There’s no shortage of uncritical reporting on the notion that employers, and particularly manufacturers, can’t find enough qualified workers even in a time of high unemployment.
Last week, even the auto industry was complaining about not being able to find enough qualified workers. A Crain’s Detroit Business headline said, “Auto leaders at Management Briefing Seminars still lament shortage of labor — especially skilled labor.”
The story got that headline despite reporting this in its second paragraph:
Employment in the automotive sector has fallen 51 percent since 2000, recovering only 15 percent since 2010, said Kristin Dziczek, director of CAR’s labor and industry group.
Even with a pool of hundreds of thousands of auto workers no longer in the industry, automakers complain of a labor shortage. Something doesn’t quite add up.
Which is why this Detroit Free Press story on the same panel was wise to focus on the skeptical reaction to those assertions. Its headline said, “Shortage of skilled workers is a myth, say auto management experts in Traverse City,” and it’s one of a handful of recent stories that ask harder questions about why employers say they can’t find workers.
The Freep quotes Michigan State professor Dale Belman saying that “there is not a lot of evidence there is a lack of skills” and putting the blame on “reduced employer training and over-searching for the exact fit.” It quotes a community college president agreeing.
USA Today pushed back on the skills-gap meme last week too, noting a stat that shows how companies have gutted their training programs over the last several decades.
The shift from extensive training began after the 1980 recession as companies became more cost conscious and intensified in the Great Recession of 2007-09. Firms also grew weary of paying for workers to gain skills only to watch them soon defect to competitors, says Susan Cantrell, an Accenture consultant.
Industry only has itself to blame for any lack of loyalty from employees, who have been laid off, outsourced, and offshored for so long that they’d be silly to count on a company for the long term (and don’t talk about “unstoppable” forces like globalization, which were spurred on by intentional political choices made with the support of business).
But that last sentence from the Accenture consultant is something of a tell. What do you have to do when you want to keep employees who get job offers elsewhere? Give them more money. Bosses never want to do that, and they sure don’t when the headlines are telling them there’s 8.3 percent unemployment out there.
The Star Tribune focused on this, more or less, the other day in a story that pointed to the job market for welders to show how, contra the law of supply and demand, wages aren’t rising:
To judge from the job listings, welders are in high demand.
Manufacturers across the Upper Midwest will tell anyone who listens that they have jobs to offer — 2,580 welding positions in Minnesota alone — but not enough solid applicants. They point to a “skills gap” between the jobs available and the people out looking for work.
Textbook economics says this should be good news for anyone who can strap on a helmet and make the sparks fly. If good welders truly are hard to find, employers should pay more to get them on board.
Yet that isn’t happening, leading some economists to question whether the skills gap is really the issue.
Unfortunately, the rest of the story is pretty weak—it never gets around to talking to those economists, for instance—but it does note that real wages for Minnesota welders are still below 2005 levels despite the current high demand for their services.
But it at least asked a critical question so often missing from skills-gap pieces.
I'm waiting for the story about the "skills gap" in corporate management and high-level policy-making. All the data point to a huge loss of skills in these fields over the past several decades, despite skyrocketing compensation.
Indeed, the more we pay them, the worse they get. Why is this not a story?
#1 Posted by Edward Ericson Jr., CJR on Tue 14 Aug 2012 at 11:23 AM
I agree with Mr. Erickson. There has been a profound erosion of management skills, and basic qualifications such as ethics and sense of responsibility, among the corporate management class. They get worse and worse every year.
But back to the welders. It used to be that the trade unions had extensive and rigorous training programs for apprentices. It takes a couple of years, at least, to gain journeyman status -- classroom time, on-the-job training with certifications along the way. It used to be that any employer could call up the trade union and ask for the number of skilled tradesmen that were needed, for as long as they were needed. And the employer knew that the employees had the requisite skills to start performing immediately. It was usually a mix of journeymen and apprentices. When a new skill in a given trade was needed, the trade unions and the manufacturers worked together to develop training for the new skill. And the skilled tradesmen earned decent wages -- enough to devote a career to the trade, raise a family, and have a decent retirement.
But manufacturers killed all of that. First they killed the trade unions, then they outsourced the training to the public schools, then they wrecked the school system. Now they expect workers to train themselves, I guess, and come on to the job fully prepared, and work for crap wages with no benefits for their entire life. When they are no longer useful, they get no pension, but rely on social security, which now they want to outsource to the hedge fund managers on Wall Street.
Poor manufacturers. This is the wholly predictable result of the policies they have been promoting all these decades. Maybe they should rethink.
#2 Posted by James, CJR on Tue 14 Aug 2012 at 11:23 PM
The UNIONS "killed all that".
They merged and colluded to make the cost of doing business with them prohibitively expensive and they worked to do anything to chain their members to a sinking ship in the face of both domestic and foreign labor competition.
Nothing except closed shop laws and union policies are stopping any person from joining any union of his or her choice.
The reason people aren't joining unions in droves is because unions quit being about workers and started being about politics.
#3 Posted by padikiller, CJR on Wed 15 Aug 2012 at 05:30 AM
You are predictably full of crap, padikiller.
#4 Posted by James, CJR on Wed 15 Aug 2012 at 07:59 AM
And a good morning to you, too, James....
When you've got entry level workers starting at $40,000 a year and older guys earning nearly $100,000 a year to drive a forklift in a failing factory, it is pretty clear where the blame lies, at least to me.
#5 Posted by padikiller, CJR on Wed 15 Aug 2012 at 08:44 AM
This is an interesting debate, but facts from various sources state that the skills gap is widening - and that educational programs, especially in career and technical education, can be particularly effective at developing workers and boosting student achievement. These are all available at the website for the newly created Industry Workforce Needs Council - www.iwnc.org.
The IWNC is dedicated to raising awareness of this skills gap, and advocating for CTE education and programming to fill the gap and sustain the American economy.
#6 Posted by Jason Sprenger, for the IWNC, CJR on Mon 20 Aug 2012 at 03:42 PM
Padi: $100k forklift driver? Where? Provide a name, please.
#7 Posted by Edward Ericson Jr., CJR on Mon 27 Aug 2012 at 01:42 PM