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October 15, 2012 3:03 PM We Need More Skilled Workers (Because We Won’t Train Them)

By Daniel Luzer

Part of the reason politicians cite for more college education has to do with a common gripe by American business owners: we don’t have enough skilled workers. An article in The Economist earlier this year explained that “America’s problem with training was laid bare in a report published last year by Deloitte, a consultancy firm, and the Manufacturing Institute. It identified 600,000 positions that were going unfilled because there were too few qualified skilled workers.” But if more workers go to college (of some sort) we’ll finally have all of the educated people we need. And then the economy, presumably, will flourish. Is this really true?

It’s a common talking point for sure. As President Bill Clinton put it in his speech to the Democratic National Convention last month:

There are already more than 3 million jobs open and unfilled in America, mostly because the people who apply for them don’t yet have the required skills to do them. So even as we get Americans more jobs, we have to prepare more Americans for the new jobs that are actually going to be created. The old economy is not coming back. We’ve got to build a new one and educate people to do those jobs.

But a recent report by the Boston Consulting Group indicates that’s not really an accurate assessment of the situation. According to an article by Paul Davidson in USA Today:

The study… says manufacturers may have openings they can’t fill, but it’s not because workers aren’t out there. It’s because companies are being too selective about who they hire and are unwilling to pay a competitive wage.
A genuine skills gap would have pushed average annual wage growth 3 percentage points above the rate of inflation over the past five years, the study says, citing a common economic benchmark. Instead, manufacturing wages have grown roughly in line with a below-3% inflation rate.

A real skills gap, after all, would mean employers would be willing to pay more for skilled workers; they aren’t.

The report does indicate a “mild skills gap.” Apparently manufacturers would like about 80,000 to 100,000 skilled employees. The Deloitte study referenced above indicated the economy needed some 600,000 skilled workers.

Not really. What’s happening here is that U.S. manufacturers simply changed their priorities in to the recession. They’re doing just fine with the workforce they’ve got; they cut staff and are producing more with fewer employees. More skilled workers might be nice, but companies aren’t willing to pay much more to obtain (or train) them.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • KL on October 16, 2012 12:31 AM:

    The are not paying more for educated skilled workers either. Most of the people I know who were fortunate enough to keep their job, including myself, have had a wage freeze for years. When a position has been lost, due to retirement, the rest of the employees are told that there will be no replacement. Instead, more work is heaped on the employees, but without any increase in wages.

  • Daryl Cobranchi on October 16, 2012 5:11 AM:

    Well, the (so-called) "job creators" can't afford to create jobs (or really even fill the openings that occur from attrition) because that would eat into their profits and then they might not have enough money to stash in the Caymans. How can they keep up with the Romneys, I mean "Joneses," if they're actually paying their employees a decent wage?

  • low-tech cyclist on October 16, 2012 9:43 AM:

    This reminds me of an experience I had in 1998, when I got tired of being a college math professor, and decided to see if I could find a tech job of some sort.

    1998, smack in the middle of the dot-com frenzy, seemed like a great time to look for a tech job, especially given my Ph.D. in mathematics and having recently aced a couple of courses in C++.

    But I'd go to those tech job fairs and get hardly a nibble, because, yes, they'd have had to do some training: I didn't possess experience that was a close match for their work, just a background that showed a high likelihood that I could be brought up to speed pretty damned fast. But that wasn't good enough.

    Instead, the tech industry wanted more H1-B visas to import programmers from India and elsewhere.

    Ever since then, I've taken skills-mismatch gripes with a metric ton of salt.

  • maggie on October 16, 2012 11:04 AM:

    Low wages are definitely a problem, but as low-tech-cyclist alluded to, education and training are really quite different things. Employers don't want to look at your capabilites and then train you to do the job, they expect you to already have all the exact skills for the job, (which you don't get from an education). It sort of becomes a self-fulfilling prophecy. They don't want to pay more if they have to train you because you will leave. But you will leave as soon as you can because they are not willing to pay a living wage.