all companies, big and small. Want to increase the minimum wage? Reform our university system and we'll all be happy to pay our workers more.
Gene Marks is founder of The Marks Group, a small-business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.