Tuesday, February 19, 2013

"Skills Gap" another way to describe "Corporate Welfare."

The "skills gap" talking point has been around a long time. It's been used to receive corporate welfare for job training, and to argue for work visa's for labor that typically isn't as expensive.

The drive to soak taxpayers for even more corporate welfare is behind Scott Walker's latest attempt to "create jobs." While the idea behind job training and a public/private alliance isn't bad, it really isn't a problem of the public sector. It seems business is trying to avoid having skin in the game, like it's too much of a gamble, so they're looking for taxpayer handouts. It wasn't always like this either.

This Cap Times editorial by Dave Zweifel explains:
It’s taken as a given these days that many “good” jobs go unfilled because there’s a huge “skills gap.” Here in Wisconsin, the skills gap is what’s behind the push to financially penalize colleges and tech schools unless they devise curriculum that mesh with the needs of employers. Gov. Scott Walker and others in his party have threatened to base state aid to the schools on how well they meet those needs ... there’s a growing suspicion that many firms are feeding the supposed crisis as a way to get taxpayers to finance the job training of their workforce.

There was a time when employers invested heavily in the training and education of their employees. In manufacturing, much of this was done through union contracts that provided for full-time apprenticeships, jobs in which a new employee would work with a skilled welder, for instance, for a number of years to fully learn the trade. But as the union movement has shrunk, so have the apprenticeship programs. Now the vocational and technical system is expected to pick up the slack.

What’s curious is that while many in the business community are strong advocates of a free marketplace, where … the free market would dictate that the wages for the job ought to rise to attract those skills. “If there is a shortage of something, you would expect the price of that something to increase over time,” Steve Hine, director of labor market information for the state of Minnesota, pointed out. Instead, though, the average hourly wage for a welder grew just $1 between 2005 and 2011. Taking inflation into account, that’s a pay cut.

Professor Peter Cappelli, a professor of management at the acclaimed Wharton School at the University of Pennsylvania, openly calls that skills gap “a myth.” Cappelli says companies are demanding changes in the education system to make up for their own lack of investment in workforce training and employee development.

Melanie Holmes of the Milwaukee-based Manpower Group placed part of the blame on being “way too picky about who we’re hiring. “We’re not willing to hire somebody who has most of what’s necessary and then invest in training to get them up and running,” she said.

There’s also no question that some employers are using the perception of a “gap” to keep their costs low. And that shouldn’t be.


  1. I blame American business schools for emphasizing financial management over the actual practice of long term business management. These schools have created an entire generation of corporate suits who are more concerned about hitting quarterly numbers, so as to receive bonuses and stock options, rather than managing a quality manufacturing process. I've had occasion to speak with UW business school graduates at various watering holes in Madison over the years and I am always amazed by what a large percentage of them are idiots.

    If you want to hire someone to manage you business successfully, hire an engineer and not a business school flunky. Actual engineers know the value of a skilled and motivated workforce. Financial engineers only see a number on the bottom line that needs to be lowered.

  2. And notice that while Walker wants management to be able to opt out of contracts they don't like and to cut hours without union agreements, he never asks employers to pay a fair wage to close this alleged gap.

    I saw a story this week that Teabagging Washington County will have thousands of skilled worker needs opening up in the next 10-15 years. Maybe if these greed heads raised wages by $4 an hour, they wouldn't have this problem