Monday, March 4, 2013

Once again, it's low wages, NOT low skill levels

I couldn't help but crack a smile when I saw the following headline last week, "UWM professor: Wisconsin Skills Gap is a Myth," written by the Milwaukee Business Journal's
The latest counter-argument comes from Marc Levine, University of Wisconsin-Milwaukee professor of history, economic development and urban studies, and founding director of UWM’s Center for Economic Development.

Wisconsin business leaders and state legislators have said the skills gap is one of the biggest hurdles for many companies right now, particularly manufacturers. They say there’s not enough skilled workers in Wisconsin to fill thousands of openings.

“This skills mismatch, it is argued, is the central reason why unemployment remains high, even as job vacancies remain unfilled,” Levine said in his report. “This widely held view, however, is incorrect.”

Among Levine’s evidence:

•Top economists call the skills gap a myth, as high unemployment stems from “deficiency in aggregate demand and slow economic growth,” not workers’ lack of sought-after education or skills, Levine said.....

• There’s triple the number of unemployed workers as there are job openings nationwide, and two-thirds of the jobless would still be jobless even if every unemployed person was a perfect match for the existing jobs, Levine said.

• Wage data - “If Wisconsin employers were encountering a shortage of skilled labor, wages would be going up, but in Wisconsin real wages have declined since 2000,” Levine said. “By contrast, in states such as North Dakota and Wyoming, where there really is demand for and a shortage of skilled labor, caused by a boom in the energy sector, real wages have jumped by double digits since 2000.”

• Seventy percent of Wisconsin’s projected job openings through 2020 will require a high school diploma or less, countering advocates’ claims that future jobs will require more skills and education than Wisconsin workers have.
Levine's findings that it's low demand and low wages causing the high unemployment rates in these fields contradicts the Tim Sullivans and Scott Walkers of the world, who claim that the reason there isn't growth in Wisconsin's manufacturing-related areas is a lack of skills by prospective workers.

You can read Levine's full report here, and it's a good one. Let me give you a sample passage where Levine points out that Wisconsin is cranking out more highly-educated and skilled workers than ever:
In short, educational attainment data provide no evidence of a skills shortage, either in Wisconsin or Milwaukee. Quite the contrary: all the data point to consistently rising human capital formation in Wisconsin and, as we documented earlier, a workforce increasingly overqualified for the jobs available in the state’s stagnant labor market.

In addition, claims that Wisconsin is at a “competitive disadvantage” in economic development because of skills deficiencies –and that this is supposedly a key factor in explaining the state’s poor employment growth over the past decade-- are also without foundation. The educational attainment of the state’s workforce is around the national average, and Wisconsin ranks among the top half of states in educational attainment – a slightly higher rank today than in the 1970s and 1980s. According to the National Center on Educational Statistics, in 2010 Wisconsin posted the second highest public high school graduation rate in the country (91.1 percent), and the 10th lowest dropout rate (2.2 percent). In 2012, the American Physical Society conducted a “state-by-state science and engineering readiness index,” and found Wisconsin ranked 4th highest in the nation in AP calculus scores; 8th highest in the Science NAEP test, and 25th highest in the Math NAEP. And although the skills gap alarmists consistently castigate the job training and placement institutions in Wisconsin, both the U.S. Chamber of Commerce and the U.S. Department of Labor rank the efficacy of Wisconsin’s workforce development and training programs in the top half of all states.

In sum, there is little labor market evidence that Wisconsin faces a skills gap. Nor is there any evidence that Wisconsin is at a “competitive disadvantage” compared to other states in human capital formation and the nurturing of a skilled workforce. Consequently, as we will examine later, policies purporting to rectify the fake skills gap in Wisconsin will have little impact on the state’s real labor market problem: the stagnant growth of family-supporting jobs.
In other words, the "job creators" have failed, and have screwed over Wisconsin workers for well over the last decade with low wages, so understandably they have a problem filling their openings when they refuse to pay a proper wage (stupid supply and demand).

Not surprisingly, the oligarchs at WMC are trying to push back against Levine's study. WMC President Jim Morgan claimed he had anecdotal evidence from business owners that there is indeed a skills gap.
“We read the report and waited to get to the part where the professor talked to manufacturers,” Morgan wrote. “Unfortunately, he did not.”

Morgan said that WMC talked to more than 300 manufacturers last year, and they are struggling to hire because “the skills of the people in the pipeline don’t match the skills needed.”

“If the determination of what is actually going on in the marketplace is between a theoretical review of academic studies and data sources, or the reality of hundreds and hundreds of Wisconsin manufacturers who are trying to hire, we will trust the manufacturers,” Morgan said in his response
Yes, because business owners would NEVER cover up for their own deficiencies by blaming the workers for their failures. And why aren't the businesses doing their job by training these employees and making efforts to cultivate better employees and productivity? I'll tell you why, BECAUSE THEY'RE MOOCHERS trying to extract as much as they can out of a desperate workforce in a time of higher-than-normal unemployment.

And Levine's study backs up the trend we've seen in the last 40 years, where wages have declined as a percentage of GDP to the lowest level it's been since they've tracked the stat.

Methinks Mr. Levine has hit the mark with this one, and the job creators (who create nothing except a mechanism to line their own pockets) don't like the exposure. Because when it comes to growing our manufacturing sector, we don't have a skills gap, we have a LOW-WAGE PROBLEM, and that's not something that oligarchs and GOP politicians ever want to admit, because it'll also admit that the trickle-down mentality of trusting business owners is a failure. But you already knew that, right?

1 comment:

  1. I sure wish one of the MSM rags would do a story regarding the corporate backing of cutting funds for education, especially in technical schools, and then crying foul because there isn't an educated work force to choose from.