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Do Skill and School Deficits Explain Why We Don’t Have Enough Good Jobs?

In the spring of 2015, Southern California Edison had employees training their replacements. The replacements were immigrants in the U.S. under the H-1B program that is supposed to be about importing skilled workers when employers cannot find skilled workers at home.[1]

So my nephew Bob has been watching the presidential campaign. He knows that each candidate has talked a lot about jobs, but he wonders why they aren’t talking more about education and training. He’s read about employers who complain about ill-prepared job applicants. If we want more jobs and more good jobs, why worry about trade deals or infrastructure spending? Why not help more people go to college or get job training?

I agree with some things Bob says. We should make college more affordable for the sake of equity. And there are lots of reasons to go to college besides job preparation. And there ought to be a better system of job training programs and apprenticeships in America. But even with such things, we won’t get many more good jobs. We’d get more people underemployed in jobs that did not utilize their skills, and we would be letting employers and conservatives off the hook for a decades-long campaign to quash wages.

The skills line of argument is popular in the business press and among centrist politicians. Bill Clinton loved it in the 1990s and he still spouts off about the importance of more training. And isn’t he right? Bob says everyone knows that more education pays off for workers. The more schooling you have, the higher your income and the less likely you are to be unemployed. So it looks like the job problem could be fixed if young people got more schooling and training.

Bob makes a good point. He must be learning something in his college courses–at least how to make an argument. It’s true that more schooling is correlated with higher incomes and lower unemployment. Last spring, among people 25 and older, those with only a high school degree had a 5.4% unemployment rate; those with at least a B.A. had a 2.4% unemployment rate. In the rat race for better jobs, it usually makes sense for individuals to acquire more education and relevant skills. So what=s really wrong with the skills-and-school explanation?

More skills and more education don’t lift the whole work force. Individuals with more education do better than those with less, but the working class as a whole doesn’t advance. There are many reasons for this, but it’s not because of a shortage of skilled labor. Millions of people are already overeducated for their jobs. The share of the work force with a four-year college degree, which was 20% in 1979, had grown to 34% in 2010. Did average wages increase with more skilled people at work? Hardly at all. In terms of purchasing power, the average wage of working-class employees (about 80% of the work force) are close to where they were in the early 1970s. But we probably have better-educated clerks at Sears and Macy’s and Starbucks.[2]

Most jobs don’t require high-level skills. Twenty of 30 occupations predicted to have the largest numerical growth in the coming years require nothing more than high school. Sure, there are plenty of high-skilled job openings, but many more positions for home health-care aides, customer-service representatives, sales clerks, laborers, janitors, food preparers, and food servers. Most of these jobs don’t require higher education. Sometimes college grads have to take jobs near the bottom of the occupational ladder. They bump less educated people who were perfectly qualified for jobs at Starbucks and the Olive Garden. Young people who have spent a small fortune at chef’s school end up flipping burger and earning the minimum wage.[3]

Bob is still puzzled. Something doesn’t make sense to him.“I’ve read about shortages of nurses and welders and factory managers? I read last year about factory owners who could not find people to run automated factories? You’re saying this means nothing?”

Answer: not nothing. But Alabor shortages@ are often short-term. Sometimes they are fabrications to disguise the fact that employers don’t want to pay a decent wage to attract applicants. Employers blame workers for lacking skills and discipline. They blame the schools. Never the employer class..

At times employers aren’t completely serious about filling vacancies. Every advertized position is not for a real job. Employers post a position that they may want to fill at some time, but they don’t fill it because they haven’t found the right applicant at the right price, or they fear that a recession or a government shutdown may come next year, or that Obamacare costs too much, or whatever. They conduct interviews but never hire. A while back, one young job-seeker reported that he received eighth-and ninth-round call-backs from three different companies, but two of the companies finally decided not to hire at all.[4]

Bob’s mother, my sister Isobel, doesn’t care for all of my intellectual flim-flam. She thinks the younger generation is spoiled. “Those millenials want too much. That’s why they can’t find a nice job.” Conservative economists agree. Workers are too picky. If they’d accept what’s being offered out there, there’d be no unemployment. And that’s true. If more of us worked for $7.25 or even the $2.23 that can be offered to tipped workers, there’d be more jobs. But is that the choice we should have to make?

While we are at it, Isobel, job-seekers aren’t the only picky ones. Employers can make it hard for workers, and new technologies help them. Internet postings have vastly increased the number of applicants for any job, so employers use filters to sift applications; in a millisecond, they eliminate many competent applicants. Sometimes employers demand work experience that the applicant could obtain only by working at the position they are applying for. During the recent recession and recovery period, some employers eliminated entire pools of workers, openly discriminating against long-term unemployed and older workers. They shunned people who have skills, experience, and–believe it or not–the ability to learn.[5]

Remember, many skills that are specific to a job are learned on the job. Even, history professors, who need graduate school to learn subject areas and historical methods, usually learn how to teach by doing it. I did.  When specific training can be acquired in educational institutions and it looks like it will pay off, people get it. Millions of people are learning general and specific skills right now in universities, community colleges, for-profit universities, and workshops. In World War II, Rosie the Riveter learned new skills because she wanted to make a contribution and because there were real jobs with decent pay waiting for her.[6]

If skills are in short supply, why don’t employers increase wages to attract workers? Some do. In 2011-2012, a worldwide shortage of skilled miners drove annual compensation to six figures. But many employers who claim they cannot find workers really want cheap workers. They don’t want to let the market work. A couple of years ago someone in the manufacturing sector predicted that factories would be short 800,000 skilled workers. Honestly? Does anyone believe this junk from a sector that has discarded millions of skilled and trainable workers? What we really find is a shortage of manufacturing jobs and worsening pay. Owners who complain about a shortage of skilled workers want to pay skilled factory workers fast-food wages. Recently, starting pay at Gen-Met, a metal plant outside of Milwaukee, was $10 an hour. That was below the already pathetically low U.S. poverty line. Some workers with AA degrees in this sector might advance to $18 after several years. But $18 an hour is lower than the average wage for the average working-class job, and that wage, a little over $20, is nothing to write home about.[7]

So Bob, we need to make college more affordable rather than less–Bernie was on the right track. We need better schools at all levels. And we need a better system of training and apprenticeship programs. But most of all we need higher pay and more good jobs. We need to legislate a decent national minimum wage; $15 is just the beginning. It is a disgrace that the federal minimum wage is still $7.25 and it is oh so sad that people who have been battered by lousy job markets are willing to vote for Donald Trump who doesn’t want the federal minimum raised and who has screwed his own contractors and workers. And second, we need direct job creation by the federal government in the private and public sectors. Not a few hundred thousand crappy temporary jobs, but five million new permanent jobs created over five years. We won’t get more good jobs by waiting on business. Nor will we get them when more people acquire a college degree. If we want good jobs, we have to make them.

 

Notes.

[1]. Somini Sengupta, ATech Firms Push to Hire More Workers from Abroad,@ New York Times (NYT hereafter), April 11, 2013,  accessed at nytimes.com on 4/12/2013.

[2].  Arguing that there isn’t even a shortage of educated workers in science, tech, and math fields is Daniel Costa, ASTEM Labor Shortages? Microsoft Report Distorts Reality about Computing Occupations,@ Economic Policy Institute Policy Memorandum #195 (Washington, D.C.: November 19, 2012); and Michael S. Teitelbaum, “Are We Losing the Tech Race?” NYT, April 20, 2014, A19. Unemployment rates by educational level are from BLS.gov data at LNS14027660 and LNS 14027662. On young college graduates, Teresa Kroeger, et al., “The Class of 2016: The Labor Market is Still Far from Ideal for Young Graduates,” at epi.org.

[3]. Peter Cappelli, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It (Philadelphia: Wharton Digital Press, 2012), 26, 45-57; Andrew Hacker, AWhere Will We Find the Jobs?,@ New York Review of Books, February 24, 2011, at nybooks.com/articles/archives/2011/feb/24/where-will-we-find-jobs; and John Miller and Jeannette Wicks-Lim, AUnemployment: A Jobs Deficit or a Skills Deficit?@, Dollars and Sense, January/February, 2011, 9-13. College share of the population in John Schmitt and Janelle Jones, AWhere Have All the Good Jobs Gone?@ (Washington, D.C.: Center for Economic and Policy Research, July, 2012). See also Steven Greenhouse, AIf You=re a Waiter, the Future is Rosy,@ NYT, March 7, 2004, Wk, 5.

[4]. Thomas L. Friedman, AIf You=ve Got the Skills, She=s Got the Job,@ NYT, Sunday Review, November 18, 2012, 1, 11. Mike McGrorty, ABuilding Trades: Entry and Success,@ unpublished and provided by the author, says there are usually good jobs for welders but some people cannot get through the training program which requires math and night school. However, the total number of job openings is not large in most locales. On the end of the nursing shortage, CNN Money, AFor Nursing Jobs, New Grads Need Not Apply,@ posted January 15, 2013, accessed 3/5/2013. On the building trades, Alana Semuels and Alejandro Lazo, ABuilders Say Good Help Is Hard to Find,@ LAT, May 8, 2013, A1, A13. Tiffany Hsu, AFactory Labor Shortage May Rise,@ LAT, October 16, 2012, B2; Harold L. Sirkin, AThe Coming Shortage of Skilled Manufacturing Workers,@ January 14, 2013, accessed at businessweek.com on 4/24/2013. Also Robert J. Samuelson, AEmployers Lack Confidence, Not Skilled Labor,@ May 5, 2013, accessed at washingtonpost.com on 5/6/2013; and Catherine Rampell, AWith Positions to Fill, Employers Wait for Perfection,@ NYT, March 6, 2013, accessed at nytimes.com, 3/7/2013. Views contrary to mine are Ricardo Lopez, AJobs for Skilled Workers Are Going Unfilled,@ LAT, June 8, 2012, B1, B4; and Claire Cain Miller, “The Numbers of Our Lives,@ New York Times Education Life, April 14, 2013, 18-19, on a shortage of data scientists.

[5]. Cappelli, 37-38, 61-64; Rampell; Brad Plummer, ACompanies Won=t Even Look at Resumes of the Long-Term Unemployed,@ Washington Post, April 15, 2013, accessed at washingtonpost.com on 5/8/2013; and Paul Krugman, AThe Jobless Trap,@ NYT, April 21, 2013, accessed at nytimes.com, 4/23/2013.

[6]. View the government film, Glamour Girls of 1943. Also Patricia Cohen, “As Demand for Welders Resurges, Community Colleges Offer Classes,” NYT, March 10, 2015, accessed at nytimes.com, 3/10/2015.

[7]. Cappelli, 37. Adam Davidson, ASkills Don=t Pay the Bills,@ NewYork Times Magazine, November 25, 2012, 16, 18.

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Frank Stricker is in the National Jobs for All Coalition. He taught history and labor studies at CSUDH for thirty-five years. He has just written What Ails the American Worker? Unemployment and Rotten Jobs: History, Explanations, Remedies. For some sources behind this essay, e-mail frnkstricker@aol.com.

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