We Need More Skilled Workers (Because We Won’t Train Them)

Part of the reason politicians cite for more college education has to do with a common gripe by American business owners: we don’t have enough skilled workers. An article in The Economist earlier this year explained that “America’s problem with training was laid bare in a report published last year by Deloitte, a consultancy firm, and the Manufacturing Institute. It identified 600,000 positions that were going unfilled because there were too few qualified skilled workers.” But if more workers go to college (of some sort) we’ll finally have all of the educated people we need. And then the economy, presumably, will flourish. Is this really true?

It’s a common talking point for sure. As President Bill Clinton put it in his speech to the Democratic National Convention last month:

There are already more than 3 million jobs open and unfilled in America, mostly because the people who apply for them don’t yet have the required skills to do them. So even as we get Americans more jobs, we have to prepare more Americans for the new jobs that are actually going to be created. The old economy is not coming back. We’ve got to build a new one and educate people to do those jobs.

But a recent report by the Boston Consulting Group indicates that’s not really an accurate assessment of the situation. According to an article by Paul Davidson in USA Today:

The study… 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 unwilling to pay a competitive wage.

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.

A real skills gap, after all, would mean employers would be willing to pay more for skilled workers; they aren’t.

The report does indicate a “mild skills gap.” Apparently manufacturers would like about 80,000 to 100,000 skilled employees. The Deloitte study referenced above indicated the economy needed some 600,000 skilled workers.

Not really. What’s happening here is that U.S. manufacturers simply changed their priorities in to the recession. They’re doing just fine with the workforce they’ve got; they cut staff and are producing more with fewer employees. More skilled workers might be nice, but companies aren’t willing to pay much more to obtain (or train) them.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer