It's not that most people's favorite subject these days is why our work life is in real trouble in America. It's that when Adam Davidson of "Planet Money" speaks or writes about "the economy explained," he's unfailingly interesting and -- like most knowledgeable people who are also able to communicate -- he makes everyone around him interesting, too. Today he writes in the New York Times about why "skills don't pay the bills."
Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.
The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages. ...NYT
And the dead-end feeling doesn't end with Davidson's explication of the serious situation we're in with respect to work in America -- and, of course, the government's response to the situation. It's important to hold onto a thought here: the government is us. We make it; we choose the people to run it. So this isn't somehow a government problem for which we the people have no responsibility. We made choices; we got the results.
Many of the results become evident in the comments on Davidson's Times article, a string of responses as interesting and telling as any I've seen.
"Could it be that capitalism works well until the population of available workers is significantly greater than the number of workers required to produce efficiently?" ...Vanessa Hall, MO
"Mr Davidson, it would be interesting if you could approach this topic again from another angle - why has Germany managed to retain its manufacturing base in the face of international competition, while paying its workers good money?" ...Fennella, Germany
"Our CNC machinists in NJ produce highly accurate optics. We pay between $20 and $25 per hour, depending on skill set and experience and we are not unionized. We have been looking for a machinst for the last 6 months and still did not find the right match. In case somebody is looking for a job, let me know!" ...Alex, NJ
So far no one has mentioned the huge increase in the expectations of shareholders who fantasize their investment into being their get-rich-quick solution. But hovering out there, beyond the outrageous pay gaps, is the fact that we're trading national prosperity for investor's outsized profits. The though of investing more in someone else's education and training just doesn't appeal compared with the numbers in our portfolio.
"Working as an advisor on foreign investment in China a few decades ago, I knew the manager of a newly established Babcock & Wilcox factory. They made high-pressure boilers for power plants -- a very technical business, intensive in engineering skills. This man explained that his competitive advantage was cost-effective Chinese engineers. I have to train them but when I'm done I have a perfectly competent engineer at 10% of the cost in the US.' " ...Joel Bergsman, MD
And along with the education and skills gap, we are being turned against collective bargaining and the opportunity for education, training and retraining.
"In Europe, the building "engineeers" are required have training and a degree and work for a union. The technicianas are paid well and respected. The buildings work, the trains work, the cars work. In the US, I have come to believe that we will continue to live in a mostly broken society and think that this is normal. We get what we pay for." ...TJJ, NM
"These [community college] students are literally bankrupting themselves to get the advanced training they need to get a job that will pay them a LIVING wage. And $10 an hour won't cut it, especially when it comes time to pay back Uncle Sam for the loan they took out to go back to school. The article does give me some hope though, that American workers are finally beginning to get some backbone. Corporate owners have had things their way for quite some time now. They have successfully demonized Unions and convinced many workers that they must accept whatever crumbs are thrown their way in the way of wages and much reduced benefits (if any). Although the author decries our education system, it seems that some workers are at the very least becoming educated enough to spot a bad deal when they see one." ...Wendy, NJ
"We must reform our inefficient colleges, medical and legal systems, and local government if industrial workers are to get a fair shot, since under binding US trade agreements, we can't give them import tariff protection. The productivity of our educational system in particular is truly miserable and needs to be fixed." ...Amanda, NY
"This article was an odd way to say that America has been reduced to a feudal state. Minimum education and minimum wages for the masses and a bewildered, obtuse plutocratic class confused as to why the economically and socially deprived masses are not highly educated, happy slaves." ...Socrates, NJ
Economist Paul Krugman is impressed, too, with Davidson's analysis. He writes:
Kudos to Adam Davidson for some much-needed mythbusting about the supposed skills shortage holding the US economy back. Whenever you see some business person quoted complaining about how he or she can’t find workers with the necessary skills, ask what wage they’re offering. Almost always, it turns out that what said business person really wants is highly (and expensively) educated workers at a manual-labor wage. No wonder they come up short.And this dovetails perfectly with one of the key arguments against the claim that much of our unemployment is “structural”... Paul Krugman, Economics and Politics