Skills gap exists in the real world

Wisconsin Manufacturers & Commerce read with great interest the recent Milwaukee Biz Blog by History Professor Marc Levine from UW-Milwaukee. He claims, based on “major academic studies as well as data from the U.S., Wisconsin, and Milwaukee labor markets” that there is no evidence to support the skills gap thesis. We read the report, and waited to get to the part where the professor talked to manufacturers. Unfortunately, he did not.

WMC, on the other hand, actually does talk to the state’s employers. Half of our members are manufacturers and we spent last year in 54 communities, talking to more than 300 of them. True, they are not “leading economists” and they don’t spend their days reviewing labor market data. However they do employ people and every day are trying to find workers to make businesses more productive.

They are having a difficult time because the skills of the people in the pipeline don’t match the skills needed. And Professor Levine actually made this point without realizing it. He claims we have an “overeducated” workforce, not a skills shortage: “The college-educated share of employment in these occupations (retail, waiters, bartenders), in which the skills required have not changed over the years, has grown significantly since 1970, a revealing indicator that our central labor market challenge is not a skills deficit but a shortage of ‘good jobs.'”

Right information, wrong conclusion!

The problem is we are pushing students to get degrees in subjects that do not necessarily prepare them for jobs that exist in the market. We know we produce more history majors, political scientists and now, even lawyers, than we need. At the same time, today’s high school student does not even know what a CNC operator is or does, but we need more of them. As we also need machinists and welders. We would bet none of those retail workers, waiters or bartenders have educational degrees in these technical fields

The professor also thinks we don’t need welders, the data says so! Now, if you talk to employers at Caterpillar or Oshkosh Truck or OEM, or if you ask the folks at Nicolet Technical College who just added a new welding lab to meet demand, you might get a different answer. The professor also notes in the data that wages for welders have not risen, however we assume he understands that in an industry skewed toward longevity, when a 30-year experienced welder is replaced by someone who has been at the skill for five years, that individual will not start where her/his predecessor left off.

Finally, it is true that manufacturing is not one of the fastest growing industries like nursing, retail and food service. Through productivity gains, manufacturers are making more with fewer people. However, that does not mean demand for people is not high. The manufacturing sector employment is aging. Companies are trying to deal with the hundreds of years of experience that will be walking out the door in the next few years. There may not be thousands of new jobs, but there will be thousands of openings, and we don’t have the skill sets to fill in. Just this week, a manufacturing conference/CEO roundtable including leading companies like Joy Global, Badger Meter, Harley, Monarch, Strattec, Racine Metal Fab, and GenMet, ALL sited lack of qualified employees as their number one or number two business challenge. At the Focus on Manufacturing breakfast today, Generac noted they are struggling to fill 300 positions and Power Test, with 70 employees, has 12 openings they can’t fill.

With all due respect to the professor regarding the workforce skills gap, 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.

Jim Morgan is president of the Wisconsin Manufacturers & Commerce (WMC) Foundation.

Wisconsin Manufacturers & Commerce read with great interest the recent Milwaukee Biz Blog by History Professor Marc Levine from UW-Milwaukee. He claims, based on “major academic studies as well as data from the U.S., Wisconsin, and Milwaukee labor markets” that there is no evidence to support the skills gap thesis. We read the report, and waited to get to the part where the professor talked to manufacturers. Unfortunately, he did not.

WMC, on the other hand, actually does talk to the state’s employers. Half of our members are manufacturers and we spent last year in 54 communities, talking to more than 300 of them. True, they are not “leading economists” and they don’t spend their days reviewing labor market data. However they do employ people and every day are trying to find workers to make businesses more productive.

They are having a difficult time because the skills of the people in the pipeline don’t match the skills needed. And Professor Levine actually made this point without realizing it. He claims we have an “overeducated” workforce, not a skills shortage: “The college-educated share of employment in these occupations (retail, waiters, bartenders), in which the skills required have not changed over the years, has grown significantly since 1970, a revealing indicator that our central labor market challenge is not a skills deficit but a shortage of ‘good jobs.'”

Right information, wrong conclusion!

The problem is we are pushing students to get degrees in subjects that do not necessarily prepare them for jobs that exist in the market. We know we produce more history majors, political scientists and now, even lawyers, than we need. At the same time, today’s high school student does not even know what a CNC operator is or does, but we need more of them. As we also need machinists and welders. We would bet none of those retail workers, waiters or bartenders have educational degrees in these technical fields

The professor also thinks we don’t need welders, the data says so! Now, if you talk to employers at Caterpillar or Oshkosh Truck or OEM, or if you ask the folks at Nicolet Technical College who just added a new welding lab to meet demand, you might get a different answer. The professor also notes in the data that wages for welders have not risen, however we assume he understands that in an industry skewed toward longevity, when a 30-year experienced welder is replaced by someone who has been at the skill for five years, that individual will not start where her/his predecessor left off.

Finally, it is true that manufacturing is not one of the fastest growing industries like nursing, retail and food service. Through productivity gains, manufacturers are making more with fewer people. However, that does not mean demand for people is not high. The manufacturing sector employment is aging. Companies are trying to deal with the hundreds of years of experience that will be walking out the door in the next few years. There may not be thousands of new jobs, but there will be thousands of openings, and we don’t have the skill sets to fill in. Just this week, a manufacturing conference/CEO roundtable including leading companies like Joy Global, Badger Meter, Harley, Monarch, Strattec, Racine Metal Fab, and GenMet, ALL sited lack of qualified employees as their number one or number two business challenge. At the Focus on Manufacturing breakfast today, Generac noted they are struggling to fill 300 positions and Power Test, with 70 employees, has 12 openings they can’t fill.

With all due respect to the professor regarding the workforce skills gap, 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.

Jim Morgan is president of the Wisconsin Manufacturers & Commerce (WMC) Foundation.

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