Why Does the US have a manufacturing skills gap?

This is something we’ve discussed previouslymfg.  The Wall Street Journal has yet another piece lamenting the skills gap in manufacturing and our society’s inability to address it:

The Obama administration and governors from Michigan to North Carolina have a solution for some of the U.S. manufacturing sector’s woes: German-style apprenticeship programs.

But their success is proving to be unusually one-sided, mostly drawing firms based in Germany and other non-U.S. countries. In North Carolina, “Apprenticeship 2000,” a program combining classroom work and on-the-job training, has drawn numerous German companies but so far only two U.S. firms, Ameritech Die & Mold Inc. and Timken Co. . . .

. . . . Most U.S. workers avoid [vocational training and apprenticeships] for a number of reasons, experts say. Parents and educators tend to generally encourage young Americans to attend college. While businesses have an incentive to hire qualified workers, many resist investing in people who might leave. And the community colleges that are often at the center of apprenticeship programs tend to focus on local interests.

But that may not be the whole story.  Over at the Center for Economic & Policy Research, Dean Baker has a different take:

According to the piece, employers in manufacturing can’t hire workers with the right skills. If employers can’t get enough workers then we would expect to see wages rising in manufacturing.

They aren’t. Over the last year the average hourly wage rose by just 2.1 percent, only a little higher than the inflation rate and slightly less than the average for all workers. This follows several years where wages in manufacturing rose less than the economy-wide average.

There are workers who have the skills employers need. They work for their competitors. If an employer wants to hire people she can get them away from competitors by offering a higher wage. It seems that employers in the manufacturing sector may need this simple lesson in market economic to solve their skills shortage problem. [via Kevin Drum)

 Our experience in workforce development suggest that Baker may be on to something.  The workforce development system in most places does a good job responding to employers’ needs. Indeed, one of the real strengths in the system is the ability of community colleges in particular to, as the WSJ puts it, “focus on local interests.”  It may be that manufacturers are  facing international competition which places downward pressure on labor costs, so they can’t respond appropriately to labor market conditions (i.e., raise wages to attract the workers they need).  But if so, that is a different problem than a simple shortage of skilled workers.

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