employment

Skilled Factory Workers or Cheap Skilled Factory Workers?

/ The Old Crank / 1 Comment

As I wrote earlier, the Washington Post published a story today on the alleged skills gap in the manufacturing sector in Michigan and other parts of the country. If you make your way all the way to the end of the story, after reading various employers lament the fact that the workers they laid off in 2009 now can’t work any of the newfangled machines that these companies installed during the recession, you get to this interesting paragraph:

The shortage of skilled workers has also pushed up wages, though executives said raising them too far could push more work to overseas plants. (my emphasis)

In other words, if you are one of those laid off workers who does invest time in the re-training required to get your job back, don’t expect a big return on that investment in the form of higher pay, or we will ship your job overseas.

The article closes with an anecdote that again raises the question as to whether at least some employers who complain about the lack of skilled workers are actually complaining about a lack of cheap skilled workers:

A Michigan company that makes camshafts for cars, as well as farm and mining equipment, has had ads out for at least six months for CNC machine operators and programmers. The pay runs from $15 to $21 an hour, a relatively good wage in this part of the country.

“The problem is as soon as we get someone in, one of our other guys will jump ship,” said Tyson De Jonge, engineering manager at Engine Power Components. “They get better offers.” (my emphasis)

The author of the piece accepts the company’s claim that they are paying a “relatively good wage” even though the evidence seems to contradict this assertion. It sounds like these folks are “jumping ship” because someone is offering them better pay somewhere else.

Anthony Carnevale: Skills Mismatch Not the Whole Story

/ The Old Crank

Whatever you think about the effectiveness of federal job training programs, Amy Goldstein’s story in Saturday’s Washington Post notes the basic problem with relying too heavily on job training to solve the country’s unemployment problem by itself.

Anthony Carnevale, the director of Georgetown University’s Center on Education and the Workforce, which has produced valuable research on the relationship between earnings and educational attainment—including the long-term value of a college education—acknowledges, according to Goldstein that “retraining can’t always overcome a scarcity of jobs.” She writes:

That skills mismatch, while real, is not the whole story, Carnevale says. At the moment, he points out, the country has 3 million to 4 million job openings. But if you add up the people who are unemployed, in part-time jobs because that’s all they could find or so discouraged that they’ve quit looking for work, he says, the country has more than 20 million people who could use a job. (my emphasis)

In other words, not enough jobs are out there, even if every single person who needed re-training received it. None of this means that re-training, investments in community colleges, and increasing access to higher education are bad policies, but it does suggest that there are other factors that need to addressed in order to fully address inequality and economic opportunity.

Interestingly, the Post comes back today with a story on the skills mismatch in some areas of the manufacturing sector.

High School Diploma, GED Requirement Apparently Dropped in Unemployment Benefits Extension Compromise

/ The Old Crank

(updated below)

According to press reports, the House-Senate committee charged with coming up with a compromise measure to extend the payroll tax reduction and unemployment benefits reached a tentative agreement last night. In the deal, Republicans have apparently dropped their proposal to require unemployed workers who lack a high school diploma or GED from collecting unemployment benefits until they acquire one or the other (or are enrolled in a class to acquire one). From a New York Times story on the deal this morning:

Democrats, elated after winning the Republican tax concession after months of clashes, said they had also been able to beat back new conditions that Republicans had wanted on jobless pay, like requiring beneficiaries to seek high school equivalency degrees…

From the Boston Globe:

Republicans also were expected to drop a proposal requiring unemployed people to enroll in GED classes to obtain benefits, and a GOP proposal allowing states to employ drug tests as a condition of receiving unemployment benefits would be scrapped as well. But Republicans won a provision requiring jobless people to be more diligent in job searches as a condition of receiving benefits.

It will be interesting to look at the final conference report to see what that last sentence means.

Also, it’s not entirelly clear to me what has happened with the drug testing requirement. The Globe report above says its been dropped, but an earlier report in Roll Call quoted a Republican aide saying that the deal included language allowing states “to drug screen workers seeking a job that requires a drug test or who lost a job due to a failed drug test.”

Politico, reaffirming that the high school diploma/GED requirement has been dropped, but suggests that the deal might have an extremely watered version of the drug testing requirement:

The deal would drop language called for by Republicans allowing states to drug test potential recipients of jobless benefits and requiring the unemployed to be in a GED program if they have not finished high school. Republicans said the deal’s language on drug testing will reaffirm existing law.

Update (6:00 PM): Roll Call reported this afternoon that House Republican leaders emerged from a Conference meeting this morning “tempering expectations” that a majority of their Conference will accept the deal. Democrats were also reportedly “quick to note that a deal is not yet final.”

Meanwhile, the Washington Post‘s Greg Sargent was forwarded talking points that House Republicans have been circulating about the deal, which includes the following:

“Those receiving unemployment benefits must be searching for a job, and every state will be allowed to drug screen workers seeking a job that requires a drug test or who lost a job due to a failed drug test.”

Rep. Reed Continues to Characterize Restrictions in House UI Proposal As Giving People “Tools”

/ The Old Crank

(edited slightly at 5:33 PM for for clarity)

In yesterday’s Christian Science Monitor story on the payroll tax cut and unemployment insurance (UI) extension negotiations, Rep. Reed (R-NY) is again quoted making the claim that the House’s proposal to deny unemployment benefits to those without a GED or high school diploma until they obtain one (or are at least enrolled in a class and making certain undefined progress toward such a credential) is actually providing “tools” to assist these individuals.

“Democrats are not willing to allow states the flexibility they need to give people tools to be reemployed,” says freshman Rep. Tom Reed (R) of New York. A strong advocate for these provisions, Congressman Reed says he’s now prepared to send unemployment benefits back to a 26-week level.

Again, as noted previously, there is nothing in this restriction that provides “tools” of any kind that will help people become reemployed. All the House proposal does is cut off benefits to those who are otherwise eligible but who lack a GED or High School diploma—unless they they can satisfy the vaguely-worded requirement that they are enrolled in a “class” and making “satisfactory progress” toward one of those two credentials (and only those two credentials). It doesn’t provide new funding for those classes, or any other “tools.”

Moreover the only “flexibility” provided for states in this proposal is the flexibility to opt out of the new restrictions the House wants to impose.

If you think the idea of providing more education and training opportunities to the unemployed sounds good, then the House UI proposal is not for you, because it does not actually do that. Instead, I suggest contacting your member of Congress and urging them to reauthorize the Workforce Investment Act, and to include an additional increase in funding for Title II of that act. That would result in putting actual adult education tools and resources in the hands of the unemployed—and others—seeking adult education opportunities.