Under my Video History tab, I posted the following CNN News clip from Lou Dobbs back in 2004-
2005. Check it out before reading an excerpt of the Times story:
Running out of skilled workers? The truth is, companies don't want to train employees and pay them more for their skills.
Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.”
At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.
The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs.
“It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.
This is like an instant replay of the video above.
“Trying to hire high-skilled workers at rock-bottom rates,” the Boston Group study asserted, “is not a skills gap.” The study’s conclusion, however, was scarier. Many skilled workers have simply chosen to apply their skills elsewhere rather than work for less. As a result, the United States may soon have a hard time competing in the global economy. The average age of a highly skilled factory worker in the U.S. is now 56.
One result, Sirkin suggests, is that the fake skills gap is threatening to create a real skills gap.
While Isbister says he thinks that his industry suffers from a reputation problem, he also admitted that his answer to a nervous parent’s question is not reassuring. The industry is inevitably going to move some of these jobs to China, or it’s going to replace them with machines. If it doesn’t, it can’t compete on a global level.
Howard Wial, an economist at the Brookings Institution with the confluence of computers, says increased trade and weakened unions, the social contract has collapsed, and worker-employer matches have become harder to make. Now workers and manufacturers “need to recreate a system,” a new social contract, in which their incentives are aligned.