KRUGMAN: The Fake Skills Shortage

[markiv]

Whenever you see some business person quoted complaining about how he or she can’t find workers with the necessary skills, ask what wage they’re offering. Almost always, it turns out that what said business person really wants is highly (and expensively) educated workers at a manual-labor wage. No wonder they come up short.

And this dovetails perfectly with one of the key arguments against the claim that much of our unemployment is “structural”, due to a mismatch between skills and labor demand. If that were true, you should see soaring wages for those workers who do have the right skills; in fact, with rare exceptions you don’t.

(the 'gang of 8' is pushing for a doubling of H-1b visas, right now)



http://krugman.blogs.nytimes.com/2012/11/25/the-fake-skills-shortage/

[Mopar151]

1. It's not just the wages

"Businessmen" (sneer) prefer work-bots whom they can control with fear - like fear of getting their H-1b pulled. The whole idea that a techie or a journeyman might be their colleague - or social equal outside work - is absolutely abhorrent to them.

[Chaco Dundee]

12. if only

If only I could find somebody with equal or more skill,s I coud delegate no matter the wages.reasonable industrie work standartds are a reflexion of Quality work.those standards demand wages,which enable a worker to do his Job without the worry for his family or let alone a second job.

[Chaco Dundee]

21. if only

The results of any work or job is a product Of combined effords.you controll nobody,but use combined skills to achive desired results and don't forgo or forget human decency in the treatment of employees on and off the job.those guys make your profits.

[Mopar151]

24. That's absolutely true

But the less knowledge of the job on the management side, the more likely management's desire to control by fear. It is possible for a good manager to keep things running on respect and fairness, but they can't resent or mistrust the nerds/shoprats. We're like dogs - we can smell manager fear. And if a weak manager thinks fear is a good substitute for respect, they've not seen much respect in their life.

[Chaco Dundee]

66. we are going of subject

Mangement is somewhat controlled by long term success.what you are discribing is not a qualified manager in the apropiate position,but a ladder climber, who owes his positon to the unqualified person who gave it to him.that is one reason why companys,buisnesses subcumb to the domino effect more often than necessary.fear as a substitute for quality management will only speed collapse. I do agree with your view on the carnal instinct in employees if they are misstreated.I don't hold them responsible .

[Mopar151]

67. A "ROB or a SNOB

Relative of Boss or Son,Nitwit, of Boss

And I think you meant cannine instead of carnal , or was it feral? - They're ridin' your ass, to keep their job, because they got nothin' else.

[Chaco Dundee]

68. Up,s

I meant carnal,since described people conduct their private live in the same manner.that's how they get off.not avenue to keep a job or advance.

[reformist2]

29. That's horrible - these H1-B's should have some recourse.

[Mopar151]

32. Sadly, in the case I know of

Engineers, hired as a team. It was the nasty little prick that was the "leader" that was doing most of the threatening. In a delicious moment of irony, he got the sack first.

[whathehell]

2. Agreed.

The only "shortage" is that of American workers unwilling to work for a Third World wage.

[HiPointDem]

3. kr.

[antigop]

4. WOOHOO! YES! Now we have Krugman writing about it! nt

[JHB]

5. Actually, that's from last Thanksgiving...

...not that anything has change much since then.

[antigop]

26. we need awareness. People don't understand the problem--especially engineers who haven't been hit.

Any mention of the problem will improve awareness.

[flamingdem]

6. K&R

[Skittles]

7. oh, the offshore "TALENT" garbage

when I have to talk to offshore folk with masters degrees who seem to know less than the average American high school nerd I know something is up

[Mopar151]

33. Can we talk? Can we talk?

One of my co-workers was fired, for daring to tell a Russian H1-b engineer that welding warps aluminium.

[Skittles]

34. omg the stories I could tell

I have been stuck on the phone with them for HOURS AT A TIME

[Mopar151]

36. it's a fine thing for world peace

That you can't fit a ballpeen hammer through a phone line.

[formercia]

8. No shortage of Fake Skills in Congress.

IMHO

[Harriety]

9. Years ago when I started working we were trained on the job. How come they don't do that now?

They used to pay people a lower wages until they learned that job. Now it seems as though it would be a huge burden for some businesses to actually do that.

[Lydia Leftcoast]

14. The current generation of middle managers was trained to focus exclusively on the numbers

The people who were my students in the early 1980s are now in their late 40s, early 50s, prime middle manager material. They majored in business and were taught to think strictly in terms of numbers and to regard the prosperity of the shareholders as their ONLY priority.

Furthermore, most of the students I had came from pretty affluent homes, so they had no experience of being poorly paid or unemployed and no experience of mingling with blue collar workers or their families.

I don't remember "white trash" jokes when I was growing up. That's because so many people were either working class or had grown up working class.

I hate the "seen at WalMart" pages or the gibes at "trailer trash."

You know what? If you had grown up in the same environment, that would be YOU pushing a WalMart cart while wearing ill-fitting sweats.

[Populist_Prole]

22. Yuppie maggots

I've lost friends because they went into business school and later became downright toxic in their views of the working class. The thing is, they don't see it as an anti-labor, or anti-whatever issue: It's simply the the way the world is, according to what they've been taught.

I agree about the numbers fixation as well. Where I work ( and comparing notes with my peers in other companies ) everything is a crisis that requires maximum effort to get by, with what looks good right now the sole concern, even if it only makes it harder on somebody else ( or even themselves ) later on. It never occurs to them it's a fools errand. It's just the way the system works, and the one that spins the hamster wheel fastest is the bestest.

Vile maggots, every last one of them.

[Mopar151]

25. + 1000 n/t

[HughBeaumont]

46. Especially galling is that "Fiduciary Duty to the shareholders" is a MYTH.

http://www.alternet.org/economy/dumbest-idea-world-corporate-americas-false-and-dangerous-ideology-shareholder-value?paging=off

Shareholder value thinking is endemic in the business world today. Fifty years ago, if you had asked the directors or CEO of a large public company what the company’s purpose was, you might have been told the corporation had many purposes: to provide equity investors with solid returns, but also to build great products, to provide decent livelihoods for employees, and to contribute to the community and the nation. Today, you are likely to be told the company has but one purpose, to maximize its shareholders’ wealth. This sort of thinking drives directors and executives to run public firms like BP with a relentless focus on raising stock price. In the quest to “unlock shareholder value” they sell key assets, fire loyal employees, and ruthlessly squeeze the workforce that remains; cut back on product support, customer assistance, and research and development; delay replacing outworn, out- moded, and unsafe equipment; shower CEOs with stock options and expensive pay packages to “incentivize” them; drain cash reserves to pay large dividends and repurchase company shares, leveraging firms until they teeter on the brink of insolvency; and lobby regulators and Congress to change the law so they can chase short-term profits speculating in credit default swaps and other high-risk financial derivatives. They do these things even though many individual directors and executives feel uneasy about such strategies, intuiting that a single-minded focus on share price may not serve the interests of society, the company, or shareholders themselves.

This book examines and challenges the doctrine of shareholder value. It argues that shareholder value ideology is just that—an ideology, not a legal requirement or a practical necessity of modern business life. United States corporate law does not, and never has, required directors of public corporations to maximize either share price or shareholder wealth. To the contrary, as long as boards do not use their power to enrich themselves, the law gives them a wide range of discretion to run public corporations with other goals in mind, including growing the firm, creating quality products, protecting employees, and serving the public interest. Chasing shareholder value is a managerial choice, not a legal requirement.

Snip

Today, questions seem called for. It should be apparent to anyone who reads the newspapers that Corporate America’s mass embrace of shareholder value thinking has not translated into better corporate or economic performance. The past dozen years have seen a daisy chain of costly corporate disasters, from massive frauds at Enron, HealthSouth, and Worldcom in the early 2000s, to the near-failure and subsequent costly taxpayer bailout of many of our largest financial institutions in 2008, to the BP oil spill in 2010. Stock market returns have been miserable, raising the question of how aging baby boom- ers who trusted in stocks for their retirement will be able to support themselves in their golden years. The population of publicly held U.S. companies is shrinking rapidly as for- merly public companies like Dunkin’ Donuts and Toys“R”Us “go private” to escape the pressures of shareholder-primacy thinking, and new enterprises decide not to sell shares to outside investors at all. (Between 1997 and 2008, the number of companies listed on U.S. exchanges declined from 8,823 to only 5,401.)5 Some experts worry America’s public corporations are losing their innovative edge. The National Commission found that an underlying cause of the Deepwater Horizon disaster was the fact that the oil and gas industry has cut back significantly on research in recent decades, with the result that “knowledge and experience within the industry may be decreasing."

[dreamnightwind]

65. Thanks for that post

I was under the impression that corporations and their managers were required to maximize shareholder value as their prime directive. In fact I had long viewed that as a possible path to reform, if we could just rewrite the corporate charter to not have such a requirement. I'll check out the info at the link, sounds interesting.

[woo me with science]

57. "taught to...regard the prosperity of the shareholders as their ONLY priority."

Thank you. It's malignant, it's frightening, it's obscene, and at its worst, it becomes frankly evil, because it leads to the replacement of human values with the corporate bottom line.

I think this is a good place to repost the letters to shareholders from private prison executives. They are chilling:

Letters to Shareholders from Private Prison Executives
http://www.democraticunderground.com/10022665091

[Skittles]

35. they still DO that now

only it's in India, Brazil, China, etc

[TheKentuckian]

10. This is the real scoop here.

Educating our way to the jobs of tomorrow has proven to be an epic scale scam. All it has done is stagnate wages and increased entry requirements while making big money for banks and a bunch of private, for profit schools.

[FogerRox]

31. Education has not lead to stagnation of wages.

[TheKentuckian]

59. When you glut the market, you drive down wages. When you over focus on degrees

you end up with too many having to take anything to have work which typically will reduce their earning power which in turn pushes out formally qualified people form the fields which lowers their pay.

Education isn't a scam but this movement over the past 25 years or so is.

[undeterred]

11. Yes theres a shortage of Cisco network engineers willing to work in the $15-$18/hr range

I called up and asked if it was a misprint. Nope. Is it a joke then? Apparently not.

[haele]

16. Ten years ago Cisco Network Engineers worked between $30 - $45 an hour.

If the company that used to pay that much is making even more profit than they were then, why are they only willing to pay $15 - $18 an hour for someone with the same skillset now?

If the work your employee is doing now was worth a certain percentage of revenue ten years ago and less now, what changed? You didn't need to pay them that much if they weren't worth that much, did you?

Easier and cheaper access to more people willing to work for less, that's what changed.

Haele

[undeterred]

19. I asked another recruiter if they actually find people who work for that

and she said no. I refuse to do it and so do a lot of others. But there may be some young ones who do. I don't know. It just irks me to see them advertising a rate that low.

[Aerows]

20. LOL

15- 18/hr for a Cisco network engineer.

I suspect next they will be asking for physicians at 15/hr.

I wouldn't want discount brain surgery, and anyone asking for a 15/hr network engineer is asking for a network that is down all of the time, has no back ups and more holes than Swiss cheese.

[antigop]

27. +100 nt

[Flatulo]

13. I keep getting calls from recruiters asking for senior mechanical engineers, with MSME, to

work for $60k, and the work week is 60 hours.

After I tell them no way, (I'm actually retired now), they always ask if I know anyone who would be interested. I tell them, no, all my colleagues still have their dignity and would rather eat dirt then to work for 1/2 of their former (pre-crash) wage.

[Flatulo]

15. On a slightly related note, my son is getting his masters in paralegal studies this spring. He's

been interviewing for clerical assistant jobs at $12/hr. Thats pretty much a job shredding papers and getting coffee. Absolutely no one will hire a newly minted paralegal. You have to be born with 5 years of experience.

[mn9driver]

58. The legal profession is a tough market right now

My spouse is an administrative attorney with over 25 years experience. After being laid off 2 1/2 years ago, the best work she could find paid $18 per hour, no benefits, working literally shoulder to shoulder in a windowless, poorly ventilated room with 40 other lawyers doing document review. Many of them were fresh out of law school and had massive debt. Others were like her; formerly employed by large corporations to run contracts, etc. and now laid off. They had to ask permission to use the restroom. These were licensed attorneys who had passed the bar.

She recently got a contractor job with a former employer that pays $23 per hour and lets her work from home. She's thrilled because that's about as good as it gets for laid off admin attorneys these days. Even highly experienced ones.

[Flatulo]

64. That's a damned shame. I hope she can find more rewarding work down the road.

It's happening in just about every profession except nursing, which seems to be booming. Around here nurses are pulling in well over $100K - in fact, I know two ladies who are making over $135K. Is a tough job, but they have a strong union here.

Good luck to you both.

[AzDar]

17. K & R

[Spitfire of ATJ]

18. The Democrats like this because they can push for more education funding...

This is a major shout out not only to the Teacher's Unions but to their own reputations of caring for the kids and helping people out of poverty into the Middle Class through education.

The Republicans love this because it puts the blame on Democrats for not performing the very duty I just described and distracts from the REAL culprits of this situation, mainly the greed of Capitalism driving everything.

[zazen]

51. +1,000

And the US Dept of Ed, NSF, and some NIH education funding helps subsidize universities, the budgets of which are being slashed by state governments. And they're so desperate chasing the next dollar that no one (with any power) stops to ask how universities are furthering a neoliberal agenda that is simultaneously undermining them.

[Spitfire of ATJ]

62. What gets me is how Republicans put people in agencies to destroy them from within,..

Then Dems get in and they don't purge those saboteurs out.

This leaves thousands of senior administrators who's new mission goes from simply making their own agency out to be a failure to claiming the failures are now the fault of the President's lack of leadership.

[OhioChick]

23. K&R n/t

[reformist2]

28. With a very few exceptions, there are simply not enough jobs to go around.

[usGovOwesUs3Trillion]

30. Thank you Mr. Krugman for speaking the plain truth!

Hopefully more in your profession will take curage from your example and follow your lead!

[Sen. Walter Sobchak]

37. The "structural" issue we encounter is geographic

The talent we're struggling with is relatively scarce and almost entirely in the Boston/NYC/DC region and even underemployed and unemployed candidates believe relocating to the west coast will be bad for their career. Salary, benefits and other enticements don't even come into it. And even when we can hook somebody, they seem to inevitably have a hipster dickhead companion who won't move to Orange County.

[Fumesucker]

38. There's plenty of DUers who would never ever relocate to the South

And as a long term resident of the South I can't say I blame them.

Culturally, Orange county is just the South set in California.

If the talent is so scarce then why would anyone with that talent be un or underemployed in the first place?

Your post is not really making a great deal of sense.

[Sen. Walter Sobchak]

39. If you seriously equate the two you have probably never been here.

But that is beside the point. If they are really dogmatic about it they could work out of Burlingame instead.

And i'm not sure what doesn't make sense.

We have a skill shortage because we are geographic outliers, the people in question are so tied to the Boston/NYC/DC region that they won't even contemplate the world outside it. The underemployed are mostly people who took some menial position with a big firm or agency and are hoping to move up, but still sniffing around. The unemployed are few and far between, but still inflexible when it comes to leaving the east coast.

[Fumesucker]

40. The South is more diverse than you might imagine and yes I've been to OC

It seems statistically rather unlikely that a great many more people in the Northeast have a certain talent than in almost as densely populated Southern California.

[Sen. Walter Sobchak]

41. Different regions have different industries and attract different people.

If you have a basic basket of skills, say proficiency with Microsoft Office, bachelors degree and fluency in Spanish. You can probably find that in any city in America. When your requirements are more industry specific you hit some structural issues.

The positions we are struggling with require extensive experience, sufficient to train others with some pretty esoteric tools that you're only going to learn working inside a large law firm, financial institution or regulatory agency. You aren't going to get forty resumes in an hour on Craigslist.

The people who do this stuff in large numbers are in the Northeast, not Southern California. Local ads rarely receive more than a dozen applications and most of them have little more than branch office data-entry experience.

[Fumesucker]

42. You want someone to move across the country

To a region where they won't be able to find another job if their job with you doesn't work out for whatever reason. The fact that you want them to train others in their skill set suggests that your company would dump them as soon as you have enough locals trained up to speed.

Then they would be liable to move back to the NE on their own dime.

People aren't as gullible as they used to be about this stuff, the level of trust in corporate America is dropping like a stone, as well it should.

It also seems extremely unlikely given your description that an H1b from another country would have the skill set you are seeking, it would appear to be remarkably US-centric.

[Sen. Walter Sobchak]

44. I can barely follow a word you have said,

Last edited Tue Apr 23, 2013, 03:22 PM - Edit history (1)

I'm just raising an example of a structural employment issue. We're in California, the candidates aren't.

And no, we wouldn't be dumping them. It takes years to even be capable with this crap.

[whttevrr]

61. This one dickhead

[markiv]

43. 'they seem to inevitably have a hipster dickhead companion'

ever consider that part of the 'attitude problem', might be yours, and that people pick up on that?

i think you're typical of those Krugman is talking about, someone who complains they cant find someone very expensively trained who wont travel a great distance to get on their knees and grovel for a manual labor wage, when you snap your fingers

have YOU relocated recently, or do you have some 'dickhead companion', that has made you reluctanct to do so?!?!

Oh, I'm sorry, am I not supposed to ask the same of YOU?

[Sen. Walter Sobchak]

45. Huh?

First of all these positions start at $82,000

And the provided reasons are always without fail some horribly cliched rant about suburbia.

I mean "hipster dickhead" in the most literal possible way.

[whttevrr]

47. Are you paying moving expenses?

What are you offering for housing?

Something isn't adding up...

[Sen. Walter Sobchak]

48. Relocation assistance is standard,

Otherwise offers are typically unique to the candidate, but we don't usually get that far, they dead stop won't leave the east coast.

[whttevrr]

49. Even with mortgage rates as low as they are...

In OC you are looking at a 2000-3000 dollar mortgage. and that would be for a very modest 3-400k home. Rent is not much better.

I'm from the East coast... and I still get shivers thinking about slush. When it gets down to 45 in LA I think "Hah! This is cold but I won't be stepping in a Slush Puddle today".

Of the people who do get past the move... What is it that you are offering them to uproot their lives and come out to a moderate climate?

Standard? Is that the same as DOE... what gives? None of us are being recruited. What numbers are you offering?

EDIT: I've seen numbers as low as 17k and as high as 90k.

How much do you offer a person to uproot their lives and move 3000 miles across the country? It is a fairly simple question. Is there a reason you chose not to answer it?

[Sen. Walter Sobchak]

54. Did you read the first post you replied to?

These positions generally start at $82,000, which is roughly the same as DC. NYC can peak just a little higher and Boston/Philadelphia a fair bit lower. Of course the difference is in Southern California that mortgage payment is going to a house, not rent on a 500 square foot apartment built sometime around the sinking of the Titanic. When I say relocation assistance is standard, I mean just that. It is standard, it is just there.

The ultimate issue is that in their line of work there is a perception getting out of the east coast bubble is bad for their career. That is what we can't get past. Nobody has really expressed much disagreement about the offered salary. The issue of the hipster doofus boyfriend recoiling in horror at the sight of an office park is just a goofy recurring issue that has come up with several candidates who had not previously expressed an unwillingness to relocate.

[whttevrr]

60. Yes and the one before that asked you what you were offering the hipster dickheads to move across

the country.

Then you went on to denigrate the person posting the question. So I noticed that in the deflection you neglected to answer the question that I easily understood. Now you are challenging my reading comprehension? you are trying to hire on the cheap. It seems evident who the real dickhead is in this scenario.

Are you a 'job creator' too?

Fucking dickhead.

Edit: Do you remember typing these pearls of wisdom?

I can barely follow a word you have said,



Last edited Tue Apr 23, 2013, 12:22 PM USA/ET - Edit history (1)
I'm just raising an example of a structural employment issue. We're in California, the candidates aren't.

And no, we wouldn't be dumping them. It takes years to even be capable with this crap.

[Sen. Walter Sobchak]

63. You are clearly having a conversation with someone else. Don't let me interrupt.

[markiv]

53. you keep referring to others as 'dickhead'

and I'll bet you come off as a real jerk in interviews - people want to know what they're getting into, before they say goodbye to all that's familiar, and bring you into their world

i conducted at least 35 interviews at the height of the tech boom (meaning applicants never had more power), and i never used words like that to describe applicants, ever

frankly, i think the problem is you

[Sen. Walter Sobchak]

56. Oh, I am the problem with lots of things.

But the people I was describing as dickheads weren't candidates. They were a couple of walking Brooklyn stereotypes who flew out with their girlfriends who were the candidates and were just generally assholes.

[Lady Freedom Returns]

50. I just don't think they want to hire enough people period.

They don't want to train, they don't want to give a living wage, they enjoy firing the trained employees so the don't have to pay any benefits when the time comes. They do the firing instead of lay off so they can rehire and start the employee at square one, then fire them again.

They can over work what worked they do have, get away with some clever scheduling to either keep the employee from being a full time, but work them like one. Many earn overtime, but never see it on the check. They are scared to come forward because a crummy low paying job that dose not pay what is owed is better than no job at all!

Many have decided that it is better to struggle and maybe lose all than rock boats and guarantee losing all.

Mean while , the way the hiring is being done by the rehiring in a way that it is classed as a new hire, the job numbers look better. It looks like there are jobs and that things are improving. That causes people to feel better and think all is fine and thus no one wants to rock the boat with it "getting better".

Those that do read the books see what is going on and ask why they are not hiring true new employees and are overworking what they do have they come out with this bull about "can’t find workers with the necessary skills".

[closeupready]

52. Yet, somehow, business owners get such underpaid workers offshore.

Seems like NAFTA and these other types of open border agreements serve only the 1%, not the middle class.

[lumberjack_jeff]

55. Everything that Krugman says is so blatantly, mind-bendingly obvious.

In what kind of rational world would his views be considered fringe?

If skills are in shortage, the pay for those skills would increase as well as demand for those seeking the training. Interest rates are zero... fucking zero... and have been for years. We should borrow heavily during this opportunity to invest in the next phase of economic growth. Why are these views controversial?

This country doesn't need hundreds of thousands of H1b visas nor do we need 4x as many education visas issued as we did in 1990.

The owners of this country aren't running it in your interests. They're running it in the interests of global capital, but they're doing it badly without realizing that even the global capitalists would be better off if they were to run it for citizens benefit.