Friday, October 9, 2015

Dayton manufacturer blames government for "skills gap", rather than low wages, news at 11

It was Manufacturing Day on October 2, which means a spate of planted stories about America's "skills gap", including Commerce Secretary Penny Pritzker and Senator Franken from Minnesota bemoaning the state of America's workforce. But this story from Dayton, Ohio takes the cake: 
Machines are sitting idle at JBM Envelope Co. in Lebanon because the manufacturer can't find qualified workers to fill the job openings available. However, the likelihood of the company finding enough qualified people to hire is dim unless, top leaders are realizing, they take the matter into their own hands, said Chief Operating Officer Dan Puthoff. 
...About 140 employees work at the Warren County manufacturer today on Henkle Drive, but there are more than 10 job openings, including some positions that have sat empty for months, Puthoff said.  
Puthoff admitted the business was waiting for a development agency or educational institution to take action on the workforce issues. Now he’s realizing, his company and others like JBM can’t wait anymore. 
“I think we need to fix this problem for ourselves,” he said. 
“If we could market better to local high schools and have them at least get a glimpse of what is possible for them, that might go a long way to fixing the problem at least at JBM,” he said. “I think it’s such a monumental task that it really needs to be done at the grassroots level by companies like ourselves.”
And, typical to stories of this particular wretched genre, the wage number comes at the very bottom:
A manufacturing job at JBM offers benefits, a 40-hour work week and entry-level pay starting at $10.50 to $11 an hour plus more for second shift, Puthoff said. 
Clearly, a starting wage of $10.50/hr has nothing to do with their unfilled job openings. Of course, JBM Envelope needs more help from taxpayers and the government to solve their workforce problems. Good gravy. 

22 comments:

  1. F*&K that. You can get more working at Costco or Trader Joe's.

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  2. Pritzker: "...only 37 percent of parents encourage their kids to pursue manufacturing careers."

    And here's your reason why, Madame Secretary.

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  3. "... waiting for a development agency or educational institution to take action on the workforce issues." I think this says it all. I am simply baffled that so many employers think that finding high-quality employees (and getting them to stay), is not their problem.

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  4. According to the CNBC story you link: "An entry-level manufacturing engineer can expect to earn $60,000, and the average manufacturing worker earns over $77,000 annually, about $15,000 more than the average worker across all sectors."

    How does $10.50 and hour get you to $60k a year? 110-hour weeks, of course.

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    1. One presumes that the $10.50/hr is for entry-level line workers, and not a new college graduate w/a degree in mechanical engineering, etc.

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  5. Anecdotal evidence is the best sort of evidence, amirite?

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  6. And really, what kind of high-end STEM skills is this company hoping to be taught at a college or graduate program? How to work an envelope-making machine.

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  7. It sounds like they're interested in hiring high-school kids in co-op positions to do their grunt work. Many of my students do have good co-op employment experiences - but the point of co-op is that it should lead to better things. Apprentice electrician or plumber is obviously a good place for a kid to start a career in the trades. CNA work might prepare a kid to go on to become a LPN, RN, PA, or MD. Prep cook can lead to head chef, eventually. I'm not sure that running an envelope-making machine is necessarily preparation for anything besides running an envelope-making machine, though.

    But then again, this is ChemJobber after all: how often does being a lab rat lead to a rewarding position in R&D or academia? Less often than it used to, I suspect. "You're certainly well trained! Have you looked on the Internet? There's lots of job postings there!"

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  8. Fix it yourselves? Pull yourselves up by your own bootstraps? Ludicrous. Just ask for some new form of work visa.

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  9. From a slightly different perspective, most High Schools don't teach "wrench turning" in their curriculum, thus denying young lads and lasses the opportunity to learn a trade. It's unlikely that the company needs degreed mechanical engineers but do need machine operators and machine repairmen (or for the PC-oriented, machine repairpersons). The skills necessary for these careers are learned both with wrenches, grease and calculators, as opposed to calculators alone.

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  10. $11 there has the spending power of over $15 here (source: CNN Money). What's more, since the company pays local taxes, is it too much to ask for the local school system to consider including skills that the company needs in the vo-tech curriculum? Finally, if this is the same Dan Puthoff I know from way back, I'm sure that when he says he'll try to fix the problem himself, you can expect exactly that. Your, and JBM's, taxes will continue to be spent on much more necessary things. I'll leave the list of qualifying (and less than qualifying) programs as an exercise for the reader.

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    1. "What's more, since the company pays local taxes, is it too much to ask for the local school system to consider subsidizing JBM's bottom line?"

      there, fixed that for you.

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    2. Now that I have the snark out of my system, I do want to address your substantive point, which is that the schools should consider including skills that JBM needs. I'm ~sympathetic to that point, but in that case, I'd expect just a tiny bit more gratitude and a little bit less entitlement out of Mr. Puthoff. That he was waiting for the schools/economic development agencies to work on his workforce issues that is just stunning - is this a problem for Mr. Puthoff or not?

      "I'm hungry enough that I'm waiting for someone to buy my groceries, but not hungry enough to pay for them myself." Sorry, not sympathetic.

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    3. ...and yes, I agree that $11/hr does better in Dayton than on the coasts (and is higher than the $8.10/hr minimum wage in Ohio.)

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    4. Thank you ever so much for the correction, CJ. What should public school curricula include, then? Only those subjects that are of no value to employers seeking to hire people? Only those subjects that in no way helps a non-college-bound student find work? Only those subjects that qualify the students to borrow piles of subsidized money to spend at a subsidized public university? Then what? Four years of learning a great deal about a subject that gets the student a better job -- maybe -- with a massive multinational pharma? Well, if that job isn't available, there's always grad school. The nation is peppered with subsidized public grad schools. That career avenue always works out. Right?

      The purpose of education is to provide the student with the knowledge and skills required to sustain themselves. In a modern division-of-labor economy, that means sellable job skills -- one must, at some point, learn how to create something that someone else wants to buy. In many cases, this activity is performed through an employer. Thus, all education subsidizes all employers to a greater or lesser extent. This can only be avoided by insisting every employer open their own specialized school, or some other form of totally privatized schooling, and abolishing public schools (except for the teaching of subjects thoroughly useless to everyone). After all, if our public school teaches math, that gives accounting firms a leg up over newspapers, or if our public school teaches logic, it creates an unfair disadvantage for bloggers. And of course, with totally private education, only those who can afford to pay can go.

      That's not our system, however. So since we have public schools, what is the harm in listening to the needs of employers that are paying their share of the bill? Who gets hurt when a dozen high school students, who would otherwise languish uselessly on public assistance, get to take an elective vo-tech course that qualifies them for something useful that pays?

      What's the beef against shop class?

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    5. I got no beef against shop class, dude.

      I got a beef against a guy who says "I got tired of waiting around for my local schools to fix my problem, so I've decided to fix it myself."

      "Puthoff admitted the business was waiting for a development agency or educational institution to take action on the workforce issues. Now he’s realizing, his company and others like JBM can’t wait anymore."

      Hey, if JBM Envelope wants to put up some money (or ship one of their envelope-manufacturing machines to a shop class in the local school), I have no problem with that. But to dog your local school system for not getting the lead out fast enough? That's sort of weird, don't you think?

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    6. "...what is the harm in listening to the needs of employers that are paying their share of the bill?"

      Nothing, and it's already being implemented in the form of the Common Core curriculum. However, when specific employers have too much say, there's a real possibility of teaching a narrow skillset that will hinder students' future job mobility.

      And which employers get their specific needs met? The loudest? The biggest? The largest campaign contributors? Who decides?

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  11. Granted, in his shoes, I'd have placed a few calls to the guidance counselor before airing my frustration in the local paper.

    Putting an envelope making machine in the school is probably rather too specific for a basic skills shop curriculum. In that part of Ohio, a lot of factories and farms did have agreements with the local schools (that may indeed have involved money changing hands -- I never knew at the time) wherein starting their junior year, students would go to their classes half the day and go to work in their factory or farm, for pay, the other half. Many students graduated directly into full-time jobs this way. Does that system still exist? Having been away a few decades, I'd have to go back and ask around.

    Also, I looked up Dan Puthoff. Not the same guy I knew. I sympathize all the same.

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    1. Honestly, it's a tough spot and I wish I had an easy answer for him/them. My solution (raising wages) is a heck of a lot easier to say than to implement. I like your idea of talking to guidance counselors; it's a much better community-based solution. Here's hoping Mr. Puthoff takes your advice.

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    2. Not everyone is going to college, but schools are supposed to teach a common set of skills that people will need in society, and basic knowledge that needs to be held in common so that everyone can participate meaningfully in society. I'm not sure that specific job skills fit there - they used to be taught either by the employers who needed them or by colleges or vocational schools, and that distribution would seem to make more sense. Considering the likelihood of employers (and their jobs) staying in one place for long (low), it doesn't make a lot of sense for schools to teach skills for particular jobs because those skills will not be useful or helpful for long, and cost money and time that could be better spent learning other things that might be useful into adulthood.

      The expectation that schools can teach people lots of skills for now while giving them the ability to be completely flexible (because the job they train for probably won't be there when they're older, for a variety of reasons) makes no sense - there's only so much time for students and so much money for schools. It makes more sense for them to teach a general foundation so people can do what needs to be done at a given time rather than to teach them particular skills that will help them for a short time but will hurt them when they get older and their jobs go away and they can't easily retrain.

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  12. I have never visited this blog until I saw a reference to it and the recent article about the skills gap shared by a friend with whom I’m connected on LinkedIn.

    It’s important to share some facts about the situation. The $10.50 - $11.00/hour wages we offer are for unskilled/entry level positions. While some retailers may offer a higher starting wage, an important distinction is that we have full time employment with benefits unlike some retailers. For this particular role, we provide 3-4 weeks of training upon hire. Individuals hired into this role are placed on a career path which provides them the opportunity to increase their wage based on developing the capability to run a wider range of machines and potentially becoming a Lead. The top out for this role is $18/hour. While we are having issues filling these entry level/no previous skill required positions, the longer term concern is with our mechanical resources.

    With the mechanical resources, as many previous writers have indicated, there used to be a focus placed on the trades to include those mechanical in nature. There is still a focus on this at the collegiate level (e.g. Mechanical Engineering), but based on what we can tell, not as much at the high school level. For mechanical resources (no college degree), depending upon skill/experience, our pay range is $13/hour up to $26/hour.

    All of our wage ranges are reviewed/reset by bench-marking against other organizations in the Greater Cincinnati area, as well as in our industry on a nationwide basis. While we could always do a better job of getting more accurate market information on wages, we believe we are in the ball park. Some individuals offer the advice to simply increase wages; however, as a single component of a response it does nothing to address the core issues around perception of manufacturing or basic skills development.

    In my opinion, our fundamental challenge (i.e. at JBM) is to do a better job of educating students on the career potential that exists in manufacturing which does not require a college degree. Mike Rowe (from TV’s “Dirty Jobs”) has taken the lead on this very point. If you aren’t familiar with his work, it’s worth a read: http://profoundlydisconnected.com/. It is great that so many options are available for individuals to obtain a college degree if they want, but for many the perception has been formed that going to college is the ONLY way to get a “good job”. Again, our challenge is to try to show students that other options are still available in this world and to provide them opportunities to learn/develop the skills that JBM (and other similar organizations) require.

    In the past few years, JBM has worked hard to improve the experience of our team members. We have enriched our benefits, started a LEAN journey focused on engaging all team members, and abandoned the historically contentious performance rating system in favor of a team member centric coaching system. We continue to look for ways to improve the environment here that both attracts and retains team members. The point I was trying to make in the article is that despite all of these initiatives, we are still having an issue with finding team members and the conclusion we have reached is that we need to go further upstream (i.e. to the schools).

    To be clear, this is our issue to fix and in the coming months we will be organizing our approach. I suppose it’s easy from the outside to say we should have been doing more and sooner. Regardless, we are committed to taking a different approach now. Fortunately, the article has generated a productive response from several organizations which will be included in our planning efforts.

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  13. Given the pay range one would be better off on a welfare. Blame your Congress critters for this.

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