In a time when millions of American workers can’t find work, it’s only natural to be intrigued by counterintuitive stories that claim American companies can’t find workers. I like to imagine the newsroom conversations go something like this:
EDITOR: Meh. I’ve read 10,000 stories on how Americans can’t find work, Scoop. Find me some news.
REPORTER: Well, say, what about a story on the handful of companies who can’t find workers to do skilled labor at the wage the companies want to pay with no training? Whaddya say, Chief?
EDITOR: Now you’re talking, kid. Get me thirty inches by Friday. Now scram, see!
HOLLAND, Mich. — This stretch of the Rust Belt might seem like an easy place to find factory workers.
Unemployment hovers above 9 percent. Foreign competition has thrown many out of work. It is a platitude that this industrial hub, like the country itself, needs more manufacturing work.
But as the 2012 presidential candidates roam the state offering ways to “bring the jobs back,” many manufacturers say that, in fact, the jobs are already here.
What’s missing are the skilled workers needed to fill them.
What’s going on here? The Post writes that the laid-off workers don’t know how to operate newfangled machinery and that Baby Boomers are retiring but younger generations “have avoided the manufacturing sector because of the volatility and stigma of factory work, as well as perceptions that U.S. manufacturing is a ‘dying industry.’”
I have another way to put that: These young folks don’t want to spend a lot of money and time training to do a specific job they might not get only to get laid off when some private-equity slicks (where the real money’s at) buy out the company and ship the jobs to China.
That’s what happens when owners and management have shredded the social contract. They find workers can’t or won’t do what they need them to. A flexible workforce has its downsides too.
Peter Capelli, a Wharton professor, wrote this in The Wall Street Journal a few months ago on why the “can’t find workers” meme is bogus, and how apprenticeships have almost disappeared from the U.S.:
Companies in other countries do things differently. In Europe, for instance, training is often mandated, and apprenticeships and other programs that help provide work experience are part of the infrastructure.
The result: European countries aren’t having skill-shortage complaints at the same level as in the U.S., and the nations that have the most established apprenticeship programs—the Scandinavian nations, Germany and Switzerland—have low unemployment.
Wouldn’t you know it, the Post reports that “the shortage has forced firms to adopt new tactics,” that include apprenticeships and training programs. But these aren’t new tactics at all, much less “forced” ones. They’re how companies always operated until they decided to offload the costs of these programs onto the public sector and onto individuals in the last few decades.
You could almost say companies these days don’t have the employin’ skills they used to.
The training angle is critical if you accept the premise of the story, but I don’t think that you should. After all, the businesspeople quoted here know how a market works. If you put out a want ad for something and you don’t find it, you need to think about upping your bid.
The Post tells us, for instance, that one company in Holland, Michigan, has been looking for a welder for a few months. Here’s a job (not necessarily the same one) there that pays $14 to $16 an hour, about $30,000 a year, and it’s not for an entry-level position. And welders have to go to school too and pay for it, mind you. Perhaps $16 to $20 an hour would do the trick. How much money has the Post’s company lost by not paying a market-clearing wage?
The impact of wages—which ought to be a primary factor in any story on why a company can’t find workers—gets short shrift here. The main discussion is in the last three paragraphs of the story:
The shortage of skilled workers has also pushed up wages, though executives said raising them too far could push more work to overseas plants.
A Michigan company that makes camshafts for cars, as well as farm and mining equipment, has had ads out for at least six months for CNC machine operators and programmers. The pay runs from $15 to $21 an hour, a relatively good wage in this part of the country.
“The problem is as soon as we get someone in, one of our other guys will jump ship,” said Tyson De Jonge, engineering manager at Engine Power Components. “They get better offers.”
So match them.
Letting companies complain that there’s no reserve supply of labor when they need it amidst mass unemployment is a bit much. If you need the perfect fit, you’d better be prepared to pay that prospective employee or to train him or her.
As Capelli writes:
TFinding candidates to fit jobs is not like finding pistons to fit engines, where the requirements are precise and can’t be varied. Jobs can be organized in many different ways so that candidates who have very different credentials can do them successfully.
Only about 10% of the people in IT jobs during the Silicon Valley tech boom of the 1990s, for example, had IT-related degrees.
And if you’re thinking of doing another one of these “can’t find workers” stories, which are plentiful, recall this Capelli anecdote from a follow-up WSJ column:
But a remarkable number of those who wrote were in positions where they were hiring, including recruiters. They reported that their organizations had shortages of employees because they would not train or invest in new hires.
My favorite email came from somebody in a company that had 25,000 applicants for an engineering position and the staffing people said none of them were qualified. Could that really be possible?