Experts say joblessness not due to skills gap

Oldgamer

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Jan 15, 2013
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Community College of Allegheny County's North Fayette campus has classrooms filled with the gear and gadgets that are commonly seen in advanced manufacturing.

It's no wonder that President Barack Obama and Vice President Joe Biden visited the campus Wednesday to push a job training initiative.

The school has a laboratory equipped for the study of advanced manufacturing, particularly advanced mechatronics/integrated systems technology, which is understanding how the systems of a manufacturing plant come together in terms of hydraulics, electrical systems and mechanical systems.

And while economists think it is always appropriate to have job training available, they are quick to add that job training will not solve the systemic problems that are causing high unemployment rates in either the region or the country.

The problem lies not in the lack of skilled workers, but in the lack of jobs, some experts say.

Economists say the best way to determine if there is a lack of skilled workers for a job is to see if employers are raising wages for that job.

The latest data from the Pennsylvania Department of Labor and Industry show that in January, the starting wage for openings in manufacturing jobs was lower in the Pittsburgh metropolitan statistical area than it was in January 2009, even though there were slightly fewer job openings in 2009.

The starting wage in manufacturing in the seven-county Pittsburgh region fell from $19,855 in the beginning of 2009, half a year before the end of the Great Recession, to $18,828 this January, or $3,000 less than what the wages would have been if they kept pace with inflation 41/2 years into the recovery.

"Every time you hear someone say 'I can't find the workers I need,' add the phrase 'at the wage I want to pay'," said Heidi Shierholz, an economist for the Economic Policy Institute, a Washington, D.C., economic research organization.

When Ms. Shierholz compared the report from the Bureau of Labor Statistics on the number of job openings by industry with data from the U.S. Census on the number of people who are unemployed by industry, she found there are more unemployed people than jobs in every industry.

In manufacturing of durable goods, for instance, there were 576,600 unemployed workers for 162,600 job openings nationally. In construction, there were 895,800 unemployed workers, but just 116,800 job openings.

The Pittsburgh region was one of the first to recover the number of jobs it had before the economic collapse, but that still has not kept pace with the growing labor pool.

Mark Price, a labor economist for the Keystone Research Center in Harrisburg, said the state needs another 53,000 jobs to make up for the number of jobs still missing since the recession and then 204,000 more jobs to keep up with Pennsylvania's growing population.

"We've recovered much of what we lost since 2007, but we haven't made up for the new people who have entered the labor market," he said.

Link to article

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So in a nutshell what they are saying is, there are plenty of skilled workers out there but corporations and companies just don't want to pay what they are worth. They want to low ball workers. LOL typical...
 
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Engineer

Elite Member
Oct 9, 1999
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I know that there is a shortage of people doing what I'm doing (verified by many recruiters) but that hasn't stopped many companies from offering wages that haven't been this low in over 20 years (with ZERO chance of getting anyone). Part of the 'skills gap' is a 'wage gap'...employers don't want to pay what is needed to attract the skills.
 

realibrad

Lifer
Oct 18, 2013
12,337
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I know that there is a shortage of people doing what I'm doing (verified by many recruiters) but that hasn't stopped many companies from offering wages that haven't been this low in over 20 years (with ZERO chance of getting anyone). Part of the 'skills gap' is a 'wage gap'...employers don't want to pay what is needed to attract the skills.

If the skills were needed, the employers would likely be paying a wage to attract them. What is more likely is that the labor demand is being filled by people who are willing to live a cheaper lifestyle compared to the American standard. I think Southpark had a great episode about this very topic...
 

Londo_Jowo

Lifer
Jan 31, 2010
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Yet, in the heavy industrial mechanic fields the wages and benefits are high but it's difficult to find people to work. Though it's good for those that work in the field as they're enjoying the best wages and benefits they've ever seen.
 

Engineer

Elite Member
Oct 9, 1999
39,234
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Yet, in the heavy industrial mechanic fields the wages and benefits are high but it's difficult to find people to work. Though it's good for those that work in the field as they're enjoying the best wages and benefits they've ever seen.

and your story verifies exactly what the OP is stating...if there is a shortage of workers because of a skills gap, the wages for said type of workers would be going up or skyrocketing, as is the case for the heavy industrial mechanic fields you mentioned.

If the wages aren't going up, there is no shortage or it's just a ploy to bring in cheaper, foreign workers.
 

glenn1

Lifer
Sep 6, 2000
25,383
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If the wages aren't going up, there is no shortage or it's just a ploy to bring in cheaper, foreign workers.

Or the "job" doesn't really exist unless they can find someone to do it for fairly cheap. An inexact example would be lawn mowing - if you're the local kid offering to cut my lawn for $10 a pop then I might splurge for it, whereas if you were a professional lawn service asking $100 I'd probably cut it myself.

My guess is that if really was a mission-critical job position, they'd offer the salary needed to fill it.
 

Londo_Jowo

Lifer
Jan 31, 2010
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and your story verifies exactly what the OP is stating...if there is a shortage of workers because of a skills gap, the wages for said type of workers would be going up or skyrocketing, as is the case for the heavy industrial mechanic fields you mentioned.

If the wages aren't going up, there is no shortage or it's just a ploy to bring in cheaper, foreign workers.

No, the problem is young people want to work in nice offices or air conditioned buildings. After all their Mommy told them they could be anthing they wanted to be. Most young people don't make it to the 90 day mark, many going back to their low paying McJobs. They would rather be in air conditioning making less than $10/hr than working in the environment making $20/hr.
 

Veliko

Diamond Member
Feb 16, 2011
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No, the problem is young people want to work in nice offices or air conditioned buildings. After all their Mommy told them they could be anthing they wanted to be. Most young people don't make it to the 90 day mark, many going back to their low paying McJobs. They would rather be in air conditioning making less than $10/hr than working in the environment making $20/hr.

Could you give any actual examples of this?

As it just sounds like a complaint about the youth of today.
 

Zebo

Elite Member
Jul 29, 2001
39,398
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Econ 101. Supply and demand.

Export jobs for goods we consume (see trade deficit) there is less demand for labor here and labor prices go down.

Added to that - Import more labor, 2m legal since passage of Cruz' immigration bill in 2013 and untold undocumented a year makes a labor glut with more jobless and low labor prices.

Not sure of any economy in the world that imports labor with a high unemployment rate and massive people on public assistance but we do since congress is controlled by business lobbyists.
 
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Zebo

Elite Member
Jul 29, 2001
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Could you give any actual examples of this?

As it just sounds like a complaint about the youth of today.

There is some truth to that. Companies love foreign labor due to better work ethic and more compliant. Good luck finding an american kid who will roof a house 140 degrees in sun for $12-16 an hour. But there is always two sides to the coin. Comfortable working conditions were hard battles are we sure we want to give that up in a race to the bottom?
 

Londo_Jowo

Lifer
Jan 31, 2010
17,303
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Could you give any actual examples of this?

As it just sounds like a complaint about the youth of today.

I see this occurring every day where I work and in client's plants. I have friends who now work for competitors who are experiencing the same problem when it comes to building their business/ preparing for future.
 

boomerang

Lifer
Jun 19, 2000
18,890
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The OP has found an article that matches his views. Congrats, you think you've found the root cause of low employment in the nation. A simple answer suffices for people who think in a simple fashion.

In reality, the situation is much more complex and here is an article that touches on another facet of the problem. Why, with staggering unemployment levels and falling wages, is our nation waging a campaign to import illegals? Why was it soliciting bids from vendors in January to bus these people around? Why is our government, in a purposeful fashion, taking on poor, uneducated people from other countries that will need to be fed, clothed, sheltered and educated as well, to then ultimately become unemployed? It's easily recognized as self-destructive behavior. But it's purposeful. Why?

On Immigration, It's Time to Defend Americans
 
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Londo_Jowo

Lifer
Jan 31, 2010
17,303
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There is some truth to that. Companies love foreign labor due to better work ethic and more compliant. Good luck finding an american kid who will roof a house 140 degrees in sun for $12-16 an hour. But there is always two sides to the coin. Comfortable working conditions were hard battles are we sure we want to give that up in a race to the bottom?

I wonder if refineries, chemical plants, paper mills, and power plants will start putting boilers and machinery in air conditioned spaces in the future
 

Matt1970

Lifer
Mar 19, 2007
12,320
3
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There is some truth to that. Companies love foreign labor due to better work ethic and more compliant. Good luck finding an american kid who will roof a house 140 degrees in sun for $12-16 an hour. But there is always two sides to the coin. Comfortable working conditions were hard battles are we sure we want to give that up in a race to the bottom?

There is a LOT of truth to that. The guy I do some summer work for can't even get people to show up to work. Granted we aren't in the elements all the time but it does happen. Within 2 years someone could easily be making more than twice minimum wage. That or work your $7.25/hr air conditioned McJob with 25 cent a year raises complaining this is all you can find.
 

Engineer

Elite Member
Oct 9, 1999
39,234
701
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No, the problem is young people want to work in nice offices or air conditioned buildings. After all their Mommy told them they could be anthing they wanted to be. Most young people don't make it to the 90 day mark, many going back to their low paying McJobs. They would rather be in air conditioning making less than $10/hr than working in the environment making $20/hr.

There is truth to that but that doesn't change the fact that if there is a shortage of needed labor, the wages for needed labor will go up to fill it or the supply will be pulled from elsewhere to fill the shortage. If the companies needs these jobs filled, they will pay for them to be filled at some point. The OP states that is not happening (i.e. wages are still not rising even on the 'skills gap' jobs).
 

IndyColtsFan

Lifer
Sep 22, 2007
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Companies forget basic economics and advertise many jobs at insulting pay rates given the "requirements" listed for the job. In the last few years, they got away with it because many unemployed people were desperate and would take anything. That's a shortsighted philosophy because everyone knows that once the economy picked up, those people would flee in large numbers.

What I'm seeing in many positions now is that a company will post the salary at a ridiculously low wage and the position will be advertised for months at that same wage. My suspicion is that they're trying to "prove" they can't find anyone and will try to go the H1B route.

I've had a couple of conversations with potential employers recently and the wages were just too low given the job requirements and responsibility. One case was a huge university and another case was a large not-for-profit. In both cases, they both told me they were having NO luck finding anyone and I told them bluntly it was because their wages were too low. At least the university wasn't far off and with its sweet benefits, you could probably make the argument that it might be worth it. The NFP, however, was insultingly low and them being a NFP isn't an excuse in my book since you know that their president is probably paid a large salary.
 

Engineer

Elite Member
Oct 9, 1999
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From my perspective wages are rising, where else can you find people who do not have a college degree have a 6.figure salary or attain from $80k - above 6.figures with overtime?

Wages are rising in your field(s) because there is a true need for skilled jobs and there is a skills gap actually there. If other fields claim skills gap for 'needed jobs' yet don't raise wages, that would tend to tell me that either they don't need the jobs filled and are blowing smoke or that there isn't really a skills gap and they are just hoping to bring in cheaper labor, all while blowing more smoke.
 

Engineer

Elite Member
Oct 9, 1999
39,234
701
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Companies forget basic economics and advertise many jobs at insulting pay rates given the "requirements" listed for the job. In the last few years, they got away with it because many unemployed people were desperate and would take anything.

My example of the Japanese plants offering $15 to $25 per hour for experienced controls engineers is exactly what you're talking about. You won't find an experienced technician for $25, much less a full blown 5 year engineer, especially with the demand for that position right now.

I'm guessing that the companies are working their people into the dirt to keep up right now while waiting for the jobs to be filled...but they never do.
 

IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
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My example of the Japanese plants offering $15 to $25 per hour for experienced controls engineers is exactly what you're talking about. You won't find an experienced technician for $25, much less a full blown 5 year engineer, especially with the demand for that position right now.

I'm guessing that the companies are working their people into the dirt to keep up right now while waiting for the jobs to be filled...but they never do.

When they can't find workers at this rate, they don't realize basic economics would dictate raising the wages until they CAN find someone to hire. Instead, they start whining and complaining about "lack of candidates."
 

michal1980

Diamond Member
Mar 7, 2003
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No, the problem is young people want to work in nice offices or air conditioned buildings. After all their Mommy told them they could be anthing they wanted to be. Most young people don't make it to the 90 day mark, many going back to their low paying McJobs. They would rather be in air conditioning making less than $10/hr than working in the environment making $20/hr.

all you are saying is the work is not worth the salary. And that unless someone is an illegal that is living of fear of deportation, they wont do that job for that wage.
 

Londo_Jowo

Lifer
Jan 31, 2010
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all you are saying is the work is not worth the salary. And that unless someone is an illegal that is living of fear of deportation, they wont do that job for that wage.

Show me where a non-skilled person right out of high school can start at $20/hr. Will receive benefits (medical/dental/vision/disability) and machinery specific training once they go beyond their 90 probation period. Average wage for mechanics that have 5 years of service is $26/hr. They get paid 1.5 time wage after 8 hrs in a day and double time after 12 hours in a day. Saturdays 1.5 times wage for first 12 hours double time after that. Sundays double time all day long. Holiday the get double time all day plus 8 hour holiday pay.

Illegals can't perform this work due to criminal background checks required to work for companies that provide services to refineries, chemical plants, and power plants. Many plants requite TWIC cards to enter their premises.

http://www.tsa.gov/stakeholders/transportation-worker-identification-credential-twic®

Another problem with some of these young people they are fired due to failing company and client required drug/alcohol testing. Many plants perform spot drug/alcohol testing when entering the contractor gate during maintenance turnarounds.
 

Engineer

Elite Member
Oct 9, 1999
39,234
701
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Show me where a non-skilled person right out of high school can start at $20/hr. Will receive benefits (medical/dental/vision/disability) and machinery specific training once they go beyond their 90 probation period. Average wage for mechanics that have 5 years of service is $26/hr. They get paid 1.5 time wage after 8 hrs in a day and double time after 12 hours in a day. Saturdays 1.5 times wage for first 12 hours double time after that. Sundays double time all day long. Holiday the get double time all day plus 8 hour holiday pay.

Illegals can't perform this work due to criminal background checks required to work for companies that provide services to refineries, chemical plants, and power plants. Many plants requite TWIC cards to enter their premises.

http://www.tsa.gov/stakeholders/transportation-worker-identification-credential-twic®

Another problem with some of these young people they are fired due to failing company and client required drug/alcohol testing. Many plants perform spot drug/alcohol testing when entering the contractor gate during maintenance turnarounds.

What you're describing is not a skills gap job because you don't need the skills to get the job, you just need to show up with a good work ethic and certain aptitude. You are indeed talking about a shortage gap in that nobody wants to work there (at least until wages are high enough to entice them to do so - same as a skills gap job).
 

Veliko

Diamond Member
Feb 16, 2011
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Show me where a non-skilled person right out of high school can start at $20/hr. Will receive benefits (medical/dental/vision/disability) and machinery specific training once they go beyond their 90 probation period. Average wage for mechanics that have 5 years of service is $26/hr. They get paid 1.5 time wage after 8 hrs in a day and double time after 12 hours in a day. Saturdays 1.5 times wage for first 12 hours double time after that. Sundays double time all day long. Holiday the get double time all day plus 8 hour holiday pay.

Illegals can't perform this work due to criminal background checks required to work for companies that provide services to refineries, chemical plants, and power plants. Many plants requite TWIC cards to enter their premises.

http://www.tsa.gov/stakeholders/transportation-worker-identification-credential-twic®

Another problem with some of these young people they are fired due to failing company and client required drug/alcohol testing. Many plants perform spot drug/alcohol testing when entering the contractor gate during maintenance turnarounds.

If so few people are willing to do the job then it means the conditions and wages aren't good enough.