Now it’s CNNMoney’s turn to spread the “can’t find workers” meme.
The headline reads “Northeast Indiana: Hundreds of factory jobs go unfilled.” There’s the counterintuitive top that talks about how even in a recession with high unemployment, manufacturers can’t fill their openings.
Then there’s the head of the Indiana Chamber of Commerce’s workforce development program—these types of sources are almost always in these stories and they’re often the flacks behind them—who talks about all the druggies and welfare bums filling out applications:
“Applicants are failing drug tests,” she said. “Some apply and then decide they want to wait until their unemployment benefit runs out before taking a factory job.”
That quote gets at a big hole in this story: There’s zero discussion of what kind of wages these supposedly unfillable jobs actually pay. Indiana unemployment benefits top out at $390 a week (pre-tax), and they only last six months. That’s the equivalent of a less-than-$10-an-hour job. In other words, if lots people are sitting home on the dole rather than taking jobs, as the Chamber of Commerce would have us believe, these manufacturing jobs probably aren’t paying that much more.
Take the main anecdote, a manifold manufacturer that needs 10 new workers and expects to get 500 applications for those jobs:
His challenge: “I’ll have to go through 500 applicants just to get the 10 that I need. And there’s no guarantee that those 10 hires will work out.
Well, yes. And? With a fifty-to-one application-to-job ratio, you’re going to have a lot of noise. But the company expects to hire its ten people, it just wishes it could find more perfectly qualified non-dope smokers in that surplus of labor. So has every boss ever.
If you’re a boss who can’t find qualified employees to work for you in a time of high unemployment, perhaps you’re not offering enough money. But CNNMoney doesn’t even mention wages.
The New Yorker’s James Surowiecki had a critical take on the skills-gap theory being pushed by industry in a good piece last month. He talked to Wharton’s Peter Capelli, who has been one of the most prominent critics of the meme and who pointed to an engineering firm that got 25,000 applications for a job and supposedly couldn’t find a single one that met its standards. Surowiecki:
…the bargaining power that companies have, thanks to the weakness of the job market, has enabled them to adopt very narrow definitions of what count as relevant skills… Businesses are holding out for a combination of John Nash and John Henry, and then complaining when no one fits the bill.
Surowiecki and Capelli point to the disappearance of on-the-job training as a culprit in the helpless-employer phenomenon. Three decades ago, employers trained their “young workers” an average 2.5 weeks a year. Now one survey found that “only twenty-one percent of the employees surveyed had received any training at all over the previous five years.”
Now if you can’t start up in a specific job with no training whatsoever, you’re not hireable. That’s quite a bit different than a structural skills gap. It’s a story about companies that don’t want to invest in their workforces—or who want governments to do it for them.