Sunday, July 28, 2013

The "Three Million Available Jobs" Canard

I recently heard a guy, apparently the former star of a reality TV show about 'dirty job', purport that there are three million jobs with good wages waiting to be filled, and that they remain open due to a mismatch between job applicant skills and the needs of the employer. He suggested that the root of the problem was that people are turning up their noses at the skilled trades, and thus aren't even considering jobs that could pay them $40,000 - $120,000 per year. Needless to say, something about that claim carried the odor of an equine byproduct.

As it turns out, the "three million jobs" figure is tossed around with some regularity, and it represents a snapshot of the job market at any given time, and does not capture the even larger number of jobs that become available and that are filled each month. It's a bit like looking at a photo of kids playing musical chairs and observing how many open chairs there are - the snapshot tells us how many jobs are available, but many of those jobs are recent vacancies and most of them will be filled. So as it turns out, about 2.5 million of those jobs aren't at all difficult to fill, and the suggestion is that in manufacturing "there are as many as 500,000 jobs that aren't being filled because employers say they can't find qualified workers". Note, we're still a long way from "jobs that could pay $40,000 - $120,000 per year."

When Sixty Minutes explored this shortage of workers, it found that wages were stagnant and manufacturers were unwilling to train workers - that is, they wanted to hire people who were going to be fully productive from day one. They looked specifically at a company called "Click Bond", that has had difficulty getting workers with sufficient skill to run its machines. An executive helped form a partnership with local community colleges to train workers, and "As part of the training program, [participating] manufacturers are willing to pay students for two-day a week internships." The big money at the end of that training?
At the end of the 16 weeks of training, Click Bond offered Ryan Vre Non and Jamie Pacheco full time jobs at $12 an hour with benefits.
So if you complete the training and internship, and perform at the top of your class, you have the chance to earn $12/hour? Not only is that number far short of the great salary the "dirty jobs' guy was touting, it's difficult to believe that somebody who was capable of completing that program at the top of his class could not have found another program that would have resulted in a better-paying job. And really, if you're advertising a job at $12/hour for somebody who already possesses the skill set to be productive with minimal to no training, you're not offering enough to entice that person away from their current job.
Taking a close look at wage data in manufacturing, the Boston Consulting Group recently found that less than one percent of the manufacturing workforce, in a handful of labor market areas, is affected by a skills gap. In its survey of employers, Manpower finds that, among U.S. employers having difficulty filling jobs, 54% report that the reason positions are difficult to fill is that workers are looking for more pay than is offered and 44% report that applicants lack experience.

But such reasons cast doubt on the idea of a skills mismatch, as it is not unreasonable to expect employers to pay the going rate for the skills they need, or to provide opportunities for workers to gain experience doing the jobs they need done. So the driver of current high rates of unemployment certainly does not seem to be the inadequate skills of the American workforce.
Seriously, if the message is "train yourself at your own expense" (or taxpayer expense), or even "train yourself at your own expense, but with the possibility of a part-time, paid internship", students are not going to clamor for those $12/hour opportunities.
In exchange for these math and computer programming skills, which for most people would most likely require some measure of secondary education, Click Bond is willing to pay newly hired employees $12 per hour. In Nevada, the average hourly wage covered by unemployment in 2011 was $20.13.

Pitts also talked with Klaus Kleinfeld, German-born CEO of Alcoa in Whitehall, Michigan. Alcoa employs 2,200 people working three shifts a day, seven days a week, producing parts to make jet engines 50 percent more fuel efficient.... The Alcoa plant currently has 27 job openings, but Kleinfeld says that Alcoa absolutely has no problem with a skills gap, but it sure would be a lot easier if people would “get an education.”...

While there may very well be 500,000 job openings in manufacturing facilities across the nation, these jobs require a specialized skill set that wasn’t required even a decade ago. Kleinfeld implied it, but Hutter made it perfectly clear – employers are not willing to pay to train employees anymore.
When you start looking for the more highly paid jobs where there is a "skills gap", the word "engineer" seems to come up a lot, but not so much "machine operator". If an experienced worker is worth $12/hour, we're not talking about a job with a meaningful career path.

Moving back to "dirty jobs", I personally have no problem with encouraging students to pursue jobs in the skilled trades. I respect that some people are concerned that when you start doing so in high school, you end up tracking students who are more likely to be poor or minority into trade-oriented 'tracks' rather than academic tracks, but the effort doesn't have to occur in high school. We, as a society, can simply accept that the skilled trades are important, can potentially pay as much or better than many white collar jobs, and that it's acceptable and in some cases optimal to pursue a career in the trades instead of seeking a college degree.

That said, some of the jobs we're talking about aren't just dirty, but are dangerous. A friend who owns a small factory described the toll on his body from his years of running industrial machines. He has severe degeneration of his back and knees - and he's the boss. Talk to some retired pipefitters about their aches and pains. Talk to some auto mechanics about the injuries they or their peers have suffered on the job.

We can't pretend either that everybody is capable of working those jobs, or even that some of the people who aren't applying for those jobs are declining the opportunity because they enjoy being unemployed. Somebody who has become unemployed after a couple of decades of working one job that wore out his body is not necessarily going to be capable of entering another job that carries a similar physical toll - even for $12/hour plus benefits. And for the theoretical job that starts at $40K and could pay $120K with an employer that purports itself to be willing to train, if they can't get enough applicants it's not because there's a shortage of skilled workers - it's because of what the prospective employer and his pitchmen aren't telling you - such as the level of physical danger, travel time and isolation.


  1. when your bmw breaks down , do you take it to a guy with a phd or a certified bmw teck who by the way makes good money

    1. That has exactly what to do with what I wrote?

      I don't have a BMW, but let's go with that for a moment... How much do you believe a BMW tech earns? And how many BMW tech jobs are going unfilled due to a lack of available mechanics?

  2. who is going to build and fix the infrastructure in america, the guy with a paper degree or a skilled trade worker,so when your stuff breaks down do to harverd and find some one to fix it, as steve jobs told obama before his passing when obama asked hom ,HOW CAN WE BRING THESE APPLE JOBS BACK TO AMERICS?? STEVES ANSWEAR,"WE RE NOT BECAUSE WE DONE HAVE ENOUGH PEOPLE WITH MODERN MANUFACTURING SKILLS

    1. Another comment that can only inspire me to wonder, did you read a word I wrote?

      The problem with our nation's infrastructure is not a lack of workers qualified to fix it - it's a funding issue.

      In any event, you have it wrong on the late Steve Jobs. When he was speaking of why they hire companies like FoxConn to assemble iPhones, his concerns did not relate to the low-skilled, low-paid workers that put phones together. He was concerned about the number of industrial engineers he might hire to support the necessary legions of factory workers. Nations with large populations of low-wage assembly workers have large populations of industrial engineers experienced in supervising those workers because there are jobs to be had. You can't put the cart ahead of the horse - you're not going to get tens of thousands of trained, experienced industrial engineers ready and willing to supervise and support line workers unless they can get jobs without moving to China.

      Steve Jobs also did not attribute the lack of industrial engineers in the U.S. to a shortage of people willing to do blue collar jobs. He attributed it to an educational system that does not produce enough graduates with the necessary skill set. If you were to have taken the time to read what I wrote before sounding off you would have read the part about how "When you start looking for the more highly paid jobs where there is a 'skills gap', the word "engineer" seems to come up a lot".