Imaginary Gaps and Real Ones

Quite a lot is said about the “skills gap”, the difference between the people who are looking for jobs and the jobs that are on offer, but not enough is being said about the yawning chasm between the imaginary labor market and the real one. This post at Pew’s Stateline blog goes some way to remedying that:

LE SUEUR, Minn. — Customers can’t get enough of Cambria’s quartz countertops, and the million-square-foot production facility here is racing to keep up. Under bright lights and high ceilings, churning machinery fuses quartz crystals into heavy slabs and polishes them until they shine.

This facility is short 40 production workers. It took months to find all the workers for a new assembly line added earlier this year — even after Cambria boosted entry-level wages from $16.66 to $18 an hour. The labor shortage is costing the company some $3.8 million per month, said Marty Davis, the company’s president and CEO.

Employers across the country, from manufacturers in rural Minnesota to hospitals in New York City, are having trouble filling jobs. It now takes about 28 workdays to fill the average job vacancy, compared to about 24 days, on average, in 2007.

The declining unemployment rate has made it more difficult for employers to find workers, but it’s still tougher than it should be given the current jobless rate. Since the recession ended, the number of job openings has increased faster than the number of new hires.

Among the many excellent points made in the post are:

• Job openings are increasingly outstripping hires. That’s been true since the first of the year and it’s now quite noticeable.
• There is no such thing as a national job market. There are regional and local job markets. A policy targeted at filling an imaginary national job market (higher education) does very little for local job markets.
• If there were a skills deficit, wages would be rising. They aren’t.
• A lot of people don’t want to work in small towns for long hours at low pay. IMO there’s a component of real or perceived racism in that. YMMV.
• The labor force we have differs dramatically from the labor force we’ve had for the last half century.

The national solutions aren’t addressing any of those problems. We need to start searching for solutions to the problems we actually have.

There’s at least one thing I disagree with in the post:

Automation and downsizing have also reduced the number of hiring managers at firms, and hence the number of people who can push back on unrealistic job descriptions, according to Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School.

Hiring managers don’t “push back” for a simple reason. They’re afraid that if they do, they’ll be replaced by somebody who doesn’t push back. That’s a characteristic of a slack labor market.

One of the things that should be kept in mind: as with nearly all business problems 85% of the labor force/hiring problem is a management problem. We need more managers who are trying to build better companies and fewer who are hurrying to ready IPOs.