The unemployment facts we'd rather not face

September 8, 2011: 12:39 PM ET

The harsh reality is that many job applicants can't find work because they aren't qualified for today's open jobs.

By Geoff Colvin, senior editor-at-large

FORTUNE --  It's a mystery that begs for a solution: Unemployment is the No. 1 issue in America -- yet virtually all business people I talk to complain that they can't find the workers they want. When President Obama presents his jobs agenda to the nation this evening, listen carefully for him to address this issue. If he doesn't, he's missing a large element of our problem. (Update, 9/9: The President didn't talk about this phenomenon in his speech, nor does his proposed American Jobs Act address it. But we have to face it, because it's a large element of America's economic problem.)

The mystery begins to clear up after taking a close look at the state of U.S. workers, especially young workers, who have the highest unemployment rate of all; among those aged 16 to 19, it's 25%. The harsh reality is that even when jobs are available, many of these job applicants aren't ready for them. They aren't getting hired because they often aren't worth hiring.

Nobody wants to talk about this now because it sounds like blaming the victim. And it's important to say what is obvious, that unqualified workers are far from the only factor in our miserably high level of unemployment. But it's also important not to ignore this factor just because confronting it is painful.

An alarming view of prospective young employees comes from the Defense Department, which has found that 75% of Americans aged 17 to 24 are not qualified to serve in the armed forces. There are three main reasons.

First is inadequate education. About one-quarter of the cohort haven't graduated from high school, and about 30% of the high school graduates who take the Armed Forces Qualification Test, a test of basic reading and math skills, fail it.

Second is criminality. About 10% of the group has been convicted of a felony or serious misdemeanor at least once.

Third is physical unfitness. About one-quarter of the cohort is too overweight to join the military. Others have drug or alcohol problems, asthma, sight or hearing problems, or mental health issues, or they've recently undergone treatment for ADHD. Combine those issues, and over half of young adults can't join the military because of health problems. Research from the Centers for Disease Control and Prevention finds that the health of 18-to-29-year-olds hasn't improved in years and, by some measures, is deteriorating; smoking, drinking, and inactivity remain prevalent.

A group of retired generals and admirals called Mission: Readiness has publicized these facts out of concern for our national security. As they state in their report on the situation, they're worried that America won't have "enough qualified men and women to defend our country." But it isn't hard to see how the same factors are important on an even broader scale.

As the generals and admirals say, the U.S. "needs competent, healthy, and educated individuals to staff the world's most professional and technologically advanced military." But why stop with the military? If America wants its economy to be as good as its armed forces, then the same requirements apply to young people looking for private-sector jobs. And the Pentagon is telling us that some 26 million young adults don't meet the requirements.

When workers aren't ready to work, employers have to train them. That increases employment costs -- a significant hindrance to hiring when companies are skittish about adding any new workers.

To find hope for the future, just look at many of the young people who don't fall into the unqualified group. We all meet them every day -- awesomely bright, accomplished young adults who will clearly achieve great things. When I look at the young new employees at Fortune, for example, I give thanks that my 22-year-old self from long ago doesn't have to apply for a job today.

Young American workers can still stagger us with their abilities. But so many have fallen behind the demands of a modern economy that they can't get jobs. The problem won't be fixed quickly. Mission: Readiness calls for more and better early education, which is indeed highly effective -- but we won't see results for 15 or 20 years.

The unpreparedness of many prospective workers is another reason that America's unemployment problem will get better only slowly. Blaming the victim? No, it's confronting reality.

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