As the unemployment rate drops toward full employment, the growing skills gap between business and labor is becoming a huge problem in this country. Fully 80 percent of manufacturers and small business owners can't find qualified staff.

Over the years, I've written several columns about this growing problem, but now the economy is picking up and unemployment, at 5.1 percent, is coming close to full employment. Both corporate and government leaders are realizing that in in some industries, such as utilities and aerospace, the skilled labor shortage may hamstring America's ability to do business in the years ahead.

The Harvard Business Review estimates that 47 percent of all new job openings over this decade will fall into the middle-skills range. Middle-skill jobs usually require postsecondary technical education and training and, in many cases, require college math and science courses if not a degree in those subjects.

Although the manufacturing sector today only represents 18 percent of total GDP, every dollar spent in manufacturing adds $1.37 to the U.S. economy. And every 100 jobs in that sector create an additional 250 jobs in other sectors that support manufacturing. The vast majority of manufacturing executives believe this growing skills gap will impact their ability to meet customer demand in the future. They say they are ready and willing to pay well above market rates for qualified employees, yet six out of 10 positions go unfilled.

Back in the day, skilled workers had two avenues to obtain marketable work skills. They could learn on the job through a cooperative apprenticeship system developed by management and company unions. But as unions declined (less than 12 percent of the total U.S. work force is represented by unions), so did the system of this on-the-job training. At the same time, the landscape has changed from gradual and incremental upgrades easily learned on the job to new skills requiring a quantum leap in technical and behavioral understanding. Things like problem solving, communication, teamwork and leadership.

That's where the second avenue of learning new workplace skills would be useful. Colleges were supposed to be the place where young people can absorb these massive breakthroughs and develop the rules necessary to excel in a modern-age professional work life. We were told to major in a field that suited our interests and talents.

Unfortunately, thanks to a high school system that has failed to adequately prepare our students in science and math, plus an American prejudice against just about anything that was not in the liberal arts field, fewer and fewer college students choose a career that is needed in the job market. Over the last two decades only 15 percent of U.S. college graduates majored in science, technology, engineering or math and that, my reader, is where the jobs are.

As the gap widens, a number of initiatives between government, education and the private sector has sought to remedy the situation through training and hiring of graduates, so far with varying degrees of success. The old system of apprenticeships, although trial-tested, is difficult to maintain, given the small number of unions remaining throughout the country.

In-house job training has also been met with some success in major corporations that have the time and money to bring a new employee up to the level of skilled competence necessary for their job requirements. However, small businesses, the main engine of employment and prosperity in this nation, do not have the time, money or number of skilled employees necessary to teach and/or train the unskilled employee.

A crisis always seems to light a fire under those who know what to do, but have just not got around to doing it yet. I think we are getting quite close to the point where everyone in the private and public sectors is going to have to roll up their sleeves and focus on this issue.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

As traders steel themselves for next week's Federal Open Market Committee meeting, the stock market remains volatile with a bias toward the downside. That should change for better or worse by next Wednesday.

Whether the Fed raises rates or decides to pass for another month or three, I expect traders will use the decision as an excuse to buy or sell the stock market. I normally key off what the bond players think about the Fed's actions and they put the probability of a rate hike at 30 percent.

The odds are low largely because inflation continues to be practically non-existent. The rate of inflation is one of the Fed's twin mandates, the other being employment. Clearly, the jobs picture has been improving all year. So the signals are mixed. Given that the central bank is determined to err on the side of moderation when raising rates, why not wait a little longer before hiking rates?

In addition, although a small rate hike here in the U.S. would have little to no impact on the economy; it does have implications for global currencies, trade and emerging markets. I have referred in the past to the "carry trade." That's an arbitrage investment that many large institutions use on a global basis. They borrow in cheap or declining currencies and invest it in strengthening currencies and bond markets. A rise in rates (even a little one) does and will impact this carry trade. It will also impact exports, imports and, by extension, the economies of various nations.

The International Monetary Fund (IMF) is well aware of this risk. It is the main reason why its Managing Director, Christine LeGarde, has urged our central bank to delay a rate decision until next year. She feels that the global economic conditions are just too fragile at this juncture to sustain a rate rise from the world's largest trading partner. She has a point. Neither the world, nor the Fed, really wants to see the dollar strengthen any further in the short-term. A rise in our rates would do that.

Wall Street would have us believe that the present volatility and uncertainty among stock markets would also be a big deterrent to hiking rates right now. I doubt that. The Fed would not be overly concerned if the U.S. market moved up or down 3-4 percent in the short-term. I'm guessing that you might feel differently about that.

By now, most of us are starting to cope with the newly-found volatility of the markets. For the first seven months of the year, the indexes traded in an extremely tight range. Since then we have been making up for lost time. The CBOE Volatility Index, which measures perceived risk, has jumped 120 percent over the past month.

Consider that over the last 15 trading days alone we have had 11 "all or nothing" days when greater than 80 percent of the stocks in the S&P 500 Index moved in the same direction, higher or lower. That compares to only 13 such days over the first 159 trading days of the year. It indicates that investors are far more concerned about the risk of the overall market than they are about the fortunes of any individual stock. That concern continues today.

It appears to me that the markets will trade aimlessly until the middle of next week. The bears will position themselves around a probable rate cut and a fall in the markets, while the bulls will do the opposite. Whatever happens, the fireworks will be at best a short-term phenomenon. Since no one really knows what decision the Fed will make, the best thing to do is nothing.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

A stream of destitute refugees arrives on European shores every day. Greece, Hungary and Italy have borne the brunt of this migration, but the ocean of displaced persons this year has already swamped their resources. It is a life and death crisis that demands an answer now.

Unfortunately, the European Union is neither accustomed to, nor organized in a fashion that allows for rapid decision making, especially when it comes to political problems like this. Something as knotty as what to do with the influx of over 500,000 illegal immigrants over the past year has taken European leaders out of their comfort zone.

Normally, a long process of consensus-building among EU members is necessary before political or economic decisions can be implemented. As an example, think of the time and effort that was necessary to bail out Greece. But this emergency won't wait. The drowning of hundreds of migrants in April, the discovery of a truckload of dead refugees in Austria last month and the recent front-page photo of a dead 3-year old immigrant in Turkey underscore the fact that political dithering means additional lives lost.

Faced with public outrage, the European Commission's President, Jean-Claude Juncker, proposed a plan to redistribute 160,000 refugees across the European bloc. The plan must be approved by a qualified majority of EU governments. Even before countries vote on the plan, it is obvious to everyone that it falls far short of a solution considering the numbers of migrants expected to descend upon the continent.

Many of the immigrants are political refugees from the Middle East (mainly Syria, Afghanistan and Iraq). For several years, we have all watched on the nightly news the plight of these refugees living in squalid camps in Turkey, Lebanon and Jordan. At this point, however, these countries cannot take any more refugees, nor do they have the resources to care for those in the camps.

Lebanon, for example, has taken in one million refugees. Given that their entire population amounts to 4.5 million, the overload of immigrants is destroying that country. GDP is expected to decline 3 percent this year as the government and economy collapse under the weight of refugees. Faced with starvation or worse, many of these camp migrants are escaping to Europe with the help of smugglers.

Part of the problem within Europe is the routes used in smuggling these immigrants into the EU. The Mediterranean gives smugglers and others easy access to Italy and the Greek Islands. From there, refugees travel over land in pursuit of economic opportunity wherever they can find it. Countries such as Germany, Finland, France, Spain and Great Britain are attractive end points for these immigrants.

Faced with already high unemployment rates, slow to no-growth economies, and overburdened social spending programs in many cases, European countries are not in the kind of economic shape to support an influx of destitute migrants. Many governments (and voters) believe these new arrivals will simply add to the strain they are already feeling. In Eastern Europe, religious and cultural differences have created a backlash against accepting any migrants at all.

In addition, many European countries have little or no experience in accepting and processing refugees, which makes an EU Pan-European approach that much more difficult to implement.

Europe has faced and managed emergencies like this before. The Yugoslav wars of the 1990s and influx of Vietnamese "boat people" are just two that come to mind. Yet, the number of migrants seeking asylum in Europe today is higher than at any time since World War II. Meeting this challenge will test Europe like never before. Let's all hope that Europe's politicians are up to the task. Otherwise this crisis will only get much, much worse.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

What's good for Main Street is not necessarily good for Wall Street, at least in the short-term. As traders fret over a new era of rising interest rates, American workers may finally be coming into their own.

The 5.1 percent unemployment rate, coupled with a 0.30 percent increase in wage growth has convinced stock traders that the Fed will raise rates this month. Over the past five years, investing in the financial markets was a one-way street. It didn't matter what the economy did, it was all about lower interest rates. The lower rates fell, the higher the market climbed. As the Fed prepares to reverse course and hike rates, investors are facing a brave new world and are nervous about that.

It will be a world where economics and its inevitable dislocations, will impact market valuations. Inflation will come back, as will wage growth, and productivity will start to matter again. As they have throughout history, interest rates will determine what investors are willing to pay for other financial assets. The end of massive central bank intervention will allow the American markets to function as they have in the past. Are we ready for that?

Yes, you may say, five years is long enough for all this government meddling. Of course, the flip side of that coin is that without the Fed's "put" on the market, we have to assume the risks of the marketplace. For me, personally, I'm fine with that. I cut my teeth in those kinds of markets and grew up in this business using all those historical metrics that have not worked very well since the Fed started intervening in the markets in 2009.

Plenty of people have explained the so-called reasons for the present turbulence in global financial markets. It's China, it's the Fed, or slowing global growth. Declining prices for oil and other commodities also make the list. All of the above may be true, but it strikes me that this is a correction that is looking for a reason. Sometimes there is just no "because ..." and I think this is one of those times.

Over the longer turn, history has taught us that what is good for our economy will also be good for our stock markets. Any discrepancies are usually short-term in nature. This is the crux of the matter. We all know that the typical investor's time horizon has grown shorter and shorter as a result of the internet, the media and our own expectations of what we expect from life. Most of us want it now and we become mightily distressed when that doesn't happen.

Why the lecture? In my opinion, all that is happening in the markets today is a sorting out of the potential risks we face in the near future. Are the markets correctly valued in a rising interest rate environment? How strong will the economy grow and how soon? Will the unemployment rate drop even further, maybe into the 4-plus  percent range. What will that mean? The "what-ifs" are endless, but that's what makes a market.

I suspect it will mean a return to the old ways of doing business. High-frequency trading, computer algorithms and the intensely short–term mentality in the narrow-minded corridors of Wall Street will have to change. As long as the Fed "had our back," traders could take all the risks they wanted. I'm betting that without that safety net, the casinolike element of the stock market will slowly subside. That will be a good thing for you and me.

I wrote last week that readers should expect continued volatility over the next several weeks. I remain convinced that we will re-test last Monday's lows (and possibly even break them). If we did, that would create a last burst of panic and lead to a final washout.

Don't try to trade this correction. Given the 200-point daily swings of the Dow, if the markets don't scare you out, they will wear you out. Instead, start practicing your long-term perspective. Just give the stock market time to digest this transition. Your portfolios are going to come back by the end of the year. Focus on what's really important over this holiday weekend.

The economy is finally picking up speed. Wage gains are accelerating and employment is close to full capacity.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

United States demographics indicate that the senior population in this country is growing at twice the national average. As more and more Baby Boomers retire in the years ahead the demand for senior housing is set to skyrocket.

Independent living facilities, where the elderly are still active and relatively healthy, are driving the growth in the overall retirement market. Occupancy rates have reached 91.3 percent and the overall growth rate in this sector is averaging about 6 percent a year. Since seniors will represent 20 percent of the U.S. population by 2030, according to the U.S. Census Bureau, this segment of the housing market will continue to grow.

The demand for these communities will continue to rise by the 500,000 people a year who will hit the age of 65 in the years to come.

Although the vast majority of Americans over 50 years of age still want to remain in their homes indefinitely, that may not be possible as health and other factors force them into alternative living styles. And the so-called nursing home business has been given a bad rap (and deservedly so), thanks to decades of accounting scandals, operational issues, excessive debt and poor, regimented living conditions. The good news is that this industry, that so many of us fear, is actually getting a facelift.

Surviving players and new entrants in the senior living industry have acquired a better understanding of what make seniors happy. They have adapted programs and amenities that are starting to attract the elderly. Back in the 1960s, when retirement communities were first built, big was beautiful and some developments numbered 25,000 homes or more. Today, planned developments range from 20-30 units to as large as 300-400 units, but rarely larger than that.   

The cookie-cutter approach has all but disappeared and in its place is a focused customizing strategy that transforms each new resident’s experience within the senior living community into something uniquely their own. There is also a renewed emphasis on home ownership rather than renting, since 80 percent of seniors, age 65 and older, are accustomed to being homeowners rather than tenants and they want to keep it that way.

The senior housing market is normally divided into several categories ranging from active adult communities, which are typically condos, co-ops or single-family homes with minimum or no services offered to those who are less active and may have more difficulty with routine housekeeping might prefer independent living facilities that supply everything from meals to organized group activities.

Seniors who find themselves needing personalized support services but do not require nursing home care might choose multifamily properties in an assisted living facility. Skilled nursing facilities and continuing care retirement communities provide hospitallike levels of care mixed with large numbers of independent living and assisted living units.

However, the days of long institutional hallways filled with drab rooms and silent residents watching visitors walk by are long gone. Instead, expect to see beautiful resort-style communities that offer residents exercise classes, fitness rooms and amenities and services that you might see at a luxury resort or on a cruise ship. Monday it may be cooking classes offered by an in-house chef. Tuesday could be golf pro lessons on the community links. Some communities have their own broadcast stations, social media sites or newspapers, with residents taking an active part in producing the news or entertainment.

As the population grows older it is also growing smarter. For the most part, seniors are more educated than ever before. They know what the future holds and are more willing to take control now. Moving into a beautiful senior living community at a younger age is making more and more sense to a growing segment of the elderly population.  I expect that trend to continue.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.