Decoding Wall St.: Is there a Skills Mismatch in the Labor Force?

One of the benefits of working in the financial services industry is access to information. After years of being in the biz like your two favorite decoders, Brian Sozzi and Nicole Lapin, the email box will get overloaded with reports from the smartest minds on Wall Street and around finance. Sure, occasionally, there will be an email with the line “Get Rich Quick, Buy a Penny Stock” or “Marry Me”, but for the most part it’s an onslaught of PDF documents (be smart: Adobe is responsible for PDF files…you could pull up their stock on Yahoo Finance by typing in “ADBE”) explaining economic developments or laying out a future currently unforeseen development. Over time, one gets pretty good at picking and choosing who to listen to; a favorite of ours happens to be a friend as well, Chief Economist at Wells Fargo John Silvia. Unlike many accomplished economists, John tends to write in the spoken English language in trying to drive home key, bigger picture economic themes (one chief role of an economist). However, we did find ourselves taking as common knowledge something John wrote recently. As soon as we realized that, it was a short reach for our decoding glasses.

Findings of a Quote Worthy Wall Street Economist

“The current mismatch between skills in demand by firms today and the absence of qualified workers in the labor force is not a new phenomenon, but the trend has become more pronounced since the last recession.”

Decoded: The recession of 2008-2009 hit many companies like a tornado. Demand for goods and services were vaporized, sparking mass layoffs. The former truck driver that landed a pink slip in 2008 has since been washing cars, which has eroded his skills as a truck driver; he naturally has not kept up with new technology because he was washing cars to pay today’s bills. So, as new trucking jobs arise, it’s the younger worker or the one who was able to return to school to acquire enhanced skills that are snagging the gigs.

Or, say a person was a lifetime secretary only to get canned in March 2009 (sound smart: stock market hit “bottom” that month) and replaced by a computer. Unable to financially return to school, the person is left with only lifetime secretary skills in a job market requiring much more versatility.

What John does not mention, but we will, is that a skills match creates what Wall Street insiders call a “permanent underclass”, essentially people who earn less than their potential for X amount of years (maybe for the rest of their lives). In turn, this limits the potential growth an economy.

To receive the entire newsletter for today, send email to newsletter@decodingwallst.com.

Based on the book co-authored by former CNBC anchor Nicole Lapin and Wall Street analyst Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On FaceBook and Twitter, Decoding Wall St. releases unique streaming content daily, as a compliment to the newsletter, to help get you through interviews right on down to after work cocktail parties.  For more information, including to join the movement, please visit www.decodingwallst.com.