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!!!!