Is the Skills Gap really a Wage Gap?

That’s the question raised by blogger Kevin Drum.  He cites a recent article quoting Eric Hahn a manager at General Plastics, a manufacturer in Washington state who can’t find applicants that can meet the basic math requirements for a recent job posting:

OK, now look at the chart on the right. [You can click on it to see the full size version.] It shows results from the NAEP [National Assessment of Educational Progress] math test—a national assessment that’s generally considered highly reliable—for 17-year-olds. And basically, it shows nothing. If naep_math_long_termyou take a look at the 25th and 50th percentiles, which is where most factory workers come from, scores have been pretty flat for the past two decades. If anything, they’re up slightly.

So how do we square this with Eric Hahn’s contention that General Plastics has had trouble over the past few years finding qualified workers?

His guess at the most likely answer:  “Jobs at General Plastics require higher skills than in the past, but they’re refusing to pay any more than they used to. So they’re not getting suitable applicants.”

If Drum is right that would also explain the productivity/wage-growth gap noted in research by the Chicago Fed.  Even with the charitable assumption that this gap is caused by global downward pressure on wages, how should manufacturers (and the society in general) respond?  His full post is worth a read.

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