Brewtown Gumshoe: skills gap

The dutiful parrots of the media continue to push the "labor shortage" myth. Unemployment is near an all-time low. Yet, we still hear the cries of "labor shortage" and "skills shortage" in the media.

CNBC recently wrote The U.S. Labor Shortage Is Reaching A Critical Point. Employers are supposedly having trouble finding qualified employees to fill 6.7 million job openings.

Lacking self-awareness, the article stated, "Employers are going to have to start doing more to entice workers, likely through pay raises, training and other incentives."

Just as basic economics would predict.

As Dean Baker wrote, "We aren't seeing large-scale increases in pay despite near-record profit shares. This suggest that either employers are really not short of workers or that they are too incompetent to understand the basics of the market."

Baker continued, "The implication of the CNBC piece that claims that hiring is down because businesses can't find qualified workers. If this really is the problem, then the solution, as everyone learns in intro economics, is to raise wages. For some reason CEOs apparently can't seem to figure this one out, since wage growth remains very modest in spite of this alleged shortage of qualified workers."

For Further Reading:
The Washington Post Really Really Hates Markets When It Means Higher Pay For Ordinary Workers
Americans Need To Stop Obsessing Over The Unemployment Rate

Sunday, February 11, 2018

The So-Called "Skills Gap" Is Complete Bullshit

Another "skills gap" crusader:

LaSalle Network CEO Says There's a Huge 'Skills Gap'

Such a good little soldier for the privileged.

Too bad reality doesn't comport with that tripe.

The Myth of the Skills Gap

The problem is, when we look closely at the data, this story doesn’t match the facts. What’s more, this view of the nation’s economic challenges distracts us from more productive ways of thinking about skills and economic growth while promoting unproductive hand-wringing and a blinkered focus on only the supply side of the labor market—that is, the workers.

A Recession-Era Economic Myth Goes Up In Smoke

Throughout the slow recovery, journalists from major papers made a cottage industry of finding CEOs complaining that their hiring searches were coming up empty. Conservative commentators chalked up high unemployment to a so-called “skills gap”: companies needed more qualified workers, they insisted, than were currently on offer.

But something wasn’t right. If companies really needed qualified workers, why weren’t they raising wages to attract them? Or why weren’t they lowering their qualification standards or offering training to less experienced new hires? If companies really did have jobs that desperately required filling, they would have been working harder to fill them.

Don’t Blame A ‘Skills Gap’ For Lack Of Hiring In Manufacturing

This “skills mismatch” theory is a favorite of corporate executives and the think tanks they fund. But it is based on scant evidence. Individual companies may be struggling to fill specific jobs, but the data shows little sign of an industrywide shortage of skilled workers. In fact, it’s not clear that companies are really trying hard to fill many of these jobs at all.

Talk of a skills gap in the labor market is 'an incredible cop out'

But is there really a skills shortage? If so, why have median wages been stuck in a rut for so long? Why aren’t companies investing more in training and labor-saving equipment? Why aren’t they asking workers to work longer hours? It doesn’t add up, says Dean Baker, co-director of the Center for Economic and Policy Research, a liberal think tank in Washington.

The persistent myth of the “skills gap”

Nobel Prize-winning economist Paul Krugman calls the skills gap a “zombie idea” that won’t go away despite being routinely debunked. The reason has less to do with ignorance than with power. After decades of rising inequality and an eroding labour share of income, the skills gap mythology downloads blame onto workers and costs onto government. Jim Stanford, writing in the pages of Academic Matters, puts it well: “According to this worldview, the biggest challenge facing our labour market is adjusting the attitudes, capabilities and mobility of jobless workers…The problem is with the unemployed.” The skills gap takes the onus off employers to pay decent wages and train workers, blaming labour market failings on workers instead.

For Further Reading:

The Mythological Skills Gap

The Zombie Skills Gap Meme That Won't Die

It's About Job Shortage, Not Skills Crisis
It's Not Structural Unemployment
Manufacturing
Structural Unemployment: The Data Doesn't Match
Varieties of Unemployment

Skills Shortage Sham

More Skills Gap Crap

Is There Really a Skills Gap?

The Skills Gap Is a Myth

Saturday, November 15, 2014

More Skills Gap Crap

The Milwaukee Business Journal entered the "skills gap" discussion with 5 things employers and job seekers need to do to bridge skills gap.

Why the media continues to push this manufactured drivel is beyond me. There is no skills gap.

The money-quote that captures the ridiculousness of this:

The reason companies are taking longer to hire is that they are getting more specific about the talent that they are looking for and a "great employee is game changing," and potential hires need to focus on "bringing greatness into the workplace," said Jamie Fall, vice president for workforce and talent sustainability for a Washington, D.C.-based nonprofit called the HR Policy Foundation.

So, Milwaukee can't find welders (the oft repeated example) because not enough "game-changing" and "great" employees are out there? Whatever that ever means.

Sure, most employers want smart, responsible and talented employees. But the main reason they aren't filling these jobs is because of the pay. You can't employ a great, game-changing employee for a minimum wage.

All jobs require some on-the-job training. The idea that an employee walks into the door knowing everything is pure fantasy.

This isn't a worker or a training problem, it's a pay problem.

[source]

This anemic-pay epidemic also explains our current record-level income inequality. When people only have enough to get by, they don't consume enough to consistently grow the economy. Our media has been a compliant messenger in the skills gap mythology and, thus, enablers of increasing income inequality.

The story goes:

The Haves want nothing more than to employ the Have Nots. Its just the Have Nots aren't pulling their weight. They just can't quite get it done.

Maybe if the public sector paid more for training, maybe if the public sector did more to educate potential workers, maybe if the public sector gave subsidies to private companies...

Got that? You're stupid and unskilled...and its the government's job to fix things, or at least shovel money at it.

All hail the free market!

Saturday, October 18, 2014

Weekend Reading

Paul Ryan Declares War Against Math
The Remarkable Impact Of The Deep Tunnel
Corporate Deadbeats: How Companies Get Rich Off Taxes
Return Of The Bums On Welfare
Skill Gaps, Skill Shortages, And Skill Mismatches: Evidence For The U.S.
Rep. Paul Ryan's Whopper About Competitive Districts
Why Public Investment Really Is A Free Lunch
Unlike Walmart, Costco Has No Plans To Cut Employee Health Benefits
The Koch Brothers' War On Transit
Wisconsin Supreme Court Vs John Doe

Saturday, June 7, 2014

There Is No Skills Shortage. Scott Walker Has Been Terrible For Wisconsin.

Two more memes debunked (again):

Existence of skills gap debated

Walker jobs promise appears out of reach

Saturday, July 13, 2013

The Zombie Skills Gap Meme That Won't Die

Friday, On Real Time With Bill Maher, guest Mike Rowe got the ball rolling, continuing the mythical meme that is the skills gap.

We've all heard it - I know such-and-such company that just can't find any workers to do the numerous positions they are trying to fill. According to the proponents of this fairy tale, the U.S. just isn't training workers to do the jobs businesses need.

Yet, when we actually look at the data, a classic supply-and-demand explanation (with most of the blame on low wages) appears.

As UWM professor Marc Levine notes, "There is, in short, little labor market evidence – when we examine job openings, wages, hours, employment projections, or worker credentials— of a skills gap or structural unemployment...National data on wages, hours, job vacancies, and employment projections provide no evidence that a skills gap has caused high unemployment in the U.S. as a whole –- either before or after the Great Recession. This finding is consistent with the conclusions of a daunting array of research and analysis on the subject. As we have seen, these include: Studies by: a) Scholars from such top universities as Duke, Berkeley, Penn, Stanford, MIT, and UW-Madison; b) Economists from the Brookings Institution, the Roosevelt Institute, the Center for Economic and Policy Research, and the Economic Policy Institute; c) Economists at the Federal Reserve Banks of Atlanta, Boston, and Chicago; and d) Consultant-economists such as the Boston Consulting Group. In addition, articles and commentary by: a) Two recent Nobel Laureates in Economics (Krugman and Diamond); and b) Two former heads of the President’s Council of Economic Advisers (Tyson and Lazear), thoroughly reject the skills gap or structural unemployment as explanations for our underperforming labor market."

The U.S. does have a few industries, in a few locations across the country, where specifically-trained workers are needed. Do you know what happened in those few places? The already-employed workers saw their hours increase to meet the demand, to fill-in for the needed-workers. Wages also rose to attract workers to the job openings.

This structural malady is a small proportion of unemployment. As Rortybomb informs, "A report the IMF put out - The Great Recession and Structural Unemployment - which found find that structural unemployment is 1%-1.75% nationwide, with skills being 0.5%."

In most places, where some falsely claim a skills gap, wages for new hires have not risen, nor have the hours of those currently-employed increased.

Dave Alitg, in The Skills Gap: Still Trying To Separate Myth From Fact, stated, "We have yet to find much evidence that problems with skill-mismatch are more important postrecession than they were prerecession. We'll keep looking, but—as our colleagues at the Chicago Fed conclude in their most recent Chicago Fed Letter—so far the facts just don't support skill gaps as the major source of our current labor market woes."

As I've written, "In reality, this is simple supply-and-demand economics. People don't want to work at grueling jobs for low pay, minuscule benefits, and without a retirement plan. If these jobs were paying living wages and had some sense of security, people would be lined up around the block for the positions."

For Further Reading:
Skills Shortage Sham

Thursday, February 21, 2013

The Mythological Skills Gap

The Skills Gap & Unemployment In Wisconsin: Separating Fact From Fiction

Beyond the anecdotes of local employers, the Wisconsin and Milwaukee labor markets show no statistical evidence of a skills shortage:

Wages: If Wisconsin employers were encountering a shortage of skilled labor, wages would be going up, but in Wisconsin real wages have declined since 2000. By contrast, in states such as North Dakota and Wyoming, where there really is demand for and a shortage of skilled labor, caused by a boom in the energy sector, real wages have jumped by double digits since 2000. Wisconsin wage "growth" also lags the national rate, another sign that there is no labor shortage here.

Hours: In contrast to states with tight labor markets such as North Dakota, there is no evidence that Wisconsin employers are adding hours to their existing workforce, to compensate for an alleged skilled labor shortage. Average weekly hours worked in Wisconsin are down 4.3 percent compared to 2000.

Occupational Projections: Although promoters of the skills gap idea claim that the skills requirements of future jobs will vastly outstrip the skills and education of Wisconsin workers, occupational projections for the state reveal that 70 percent of projected openings through 2020 will be in jobs requiring a high school diploma or less.

Underemployment and Workforce Overqualification: In reality, Wisconsin and Milwaukee suffer from the opposite of a skills gap: an economy that generates too few quality jobs and a labor market that is characterized by the underemployment and overqualification of skilled and educated workers. 25 percent of Milwaukee's retail salespersons hold college degrees (up from 11 percent in 2000); 60 percent of Wisconsin's parking lot attendants have had some post-secondary education. The "job gap" has created a skills mismatch of sorts in the Wisconsin and Milwaukee labor markets, but it is the inverse of the one commonly put forward: it is a mismatch of too many highly educated workers chasing too few "good jobs."

Rising Human Capital: Contrary to skills gap rhetoric, educational attainment has increased dramatically in Wisconsin and Milwaukee over the past decades. Nearly 90 percent of Milwaukee's adult population holds a high school diploma (up from 50 percent in 1970), and 31 percent hold at least a bachelor's degree (up from 11 percent in 1970). Gains in UW-Milwaukee The Skills Gap and Unemployment in Wisconsin 6 educational attainment have occurred for all racial and ethnic groups. All data point to consistently rising human capital formation in Wisconsin and Milwaukee.

Saturday, December 12, 2020

Friday, July 31, 2020

Wednesday, July 15, 2020

Sunday, March 8, 2020

Saturday, January 12, 2019

Sunday, July 8, 2018