Drop to 498,000 Unemployment Claims (05-06-21)-Industry Innovation and New Labor Skills Needed

When economies speed up they will experience a need for additional labor power to fill open employment positions. Considering national growth improved 6.4% GDP in the first quarter of 2021 there will be a net draw from the current unemployed population leading to a decline in new unemployment benefit filings.  It seems that we have plenty of excess general labor but might not have enough specialized labor for certain fast developing industries. Thus, the labor market will also likely see uneven recovery with those skills in high demand experiencing increased wages while those in unskilled labor not moving up as fast. In general, if the trend continues upward you could see increased wages in certain emerging post-Covid industries.

You can get more details in DOL's May 6th, 2021 Press Release HERE. 
 

I'm really looking at the general trends of employment/unemployment and market adjustments in the type of jobs that were shifted as a result of COVID (...and increased digital transformation of markets). I'm doing a thought experiment on an in-progress theory on innovation clusters and innovative development. You can read an unedited working paper HERE. Commanding strong wages also means we will need train workers to meet emerging market demand to further feed industry growth(See Theory of General Equilibrium). As a nation, if we are considering re-developing our export orientated manufacturing capacities then we will also rely heavily on supplying the market with new skilled labor competencies that come through our educational systems (i.e. things like focusing on STEM or further developing online education or developing more effective learning systems.)

As innovation catalyzes market change through new products/services (See Theory of Economic Development) it will also influence which countries will likely see improved labor markets and which one will not (...perhaps an opportunity to shift the global market in U.S. favor? 🤔).  A study in Applied Economics on export innovation and skilled labor demand helps to show that needs for skilled labor rises when there is a new product, production method or expenditures on R&D (Aboushady & Zaki, 2021). Innovation creates "skill premium" driven by "skilled-biased technological change" which could impact skilled labor in ways that haven't been seen since the Model-T rolled off the assembly line.

Key point: Innovation (and even more so in manufacturing) leads to greater opportunities for skilled labor.

Since industry innovation and skilled labor supply are intertwined, the model I'm working on uses the local community college as a cluster resource for development of advanced skilled trades inputs in emerging industries such as space, military, outdoor equipment, etc... (Putting together industry collaborators could not only innovate existing industries but also possibly develop new industries. See Multi Cluster Delta County and See Transactional Subfactors.) Encouraging industries to develop innovative momentum through clustering can also reduce the impact of negative constraints through proximity (virtual, physical, both) (See Theory of Constraints) and in turn the lead time it takes to invent and sell products (Encouraging faster adaptations that can impact market dominance). 

Nora Aboushady & Chahir Zaki (2021) Do exports and innovation matter for the demand of skilled labor?, International Review of Applied Economics, 35:1, 25-44, DOI: https://erf.org.eg/app/uploads/2018/02/Chahir-Nora.pdf

DOL May 6th 2021 Press Release by Dr. Murad Abel on Scribd