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WW US Economy The US economy is struggling and the consensus is that it needs to address its debt problem. Income growth tor the majority of the US workforce has been sluggish. Unemployment is

WW US Economy
The US economy is struggling and the consensus is that it needs to address its debt problem.
Income growth tor the majority of the US workforce has been sluggish. Unemployment is
rising. and between 120,000 and 200,000 new jobs need to be created every month to redress
this [IS-6.. More than ever, the United States needs productivity gains to drive growth and
competitiveness. However, there are several inter-related issues that need to be addressed
alongside any resolution of the debt crisis. Too few US workers have the right skills for more
attractive Jobs and the US talent pool is not growing fast enough to meet future demand. But
to achieve this the right infrastructure needs to be in place, including education and vocational
trammgiregulations, employment legislation (that also enables more skilled migrant workers
to partic1pate in labour markets), and various financial incentives and tax breaks for inward
Investment (bynon-US multinationals as well as US ones). However, to date the largest
productiv1ty gains have been in sectors that have seen large employment reductions. Whilst
the country remains the world leader in higher education (HE) particularly in relation to
engineering, seience and business practitioners, countries such as India are producing skilled
talent across several industrial sectors. The US school system is faring less well, particularly
in relation to maths and science (for instance, the US is tumbling down international tables in
these two subjects). The federal government plays a limited role in VET with principal
responsibility resting with individual states and below although the 19903 did see increased
promotion by central government of certified skills training in order to address skills
shortages (cg. electricians). Vocational education in high schools has been viewed
traditionally as an option for underachieving students to help them prepare for employment.
However, new models are now emerging which are not based solely on the needs of
employers but offer a more rounded education experience. However, many employers are
7 complaining that schools are not teaching basic skills eit‘ectively and that more needs to be
done to address the needs of lower-paid and lower-skilled workers.
US multinationals are finding emerging economies increasingly attractive and are thus
adjusting their strategies accordingly. At the same time these firms are facing increasing
competition from indigenous firms in emerging economies, especially China and India. The
primary reason US multinationals are increasingly investing overseas is because they want to
pursue growth opportunities (which are conversely lacking in the US). The most sought after
talent is in research and development (R&D); and this is why so many multinationals have
been off-shoring R&D to countries such as India. Senior executives have expressed
frustration at trying to find top talent in the US. The danger facing the US is thatwhen the
economy eventually picks up again a great number of workers will continue to remain trapped
in low-skilled/paid jobs and thus fail to enjoy any of the benefits of a recovery…There needs
to be a major investment in skills development to prevent this from happening. Unfortunately,
the US labour market has been slow to respond to these issues (in particular the shift from a
focus on physical capital to human capital).
Performance related pay is concentrated in higher-earning segments of the labour market
despite the fact that the shift to a service economy involves front-line JObS (indiVidual and in
teams) which are ideally suited to this type of reward strategy.
Case Study Questions
Within the context of HRM & SHRM answer the followmg questions:
1. To what extent does the US private sector need to work in partnership with the US
govemment/state governments? I
2. What are the other factors that may need to be taken into account?

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