Skilled-Worker Shortage Is Exaggerated, Says Study

Paul Davidson, CNBC, October 15, 2012

A shortage of skilled manufacturing workers that’s blamed for helping push up unemployment is far smaller than believed, according to a study out today.

The study by Boston Consulting Group (BCG) says manufacturers may have openings they can’t fill, but it’s not because workers aren’t out there. It’s because companies are being too selective about who they hire and are unwiwlling to pay a competitive wage.

The report acknowledges a mild skills gap. U.S. manufacturers could use an additional 80,000 to 100,000 highly skilled employees—less than 1% of all factory workers and less than 8% of highly skilled workers, the study says. Workers in highest demand are welders, machinists and mechanics.

But that’s far less than the deficit of 600,000 skilled workers cited in a survey last summer by Deloitte and the Manufacturing Institute.

“There’s a relatively small skills gap that can be managed,” says BCG senior partner Hal Sirkin.

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It says 58% of high-skill manufacturing and engineering jobs remain open at least three to six months. But Sirkin says that’s partly because employers are not committed enough to hiring the workers.

A genuine skills gap would have pushed average annual wage growth 3 percentage points above the rate of inflation over the past five years, the study says, citing a common economic benchmark. Instead, manufacturing wages have grown roughly in line with a below-3% inflation rate.

{snip}

Also, he says, companies have sharply cut back training of entry-level workers. A skills gap, he says, doesn’t exist if manufacturers can train young workers with solid math skills to run computer-controlled machines within a few months.

{snip}

The study warns there could be a severe shortage by 2020 as Baby Boomers retire and manufacturers bring more production to the U.S. from overseas—if training programs aren’t expanded.

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  • Puggg


    Also, he says, companies have sharply cut back training of entry-level
    workers. A skills gap, he says, doesn’t exist if manufacturers can train
    young workers with solid math skills to run computer-controlled
    machines within a few months.

    They might be able to, because of Griggs vs Duke Power.

    •  I don’t care if you’re borderline mentally retarded, get in there and fix that generator!

  • JohnEngelman

    If there was a shortage of qualified business executives I doubt corporations would be pressing for the immigration of more business executives. 

    •  Or lawyers.

      • The__Bobster

        Or MSM reporters.

  • JohnEngelman

    When I applied for a contract position that would last for three to six months as a computer programmer I was told that I was competing with an applicant who lived in Cat Man Du, Nepal. 
     
    When the hiring manager asked why I had been unemployed for so long I answered, “That’s why.” 

  • JohnEngelman

    When I got a job as a computer programmer in 1990 my company trained me in their specialty at their expense, and gave me time to master my new skill. 
                           
    Now tech companies demand someone with years of specific experience who currently has a job performing those skills for someone else. 

    • The__Bobster

      A lot of H-1b Hindus lie about their skill sets on their resumes.

    • Rebelcelt

      John I used to place programmers such as yourself. Been out of that business a long time. Now all these indians that buy their degrees from diploma mill technical schools.They learn on the company dime whether the company realizes it or not.
      Good luck

      • RisingReich

         This explains a lot.  Thanks for sharing.

    • WhereIsOurPinochet

      I recently had the honor of training a nice young man from India who had just acquired his MS in Computer Science from a US News & World Report “Tier 4” state university. His job was as a short-term .NET developer. My expertise was in Java and I have a liberal arts BA.

      This dude comes in and sits down and the first thing I do is demonstrate our version control system. He can’t understand why he would ever need to use version control and I say forget it.

      Next, I run him through the basics of the small application he will be developing. He is just not getting it. I’m talking about how he needs to download data from a web service, but he needs to use threads because otherwise the UI will lock up. He hears this, pauses, and asks, “but the SQL database…” “SQL database? This is a web service, there is no database.” “But…. how do I query the data…” “You change the URL like this.” “But… the database…”

      His boss and I figured, OK, maybe he just needs a jumpstart, so I came in that weekend and it took me 6 hours to mock up a few classes and demonstrate asynchronous downloading from the web service – never having written a line of C# in my life. (At the time I was no coding genius either, with about 3 years total experience.)

      God as my witness, he left a month later without a single character of code to his name. I finished his app.

  • Where I live, a local community college and a high school is offering training in Mechatronics which is a combination of mechanical, electrical and computerized technologies that are used by manufacturing, packaging and other businesses. Students can earn an A.A. degree in Mechatronics, high school students are graduating to jobs that start out paying at least $17 an hour. 

  • IKantunderstand

    As technology advances, there will be less and less of a need for human workers. Robotics development continues apace, and yet we have people like Muppet man Grover Norquist saying we need MORE immigration. No, we don’t. We barely have enough jobs for Americans. It will only get worse in the future. Or, have we decided to retreat to the countryside and return to our agrarian roots? Are we being forced to become farmers? Are we going to see the fail of grocery stores and the  trucking in of  foods from the countryside? Because we have actually become the countryside? If that is where we are headed, why do we need a surplus of mouths to feed?   If we cede all manufacturing to offshore locations, (CHINESE!!!!) , where exactly is our economy going? I sincerely believe all the leftist progressives out there currently in contrtol of our society would like nothing better than to see our society reduced to a happy go lucky Kum Bayah organic  vegetarian society transporting themselves on bicycles while the Chinese drive around in new Beemers.  We should eliminate this as a possibility.

  • JohnEngelman

    Employers who complain that there are not enough qualified applicants are like women who complain that there are not enough men who are rich and handsome and men who complain that there are not enough women who are young and beautiful.
                             
    If American employers would stop looking for “the perfect candidate” and start hiring Americans they can train they would find plenty of useful employees. 
            
    American employers who say they need Mexican immigrants to perform work Americans won’t do would find plenty of Americans who would do the work if they paid living wages and offered decent benefits. 

    • You are right John, but so long as the border remains unsecured, the feds refuse to
      enforce laws against illegal invaders (and continue to sue those states trying to defends themselves from said invasion) and we have politicians
      pandering to these invaders; it will never happen. You and I both know it!

  • Ain’t Amurrican capitalism great?  The individual has been reduced to nothing more than an economic unit of production and consumption.

  • Everything you need to know about our so-called immigration policy can be found in this Forbs article:

    Earlier this month, Fed Chairman Alan Greenspan told an audience at Boston College that only immigration could uncap the limit to new hiring, which threatens to cause wage inflation.

    http://www.forbes.com/2000/03/28/feat2_print.html
    We are being flooded by immigrants, legal and illegal, for the sole purpose of keeping down wages.

    Increasing H-1B high tech visas ensures that high tech wages stay lower and more importantly, move down. Turning a blind eye to illegal immigrants ensures that factory and farm workers know not to grumble about low pay because they can be easily replaced by illegals who will work for slave wages.

  • anarchyst

    TRUE capitalism requires that a symbiotic relationship exist between those who invest in businesses, those who own the businesses and those that work to produce the goods.  Every properly functioning capitalist economy requires ALL THREE components  to be successful.
    It seems that most so-called “business schools” in the USA preach that the “bottom line” is “stockholder profits” to the exclusion of the other “two legs of the stool”.
    What is the difference between making a profit of 11 million dollars and having your product made here by your employees (who are also CONSUMERS), and making a profit of 12 million dollars by “offshoring” your facilities (and destroying your domestic customer base)? 
    What we have in the USA is not pure “capitalism”, but “crony capitalism”.  H1b visas also attest to that assessment.  Qualified AMERICANS are passed over for foreigners with questionable “credentials” (because they work “cheap”).
    Henry Ford was vilified by wall street for paying his employees a decent wage.  He singlehandedly CREATED a market where none had previously existed.  The price of his cars was decreasing while the middle-class was growing.  He did not trust wall street and banksters, with good reason.
    A parallel to wall street GREED exists today.  Many wall street “financial types” criticize successful businesses (such as Lowes and Costco) for “paying their employees “too much”) while at the same time collecting multimillion dollar “bonuses” for shepherding the economy into bankruptcy.     These are the same wall street types (the “best and brightest” from the prestigious “business schools”) that are responsible for the state of the world economy today by their nefarious and illegal bankstering practices. 
    IF I had my way, the day after the “crash”, these money manipulators would have been indicted, brought up on charges, prosecuted, convicted and given lengthy prison sentences for FRAUD.