The economy has recovered since the recession, but people are still struggling. In many cities, the cost of living is shooting through the roof, forcing many people to move. The job market has recovered as well, yet the only problem is that most of those jobs that have been resurrected are unskilled, low-wage positions. All in all, it’s still tough out there.
Recovery came at a sluggish pace and with little help from policy makers who, rather than passing any meaningful legislation, opted to gridlock Congress and even shut down the government for a short time. Despite those setbacks, the economy has crawled its way back to pre-recession heights. When things hit a wall in 2008 and 2009, large swaths of the middle class disappeared, and the pace of a widening income gap hit a sprint from a gallop. For many families, the struggles have only grown more intense.
One way to help middle and lower-class families back on their feet is through an increased investment in human capital, according to some experts. What is human capital, you ask? It’s a term used to describe an employee’s skills and ability to adapt. During a speech from earlier in 2014, Jeffery Lacker, the president of the Federal Reserve Bank of Richmond, discussed how he thinks workforce development should not aim for short-term solutions, but be built as a long-term strategy for keeping people employed even in dark economic situations.
“Our research suggests that much of what we’re currently seeing in the labor market reflects structural trends rather than a primarily cyclical change in labor market behavior. That has prompted us to think about long-term strategies to prepare workers for the labor market. We’ve been thinking about workforce development at the level of the individual: What can be done to improve people’s skills and adaptability, what economists call ‘human’ capital?” he asks.
“This approach suggests that we may realize high returns from workforce development efforts, particularly those that encourage individual investments in skills starting at a young age. Workforce development should be thought of as more than just a short-term treatment — it also can work as a long-term vaccine that makes workers more resilient to changing labor market conditions.”