The rate of unemployment and the lack of jobs have bedeviled Americans for over four years now. Although under 8 percent, the jobless rate remains stubbornly high and yet, there appears to be plenty of work - if you have the skills to qualify.

"There is a mismatch between the jobs that are available and the people that we are interviewing," explained the chief executive of a huge German engineering firm, looking to hire skilled manufacturing workers.

It is the same story wherever you go. If you can believe the Bureau of Labor Statistics, there was a shortage of 7 million skilled workers in America as of two years ago and that number is increasing. They are forecasting that shortage will balloon to 21 million skilled workers by 2020.

Most scholars will tell you that the lack of education within the American work force is behind these depressing numbers. To make matters worse, the average education of U.S. workers is expected to decline over the next 10 years, which will further widen the gap between supply and demand for skilled help.

Readers who have been reading my columns understand that the rising cost of higher education is now beyond the means of more and more Americans. At the same time, the vast majority of the work force is making less in 2012 dollars than their fathers did. One major reason for this trend is that low-wage work constitutes a growing share of the jobs produced by the U.S. economy.

The Labor Department forecasts that among the top 30 occupations that will add the greatest number of jobs between 2010 and 2020, 24 typically require only a high school degree or less. Only six occupations, among them registered nurses, elementary teachers and accountants, require more.

Yet scholars, politicians and pundits alike keep pointing to increased education as the answer to reducing unemployment. Many workers have dutifully followed that advice only to discover that many would-be employers now consider them overqualified. The jobs available for the most part are in openings for cashiers, home health aides, retail sales persons and the like.

Other jobs, such as long-haul truck drivers or manufacturing jobs demand a certain combination of skills that blend both technical as well as academic training. I believe as more and more college-educated workers realize that they must also incorporate some technical training in their resumes, those jobs will be filled. Many corporations are also realizing that fact and are providing training in those technical skills to new workers.

Most recent estimates indicate that the U.S. manufacturing sector is short roughly 80,000 to 100,000 highly skilled workers. That sounds like a lot but it is actually only one percent of the manufacturing sector's work force, according to the Boston Consulting Group. But it does represent almost 8 percent of the skilled workers in that sector.

When you delve into the figures behind the shortages, one realizes that only seven states show a real gap in skilled manufacturing labor know-how. Therefore, the skills gap is largely a local and not a national shortage. Much of the so-called shortage is of some corporations' own making. It is natural when planning a factory or plant in a new location to seek an area where the lowest cost wages and tax structure prevail. It was one of the reasons that foreign auto manufacturers selected the Deep South to establish their U.S. operations.

What companies fail to recognize is that a major reason for a region or state's low labor costs are the lack of skills and education provided by that work force. You can't deliberately locate your plant in an area that abounds with unskilled labor and then bemoan that same lack of skills.

Don't get me wrong, there is a gap in skilled labor in this country but it is not as large as some would have you believe. Hopefully, as time goes by, more and more manufacturing jobs will return to this country and as they do, those jobs will be filled by Americans. There may be a time lag, such as the one we are experiencing today, but the gaps will be filled and quickly.

In this brave new world of ours, it is no longer enough to simply offer the lowest cost product. Product innovation is now critical to a company's success. U.S. companies are discovering it is becoming harder to innovate when their manufacturing plants are half a world away.

Just look at the competition in hand-held devices, medical technology, and a plethora of other high-tech products, the highest sales go to the innovators with the most dependable products. But innovation doesn't stop there. Increasingly, even basic manufacturing products from wing nuts to autos are experiencing a transformation. Corporate teams of designers, engineers and workers on the assembly line find themselves collaborating like never before to produce a smaller, sleeker and more energy-efficient mouse trap, just like they did in the days of Henry Ford.

In order to do that, many companies are realizing that they need their manufacturing processes and factories closer to home. That realization is fueling an "insourcing" of jobs and manufacturing back to America. That's good news for the future of this country and its workforce.

Readers may recall my column, "Made in America Returns" back in June of this year. In that article, I attributed the renaissance in American manufacturing to lower energy and transportation costs here at home as well as the narrowing of labor costs between American workers and those unskilled workers of China and other emerging economies.

But that is not the entire story. A recent article in The Atlantic by Charles Fishman, titled "The Insourcing Boom," caught my eye. He chronicled the recent experiences of General Electric in transforming its defunct Appliance Park, Ky., manufacturing headquarters into today's cutting-edge producer of basic products like water heaters, refrigerators and dishwashers.

As a resident of Pittsfield, anything "GE" is of interest to me and my clients. Back in the day, Pittsfield was the headquarters of this red, white and blue manufacturing juggernaut. That is until Jack Welch, its former CEO, got it into his mind to ship most of our manufacturing jobs off to China and other cheap labor centers 30-some years ago. The same thing happened to Appliance Park. Both towns were devastated. Pittsfield is only now beginning to recover.

Appliance Park, on the other hand, is actually undergoing a revival of its original purpose, manufacturing American-made appliances, thanks to some recent discoveries by present GE management and its current CEO Jeffrey Immelt. After failing to sell the facility in 2008, management resolved to "make it work" at the huge six-factory complex. It soon realized that they could make highly efficient, higher-quality appliances here at home at a lower cost than could be produced elsewhere.

The key, as more and more companies are beginning to understand, to creating truly innovative products, regardless of their nature, at a reasonable price, is having all the pieces of the product creation puzzle in the same place. Over the past few decades that principle was lost and forgotten as U.S. companies rushed overseas to take advantage of cheap labor. In today's marketplace, however, cost is taking a back seat over quality and innovation; something more and more consumers are demanding and willing to pay for.

Input from those in the manufacturing process is becoming integral to engineering and designing a better, more competitive product. You can’t do that when your widget is being made on a Chinese or Indian factory floor in a different time zone, by workers who can't speak English. Although this trend should benefit our own workers, the question to ask is:

Is our workforce prepared for that challenge and opportunity?  In my next column we will address the issue of skilled workers, or the lack thereof, in America.

While politicians bicker over the "Fiscal Cliff," the government continues to borrow about $4 billion a day. The statutory ceiling on U.S. Treasury borrowing is $16.4 trillion and we will hit that number by year-end. Then what?

If Congress refuses to raise the borrowing limit, we can expect the government to run out of options to avoid a default sometime by the end of February 2013. If we default, even technically, the credit agencies are ready to downgrade our debt once again. You may remember the drama and hysterics that last year's debt limit crisis invoked.

For months, pundits predicted dire consequences if the rating of our sovereign debt was downgraded by the big three credit agencies. Foreign holders of our debt would abandon us, they said. Interest rates on all sorts of debt would skyrocket. There would be a stock and bond market crash. Standard and Poor's did actually cut our debt rating from AAA to AA-plus. Contrary to the predictions of these Cassandras, bond prices actually went higher and rates lower; so much for the vaunted power of our credit agencies.  

Readers may recall why that downgrade happened. Last year was the first time in history in which Congress turned what had been a pro forma vote to raise the debt ceiling into a hostage-taking crisis. In exchange for their approval, congressional Republicans demanded huge spending cuts. One can fault the president for going along with that game, instead of simply raising the debt ceiling on his own and dealing with the consequences.

But President Obama has made it clear that last year was a one-time event. He is insisting, as part of the Fiscal Cliff negotiations, that Congress relinquish its control over the debt ceiling. He is right, in my opinion. Using the nation's borrowing ability for political gain is unacceptable.

The 2011 debt ceiling farce also marked a turning point in a number of areas. It was the seminal event that reversed this country's priority from job creation and economic growth to austerity. It also resulted in the down grading of our nation's debt by a credit agency. It is also worth noting that S&P's downgrade decision was politically motivated.

The credit agency, in its explanation for its negative rating change, explained that based on the 2011 debt negotiations, that the U.S. government's ability to manage fiscal policy was "less stable, less effective, and less predictable."

In one of those paradoxes of history, going over the fiscal cliff would actually avert any further downgrade to our debt status. The expiring Bush tax cuts and automatic spending cuts across the board would do quite a bit to alleviate the stated default-related concerns of the credit rating agencies. The tax cuts would generate around $4 trillion in new revenues over the next decade. That is almost the exact amount most credit agencies are looking for in deficit reduction in order for our fiscal house to be out of danger.

Of course, going over the cliff and staying there will present the nation with another set of economic problems. Both sides agree that the combination of tax increases and spending cuts of that magnitude will both raise unemployment and slow the growth of the economy. It could actually tip us back into recession. One would think the risk of default for any nation would climb as a result.

Back in September, Egan-Jones, a smaller credit rating agency, downgraded American debt from AA to AA-minus, citing Federal Reserve plans to stimulate the economy (QEIII). They argued the plan would reduce the value of the dollar, do little to stimulate the economy and artificially raise the price of oil and other commodities. That would, in turn, hurt U.S. businesses and the consumer. They indicated that the risk of inflation, rather than the risk of default, was the justification for its downgrade.

In which case, if we do fail to come to a compromise, fall off the cliff and, as a result, experience a decline in economic growth and inflation, will the credit agencies actually revise their ratings upward? It would appear they would have to since the basis of their downgrades was politics and lack of fiscal austerity (S&P's reason) and inflation (Egan-Jones' argument). We will have to wait and see how this same group that missed the entire subprime debacle handles this one.

The Fiscal Cliff commands center stage. The nation's news media is dutifully reporting every syllable uttered by anyone even remotely connected to the negotiations. But what really matters is what is said behind closed doors between Washington's lobbyists and our elected officials.

Now that the elections are over, the debate (and agreement) among voters and parties that taxes should be raised and spending cuts must necessarily come down to the details. Those details and the devils that represent them (called special interest groups) are assaulting congressional offices with convincing arguments on why their constituencies should be excluded from either tax increases or spending cuts.

It is an old story. Theoretically, in America, I may agree that we should all suffer for the greater good of the country and the economy, as long as in reality "all" doesn't include me. In Washington, that concept prevails everywhere. A corporate coalition, for example, is lobbying to kill any tax increases in the dividend rate. That rate, currently at 15 percent, could go as high as 35 percent or more. They argue that raising the dividend tax will hurt seniors who depend on dividends as part of their retirement savings.

Of course, they neglect to add that the vast majority of Americans (low-and middle class investors) who own dividend stocks, own them in their retirement accounts, which are excluded from dividend taxes. I suspect that raising taxes on dividends will predominantly impact the 1 percent of America's most wealthy, but that's not part of their argument.

Readers, by now, are fully aware that the sticking point between Republicans and Democrats, as far as extending the Bush tax cuts, centers upon those earning $250,000 or more annually. The Democrats do not want to extend the Bush-era tax cuts to that group, while Republicans do. Instead, the GOP would like to focus on eliminating certain individual tax loopholes, arguing that they would be less harmful to businesses, jobs and the economy.

One loophole being discussed is the tax deductibility of home mortgages for either first or second home owners or both. There is some talk about capping that deduction, although to do so would impact many middle-class Americans as well as the wealthy, argues the homebuilding industry. Their lobby won't tolerate even a minor change in the mortgage interest deduction.

They contend that home ownership has taken the brunt of the decline in the nation's economy and is now only beginning to recover. Monkeying with mortgage deductions would throw housing back into a tailspin and with it the majority of homeowners in this country, according to housing advocates.

AARP, the top lobbyist for retirees, is also dead set against any spending cuts to Medicare and Social Security. Even minor changes such as slowing the cost-of-living formula for Social Security recipients or extending the age of Medicare eligibility is anathema to their constituency, retirees.

Wherever you look, from charitable contributions to energy depletion allowances, some group or another has a reason, sometimes rational, sometimes not, for why the axe should be spared in their case. It appears that where individual interests are concerned, posterity is taking a backseat among America's lobbyists and the populations and professions they represent. I suspect that if we expect our elected officials to compromise and avoid the Fiscal Cliff; Americans should first look at their own attitude toward compromise where our individual interests are concerned.

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.