Don Cunningham: The Economic Lesson of Napoleon Dynamite

By Colin McEvoy on October 11, 2017

This column, written by LVEDC President and CEO Don Cunningham, originally appeared in The Morning Call and on the newspaper’s website on October 11, 2017. (Click here to read Cunningham’s previous columns.)

Don Cunningham

Don Cunningham

There’s a scene in the 2004 cult classic film Napoleon Dynamite set in rural Idaho where two awkward and alienated teenagers discuss what it takes to land girlfriends.

Girls only want boyfriends who have great skills,” Napoleon Dynamite, the movie’s central character, tells his buddy Pedro. “I don’t even have any good skills.”

He proceeds to list his shortcomings.

“You know, like Nunchuck skills, bow hunting skills, computer hacking skills.”

It seems a funny, nonsensical list. But, hey, I didn’t live in rural Idaho at the start of the 21st century. Maybe flipping around Nunchucks for self-defense and hunting with a bow did matter in the mating game.

My wife seems quite pleased if I take out the trash, put down the toilet seat and maintain a steady income.

Employers require a bit more.

Skills are the pathway to economic opportunity in the 21st century American economy. There was a time when a strong back, a good work ethic and a very basic education were good enough to achieve a middle-class life in the American economy.

We all wish this could still be the case. It isn’t. And it’s the root cause of most of the anger and angst that exists today across America’s social and political landscape.

Without skills, education and very specific training, it’s hard to do more than just get by in today’s economy. When people can’t do what their parents did – when those opportunities disappear – they get frustrated, confused and angry. It’s understandable.

This issue was paramount during the last presidential election. But defining the problem is the easy part. Solutions are more difficult. And, so far, there has been little relevant discussion regarding solutions coming out of Washington, D.C.

The Fed’s workforce efforts

There is some excellent work, however, being done by a less-than-expected entity: the Federal Reserve System of the United States, including the 12 regional Reserve Banks and the national Board of Governors.

We most often associate the Fed with setting interest rates, trying to check inflation, and making capital available, all of which is done under a mandate to help create the right conditions for economic growth in the United States.

Developing workforce skills for American business and creating opportunity for American workers are two of the most critical issues today for Americans and U.S. employers. Therefore, the Federal Reserve Banks are engaged in a three-year effort to address the issue.

“We are in the business of creating the conditions for economic growth,” said Patrick Harker, president and CEO, Federal Reserve Bank of Philadelphia, during a national meeting of the Reserve Banks and the Board of Governors in Austin, Texas.

The Fed called the gathering to release some research and to discuss workforce development needs, opportunities and best practices with about 300 Fed executives and staff, business and industry leaders, academics and workforce development practitioners. I was fortunate to be there representing the Lehigh Valley.

It all centered on a simple premise, summed up in the first sentence of the new Investing in America’s Workforce report: “In order to excel as a country, Americans must be able to successfully participate in the labor force, and employers must be able to access the type of talent they need for their work to thrive.”

Today’s manufacturers want skills

There was a time when that could be done without studies and action plans. My dad graduated Bethlehem Liberty High School in 1964. He took his diploma and walked into Bethlehem Steel Corp. and said, “I’m here.” He brought a strong back, a work ethic and a willingness to get covered in graphite and dust. They paid him a living wage with benefits and a pension. It was a simple system. Good for worker and employer. Today, that’s not how it works

Most manufacturers today aren’t looking for strong backs – machines do that – they want workers with skills. And, most employers are less willing, or can’t afford, to provide the training. The expectation is that you will arrive with the requisite manufacturing and trade skills.

Part of the problem that caused today’s skills gap is that for too long families heard that college was the only pathway to economic opportunity. In addition, they were told American manufacturing was dead. You can’t blame people from pulling back from vocational and technical training.

“We don’t have enough people going into these pathways because we’ve become a nation that tells kids the only way to become successful is it to get a four-year college education,” Katherine McClelland, director of education and workforce, at the National Association of Manufacturers, told a panel discussion during the forum. “And, then for many people sitting on the sidelines, they’re being told that you need more skills but how do you get them?”

Guidance counselors were not a popular profession during the discussions. Neither were federal and state education grant and loan programs that help to finance any major at a four-year college but not welding programs or vocational and technical certificates.

Lehigh Valley’s resources

Fortunately for us in the Lehigh Valley we have three great vocational and technical high schools and two community colleges that offer training to teenagers and adults. We just need more courses, better alignment with industry needs and more interested students. The region’s Talent Supply Council of educators and employers – and this fall’s region-wide skills gap study – will help us better align.

We are also fortunate in the Lehigh Valley to be near full employment for our non-skilled workforce, those with less than a high school diploma or a diploma with no vocational and technical certificate. That’s because we’re an industrial and logistics center with fulfillment and e-commerce jobs that pay $15 per hour. Interestingly, the Lehigh Valley’s effective market rate minimum wage is higher than any government mandated, or discussed, minimum wage, if you’re willing to work in a warehouse. But, that still translates to only about $30,000 a year, which leaves you barely scrapping by.

The short answer to increase economic opportunity and output right now is skills development. Goofy Napoleon Dynamite knew that as he pursued a girlfriend in rural Idaho. The Federal Reserve is helping us to identify and accelerate the process for American workers and employers.

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