The Myth of the Skills Gap

On July 12th, 2013 handyman spokesman Mike Rowe took a break from what was likely a poop cleaning fetish film, or more commonly known as reality TV, to make an appearance on Real Time with Bill Maher.  His raison d’être on the show was to inform us of potentially millions of jobs currently unfilled due to a lack of qualified personnel. His assertion was Americans don’t value hard work anymore, and there are too many young people that want to be entertainers instead of work in far less glamorous fields where a math, science, or a skilled labor background may be requisite.

For a while now I’ve been hearing just such rumblings of a latent job market, where jobs are going unfilled for months due to a lack skilled workers.  This has always struck me as odd, because we don’t have any supply shortages that would indicate companies can’t deliver products or services.  Quite the opposite actually.  If a company really was that desperate to fill a position wouldn’t they train the most qualified of the unqualified to fill the position? Afterall, this is how it’s always been.

And since when did training employees become such an arduous process for companies?  In less efficient times it was not at all unusual for someone to learn on the job.  Finding on the job training for a respectable wage now, is about as likely as finding a leprechaun riding a velociraptor.  Companies have become so averse to training, they don’t want to take a chance on a candidate that doesn’t have experience with the right email program.  Esoteric lists of qualifications have become the norm in job postings, and employers pay little regard to candidates who have a related skill set that is close, but not exactly the skill set desired.

If there truly was a sizable deficit in the labor market then companies would be in a hiring frenzy and willing to train, but that’s not happening.  There has not been a quantifiable shift indicating companies are now offering significantly higher pay, hiring less qualified candidates, or in anyway moving from the status quo.  So let me venture a guess to what is actually occurring here.

First let’s dispel the notion that companies with unfilled jobs simply throw their hands up in the air, proclaim there is no one qualified to do the work, and thus the work never gets done.  This is not happening.  The niche labor is done by someone obviously, or our economy would simply crumble every time there are jobs that go unfilled.  If a company cannot find a qualified individual for the salary they are offering, the business will end up contracting out the work to a party capable of fulfilling their need.

The process goes something like this, at the end of each fiscal year accountants peruse their ledgers for waste, and lo and behold they are aghast at the wasteful spending for contracted work.  The CFO assembles a cadre of management and espouses to them the benefits of doing the work in house, instead of wasting piles of money on experienced contracting businesses.  Management briefly ponders the suggestions, deems the accountants to be financial wizards, and then sets out to hire the people with right qualifications.  The right qualifications being, everything the contractor was providing, with years of experience behind them, only now paying their would-be employee a fraction of what they are paying the contractor.

As these companies don’t have much experience in this new realm of operation they don’t have training programs available, and after a quick cost-benefit analysis they see that training someone to do that job, and getting the experience behind them, doesn’t add up to savings.  Thus their relatively well paid job ends up unfilled.  Companies shake their heads in frustration, and wonder what’s wrong with people that are not willing to do what it takes to be their perfect candidate.  Can’t Americans see there is a lack of well paying jobs out there, and here they are offering a high paying job.  They are saviors to the economy, but all the populace just wants to do is twitter their lives away.

In truth, contractors in specialized fields make a lot more money than companies attempting to vertically integrate are willing to pay an employee, while often creating more jobs by hiring support staff.  Training more people (presumably through trade school or college, since companies won’t waste their own money) to compete with existing contractors means lower wages for both employees in niche fields, and fewer jobs in contracting businesses.  I can see why larger businesses would be supporters of Mr. Rowe’s cause, but it’s no solution to our unemployment problem.  In fact, unless this unfilled labor demand is being fulfilled by foreign contractors, then the net result of filling these jobs means less jobs in our economy, and lower paid people doing the same work.  Two things we don’t need.

So while yes, there are likely many niche jobs available requiring skilled labor, however filling them only means someone else is out of a job, with an end result that will do very little to cure the ills of our economy.

About

You may reach me at jason.holland@reasonbowl.com Jason Holland is a hologram of an actual writer. He is the interdimensional representation of living earth here to tell tale of liberty of the human spirit. To bring an end to the age of reductionist materiality, superficial division, and egotism, and usher in the age of the idea, the age of reason, age of diplomacy, the age of spirit, the age of kindness and forgiveness. A hologram pushing the quantum vibrational fields into aligned rigidity of aware consciousness one quark at a time.

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