The Great Skills Gap Myth.

[HughBeaumont]

http://www.newgeography.com/content/004228-the-great-skills-gap-myth

Seems like the Luntz-hatched phrase "Skills Gap" is the latest coordinated talking point du jour among Republican governors, U.S. Chamber types and corporate bigwigs. Horseshit. Just now, Indiana's governor Mike Pence (R - Idiot) was on CNBC trying to bullshit his way to excuses and bob + weaving around real unemployment issues.

Let’s be honest, it’s in the best interest of employers to claim there’s a skills gap. The existence of such a gap can be used as leverage to obtain public policy considerations or subsidies. So there’s a self-serving element.

But beyond that, several behaviors of present day employers contribute to their inability to hire.

1. Insufficient pay. If you can’t find qualified workers, that’s a powerful market signal that your salary on offer is too low. Higher wages will not only find you workers, they also send a signal that attracts newcomers into the industry. Richard Longworth covered this in 2012. He explains that companies have refused to adjust their wages due to competitive pressures:

In other words, Davidson said, employers want high-tech skills but are only willing to pay low-tech wages. No wonder no one wants to work for them….So why doesn’t GenMet pay more? In other words, why doesn’t it respond to the law of supply and demand by offering starting wages above the burger-flipping level? Because GenMet is competing in the global economy. It can pay more than Chinese-level wages, but not that much more.

In other words, this company in question doesn’t have a skill gap problem, they have a business model problem. They aren’t profitable if they have to pay market prices for their production inputs (in this case labor). It’s no surprise firms in this position would be seeking help with their “skill gap” problem – it’s a backdoor bailout request.

2. Extremely picky hiring practices enforced by computer screening. If you’ve looked at any job postings lately, you’ll note the laundry list of skills and experience required. The New York Times summed it up as “With Positions to Fill, Employers Wait for Perfection.” Also, companies have chopped HR to the bone in many cases, and heavily rely on computer screening of applicants or offshore resume review. The result of this automated process combined with excessive requirements is that many candidates who actually could do that job can’t even get an interview. What’s more, in some cases the entire idea is not to find a qualified worker to help legally justify bringing in someone from offshore who can be paid less.

Yet, because the media is purchased by this same incestuous cabal of profiteers, you're going to hear this "blame the victim" line parroted over and over until your ears bleed black. There is no "skills gap". There is only a gap of workers who know 12 computer languages, are polyglots, financial modeling experts, have PhDs and 15 years middle management experience, are 28 years old and are willing to work for $35 thousand a year.

[burfman]

1. H-1B visas

Yeah - can't help but think the tech companies throw up the 'skills gap' in order to have ammunition for their desire to raise the limits for the H-1B visas to allow the importation of lower paid tech workers.

http://www.npr.org/blogs/alltechconsidered/2013/04/03/176134694/Whos-Hiring-H1-B-Visa-Workers-Its-Not-Who-You-Might-Think

[HughBeaumont]

2. The Skills Gap Explained:

http://globalmidwest.typepad.com/global-midwest/2012/11/the-skills-gap-explained.html

A conversation with Isbister convinced me that the Times did indeed give GenMet and Isbister a raw deal. But the same conversation also left me feeling that GenMet represents a new face of Midwestern manufacturing that creates as many problems as it solves. It also, I think, may have helped explain that "skills gap," and showed why it won't go away.

First, it's not your granddaddy's factory any more. Earlier generations expected to leave high school, go down to the factory gate and take a job for life that would soon buy a house and car and support a family. GenMet has only 72 employees, including 30 welders. It can't begin to hire everyone who needs a job. Even the few successful applicants will have trouble supporting a family, let alone buy a house, on $40,000 in a relatively high-cost area like metro Milwaukee.

So why doesn't GenMet pay more? In other words, why doesn't it respond to the law of supply and demand by offering starting wages above the burger-flipping level? Because GenMet is competing in the global economy. It can pay more than Chinese-level wages, but not that much more. The firm's website stresses that it is "dedicated to following lean manufacturing practices." Translation: it's not going to hire one person more than it needs nor pay one dollar more than necessary.

"It's every employee's job to make this company go, so we don't lose business to overseas," Isbister told me. "There are 250 businesses within fifty miles of me that do what I do."

What he's saying is that the good old days, when steady but unspectacular work and ordinary skills paid a living wage, are gone. Top performers can do very well. Average performers don't even get hired.

[CFLDem]

3. I would argue there is a computer literacy gap

for persons over 35, at least in my area.

And it's just not that they don't know, it's also that they don't know where to find out.