We've been hearing a lot of talk lately about setting up federal programs to help American workers learn up-to-date job skills so they can survive in the New Economy. That's exactly the kind of help they don't need. At best, a job-training program provides a set of skills guaranteed to become obsolete a few years after they are taught. Such is the nature of the New Economy. What's required is not job training but business training -- the kind currently being offered by the companies featured in this month's cover story, "A Company of Businesspeople." (See [Article link].)
By business training, I mean teaching people the basic financial skills necessary to understand how a company creates value and makes money. I mean showing them how to read an income statement and a balance sheet, and how to use such information to gauge the health of a company. I mean giving them tools with which they can figure out on their own how to contribute to their company's success and thereby create job security for themselves.
It is absurd to think that such skills are beyond the capabilities of the average worker. Most average workers already manage businesses of their own: their families. What wage earner today is unfamiliar with the concept of squeezed margins? What man or woman of modest means who pays the bills and balances the checkbook does not know the fine art of managing cash flow? What homeowner finds the concept of equity so elusive? What parent struggling to put a child through college cannot grasp the difference between an investment (a $20,000 tuition bill) and an expense (a $20,000 credit-card balance)? Business training is simply helping people who already have an intuitive grasp of the fundamentals -- make more than you spend (profit) and have enough money on hand to pay the bills (cash flow) -- apply those skills to their work life.
Training of that sort offers the only job security that means anything in the New Economy. To be sure, it helps to have technical skills, but they don't provide much security in and of themselves. These days, moreover, the most important (and marketable) technical skills are acquired on the job -- not in the classroom -- and must be refined continually, day in and day out.
All this seems to have escaped the attention of policymakers, probably because they have spent too much time looking at business from the vantage point of the law firm and the university. So come to think of it, maybe we should start this business training where it would have the greatest impact -- in Washington, D.C.* * *