Friday, August 19, 2016

Illinois economics professor finds lack of skills gap in manufacturing

From a University of Illinois press release (reprinted in the Rock River Times): 
Three-quarters of U.S. manufacturing plants show no sign of hiring difficulties for open positions, says new research from Andrew Weaver, a professor of labor and employment relations at Illinois. 
“Not a week goes by without someone declaring that a huge skills gap exists in the U.S. workforce,” he said. “A lot of ink has been spilled on this topic, but it’s frequently without evidence. The popular sentiment encourages people to think that employers have high skill demands, but U.S. workers just aren’t up to snuff, and that’s why manufacturing work is being outsourced overseas.” 
However, the results show that U.S. manufacturers are generally able to hire the skilled workers they seek. 
“We estimate an upper bound of job vacancies due to a potential skills gap of 16 to 25 percent of manufacturing establishments – a finding that sharply contrasts with other surveys that have reported figures of more than 60-70 percent,” Weaver said.
This survey was done of 2700 randomly selected manufacturers, yielding 903 responses. The survey was done in 2012 and 2013. From the actual paper ("Skill Demands and Mismatch in U.S. Manufacturing"), an excerpt of the concluding paragraph:
Overall, the results qualify our view of skill mismatch. Three-quarters of U.S. manufacturing plants show no sign of hiring difficulties. We estimate an upper bound on potential skill gaps of 16 to 25% of manufacturing establishments. This finding contrasts sharply with other, nonrandom surveys that have reported figures in excess of 60 or 70% (Deloitte 2011). 
Among the minority of manufacturing establishments that do show potential signs of hiring distress, the relationship between skill demands and hiring problems is not simple or clear-cut. While higher-level math demands are predictive of hiring difficulties, higher-level computer demands are not. Extended reading skills are unexpectedly prominent as predictors of long-term vacancies. Many other skill demands, including those for soft skills and problem-solving/initiative skills, are not associated
with hiring difficulties. 
When we examine the mechanisms that might contribute to hiring difficulties, a mixed picture emerges. High-tech plants, often thought to be hampered by inadequate workforce skills, are not associated with significantly greater hiring difficulties. Beyond higher-level math and reading demands, the two largest and most consistently robust predictors of hiring difficulties are demand for unique skills and membership in an industry cluster. Both of these factors raise questions about the relationship between a manufacturing establishment and other regional actors, including other firms, educational institutions, and training providers. The positive relationship between unique skill demands and long-term vacancies indicates that a number of establishments are unwilling or unable to solve their skill challenges through internal training, even for skills that are highly specific to a particular plant. 
I'm looking forward to reading this paper more thoroughly; I'm also looking forward to the deafening silence on it from all the local business journals and the Manufacturing Institute as they continue to complain about a skills gap, and how local community colleges need to help them out with it. 

4 comments:

  1. Being equally as irked as you by the seemingly incongruous skills gap talk, this is very welcome. However, it's only one snapshot. I checked some stats in the UK manufacturing accounts for only around 15% of engineering jobs (engineering is one of the loudest voices in the skills gap debate over here). Still, very welcome.

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  2. American workers lack the skill to live on the wages that their PRC counterparts earn.

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  3. I wish I could find an article I saw some years ago: it was about the inability of an American factory owner to find anybody to hire.

    This businessman received about, IIRC, 1000 responses to his employment advertisement. He then made a first cut by discarding any applicant who did not have a high school diploma, as this showed inability to follow directions: he also discarded any applicant who had been to college, as they would likely seek better employment and leave.

    Following this, he presented the applicants with a 14-page application form and questionnaire, and discarded any form with typos or errors. From this remaining candidate pool, he chose those with the best answers for a trainee class. This involved 2 weeks of on the job training, paid at minimum wage.

    He then made offers to the top three performers of the trainee class. Of these, one applicant declined on the grounds that he had received a better job offer elsewhere. Another refused on the grounds that he was receiving more in unemployment than was being offered, and he hoped to do better before it expired. A third applicant never responded back.

    So in the end, this proved to him that there were no suitable American job candidates.

    I hope I remember it correctly: I would like to find this article again.

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    1. i agree that the situation Morris describes is the true source of the "skills gap" in this country. rather than a lack of qualified individuals, employers have such a wealth of applicants to choose from, that they may be as absurdly picky as the please.

      i would love to read that article.

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