HUMAN CAPITAL YOUR MOST IMPORTANT RESOURCE Principle #7: People’s skills influence their income. Objectives • Define human capital • Identify the skill requirements of the 21st century global economy • Recognize the relationship between education and training and a successful future Why is this topic here? • Students should recognize the importance of developing their human capital. • This topic creates a rationale for the course and answers the question why students are in school. • It personalizes the course. • If done properly, it improves student self esteem. • It explains the rules of the game. Your Human Capital • Skills • Knowledge • Experience • Personal qualities How you doin’? • Uhhh • We’re incredible • Hunksa’ • Hunksa’ • Human Capital You are the most important resource you have. • How you use you now will influence the control you have over your life forever. • The more you take advantage of school to improve your human capital, the more control you will have over your life. • To succeed in the 21st century global economy, you will have to acquire certain skills. Which house would you like? A B Which car would you like? A B Which Vacation Do You Want? Visit the folks A week at the beach Which Dog do You Want? Fang Skippy What Kind of Job Do You Want? A B How will you get From here to there? THE NEW LABOR MARKET That was then, this is now THEN BASIC SKILLS REQUIRED: ASSEMBLY LINE NOW GLOBAL COMPETITON, RAPIDLY CHANGING TECHNOLOGY The U.S. Economy Manufacturing Imagination Agricultural Information Knowledge Service Table I: Then and now The Industrial Age The Information/ Knowledge Age Technology change Took years to accomplish Months, weeks to accomplish Competition Global Local, state, national Type of production Manufacturing Service, info, knowledge Role of workers Manual Laborer Designer, engineer, manager Skill requirements Strength, dexterity, stamina Scans (see Table II) Employment Lifetime with one employer Learning span Kindergarten-12th grade Change jobs at least six times, careers three times Lifetime Get the Skills? What Skills? Table II: What Skills? Your Skills Strengths Rank Skill Category Description Basic Skills Thinking Skills Can you read, write, listen, and speak? Do you make careful, well-informed decisions? Do you know how to learn? Personal Qualities Are you honest, hardworking, respectful, and selfmotivated? Can you be trusted? Are you on time? Do you dress appropriately? Resources Interpersonal Skills Do you use your most important resource (you) well? Do you work well with others, are you a team player? Do you help others succeed? Do you get along well with people who don’t look like you, who may be from a different part of the world, or another neighborhood? Are you kind to people who might not be as talented or good looking or popular as you? Do you try to make others feel comfortable in your group? Systems Do you know how your family, your school, and your classroom work? Do you understand the system? Can you see problems with these systems and find ways to improve them? Information When you have to talk about things at school or at home, do you speak off the top of your head, or do you collect information before you make your point? Are you willing to listen to others when they present their facts? Can you tell the difference between facts and “stories?” Technology Are you up to date on the latest technology and are you willing to learn new ones? To compete in a global economy, you will need these skills Basic Skills • reading • writing • mathematics • listening • speaking Thinking Skills • Informed decisions • Benefit/Cost Analysis • Know how to learn Personal Qualities • Honest • Hard working • Respectful • Self-motivated • Trustworthy Resource Use Interpersonal Skills • Work well with others • Help others succeed • Get along with others who are not like you? • Kind to others • Try to make others comfortable Systems Information • • • • Do you have facts? Do you know where to get facts? Do you listen to facts? Can you tell the difference between facts and opinions (yours and others)? Technology • selecting • applying to specific tasks • maintaining and troubleshooting • keeping up to date • learning To compete in a global economy, you will need these skills Where will you get these skills? Why are you in school? • To improve your incredible human capital • To use your human capital and other resources to achieve your goals • To lead the good life • You are in school for YOU!!!!!! Dreams Deferred: Average Earnings and Education for Adults, 2008 100000 100000 91900 E a r n i n g s 90000 80000 67300 70000 60000 55700 50000 42000 39700 40000 30000 33800 Dropout High School Some College Associate's Bachelor's Master's Doctorate Professional 24300 20000 Education Source: U.S. Census Bureau, Statistical Abstract of the United States: 2010 Some Benefits of an Education • A college grad earns more than twice the lifetime earnings of a high school dropout • For African Americans, the unemployment rate of a high school dropout is 21% compared to 7.3% for college grads. • The percentage of high school dropouts living in poverty is 8.5 times that of college grads. • The incarceration rate of high school dropouts is 60 times that of college grads. Source: The consequences of dropping out of high school. Center for Labor Market Studies, NorthEastern University. October 2009 The Principle of Exchange Employers will hire workers if they gain more from hiring them than they give up. The Mirror: An Incredibly Powerful Package of Human Capital! You are the only one who can develop your human capital….. not your teachers, not your parents, YOU MAKE YOURSELF SCARCE!!!! High demand, low supply All other things being equal higher education and/or training leads to higher income Main Points • The labor market of the 21st century is characterized by rapid technological change, global competition, demand for highly skilled workers, numerous job and career changes, and constant upgrades of skills and knowledge. • The greater your skills and knowledge obtained through education and/or training, the higher your lifetime earnings. MAKE YOURSELF SCARCE!!!!