New Study: Skills Gap in Manufacturing Mostly About Math and Reading Skills 

Phys.org reported earlier this week on a soon-to-be published new study by Andrew Weaver of the University of Illinois and Paul Osterman of the Massachusetts Institute of Technology that takes a critical look at the claims of a skills shortages in the U.S. manufacturing sector.

The paper would appear to be a follow-up or expansion of a paper that Weaver and Osterman produced for the Economic Policy Institute in 2014.

In general, Weaver and Osterman find that U.S. manufacturers’ skills gap claims are overblown, and the most of time they are in fact able to hire the skilled workers they are looking for. But the paper is more nuanced than that. By looking more closely at the precise skills manufacturers are seeking, they were apparently able to identify the types of skills that, when in demand, are most closely associated with longer-term vacancies. What jumps out from their results is that the demand for higher-level math and reading skills is a much more significant predictor of long-term vacancies than other skills:

“What fits with conventional wisdom is higher-level math skills being predictive of having a higher level of long-term vacancies. The other predictive skill demand, surprisingly enough, is higher-level reading skills,” Weaver said. “This debate frequently gets framed as a pure science-, technology-, engineering- and math-skills shortage, but it turns out reading also is a robust predictor of longer-term hiring difficulty. It certainly gives a more nuanced picture of skill challenges in manufacturing, and it really cuts against many of the prevailing narratives about the American workforce.”

If true, this has important implications for adult education policy and the federal workforce system under WIOA, which in my experience is driven more often than not by an underlying assumption that math and literacy skills are essentially prerequisites for the attainment of the industry-specific and more technical skills that employers seek. In other words, while I know that there is an emphasis on program models that integrate both, there is a perception, on the ground, at least, that adult education essentially feeds the training system. That’s a bias that’s been baked into the system for some time. But what is suggested by this study is that the most urgent demand is for academic skills: workers who are highly skilled in math and reading, period. In other words, to put it simply, improving literacy (beyond even just basic literacy) would most directly address the skills gap (at least in manufacturing). Which in turn suggests, perhaps, a need for a greater emphasis in our workforce system in those skills—and perhaps an even greater challenge for adults in the manufacturing workforce with very low literacy to achieve not just greater proficiency but “higher-level” skills in both math and reading.

That’s my quick take. Take it with a grain of salt, as I haven’t had a chance to read the yet-to-be-released study, or even finish my first cup of coffee for the day. One thing missing from the Phys.org story is whether the paper includes any discussion about the degree to which wage stagnation has created an appearance of a gap (i.e. the workers are there, just unwilling to accept the wages being offered), but based on Weaver and Osterman’s earlier work on the skills gap, I would expect that it is.

Update, 4:30pm ET: Fixed some typos and grammatical errors that made it into the original post, which was rather hastily constructed this morning. I should remember to finish that cup of coffee before pressing “send.”

Anthony Carnevale on PIAAC: Economic Mobility Hindered By Skills Gap

(Updated Below)

The New York Times relied on just a single source for their article on the PIAAC survey results (other than quoting from Secretary of Education Arne Duncan’s press release), Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce:

In the most highly educated population, people with graduate and professional degrees, Americans lagged slightly behind the international averages in skills. But the gap was widest at the bottom; among those who did not finish high school, Americans had significantly worse skills than their counterparts abroad.

“These kinds of differences in skill sets matter a lot more than they used to, at every level of the economy,” Dr. Carnevale said. “Americans were always willing to accept a much higher level of inequality than other developed countries because there was upward mobility, but we’ve lost a lot of ground to other countries on mobility because people don’t have these skills.” (my emphasis)

UPDATE 10/10/13: The Times followed up their initial report with a more in-depth piece by Eduardo Porter, “Stubborn Skills Gap in America’s Work Force,” that looks at the study in the the context of the ongoing skills gap debate:

The O.E.C.D. study lands in the midst of a contentious debate over whether the United States faces a skills shortage. Over the last couple of years, employers have been saying that they can’t find enough skilled workers. Economists and other commentators have pointed out that employers would probably find them if they offered higher wages.

The report suggests that the sluggish employment growth since the nation emerged from recession probably has little to do with a skills deficit that has been a generation in the making. But it pretty forcefully supports the case that this deficit is an albatross around the economy’s neck.

The recession did not fundamentally change the structure of the economy in terms of the supply and demand for skills or education,” argues Jonathan Rothwell of the Brookings Institution, who produced a study last year about the education gap afflicting the job markets of America’s largest cities. “Before the recession, inadequate education was a major problem. It continues to be.”  (my emphasis)

Nuance on Skills

When the New York Times publishes a scathing editorial against the whole notion of a skills gap, it alarms me, because so much of adult education and training advocacy has coalesced around this idea. It also alarms me because whatever the economic data tells us about the root causes of unemployment, it doesn’t take away from the fact that we still have a substantial number of people who are trying to improve their basic skills, enroll in job training programs, and/or acquire industry credentials. We wouldn’t have waiting lists for services if this wasn’t the case.

Many economists have been arguing for some time that the skills gap has not been a major cause of unemployment. But a case for investing in skills doesn’t need to be dependent on this argument. I’ve often cited an old blog post from Jared Bernstein as an example of a way to argue for skills that isn’t dependent on proof of a skills gap.

The Times piece suggests that skills gap arguments will be increasingly met with skepticism. It’s going to be important not to let that turn into an argument against investing in skills altogether.

New York Times Not Super Enthused About the Skills Gap Argument

The New York Times Editorial Board has come down hard—and I mean really hard—on the idea that our stubbornly high unemployment rate can be blamed on a skills gap (the notion that good jobs are going unfilled due to a lack of qualified applicants). The Times calls this a “corporate fiction” designed as excuse to keep wages down and get the government to pay for training corporate America doesn’t want to pay for:

If a business really needed workers, it would pay up. That is not happening, which calls into question the existence of a skills gap as well as the urgency on the part of employers to fill their openings. Research from the National Bureau of Economic Research found that “recruiting intensity” — that is, business efforts to fill job openings — has been low in this recovery. Employers may be posting openings, but they are not trying all that hard to fill them, say, by increasing job ads or offering better pay packages.

Corporate executives have valuable perspectives on the economy, but they also have an interest in promoting the notion of a skills gap. They want schools and, by extension, the government to take on more of the costs of training workers that used to be covered by companies as part of on-the-job employee development. They also want more immigration, both low and high skilled, because immigrants may be willing to work for less than their American counterparts.

This editorial appeared in the Times on Saturday. What’s interesting about this is that we are just five days away from a Senate hearing on reauthorizing the Workforce Investment Act, which is the major piece of legislation that authorizes government spending on workforce training. I’ll be interested to see how some of my colleagues in the workforce development field respond to this.