Skill Gap in America: Does it Exist?

http://spectrum.ieee.org/podcast/at-work/tech-careers/why-bad-jobsor-no-jobshappen-to-good-workers/?utm_source=techalert&utm_medium=email&utm_campaign=062112

I found this interesting interview with an author of a book that disagrees that there is a skills gap in America. He argues that employers are setting impossible standards with wages that are too low to hire individuals and that the unemployment problem lies with employers.

Basically, he is saying that American companies are trying to hire everyone with prior experience, yet unwilling to train anybody fresh. So what you are left with is a country where there are plenty of skilled people but no one willing to hire/train them to give them any experience.

Additionally, even with skilled people, he argues that if companies can't find anybody at the wage they are looking at, they should increase the wage they offer. He likens this to buying diamonds. If you don't pay enough for diamonds you wouldn't argue there is a "diamond shortage". You're not paying enough.

This is an interesting insight for me into the American college-graduate problem. For me, almost all universities in Canada have some sort of co-op (internship) program, even if it's a crappy one and the most famous university for it is Waterloo which requires it as a component to graduate from engineering. Therefore all graduates from Waterloo come out with 2-years of real industry experience and usually get hired immediately.

Also, the Canadian government gives tax breaks to companies that offer internships, so that may also be a factor assisting this. Furthermore, companies offer reduced wages for co-ops/interns but usually have them do exactly the same work as full-time employees.

This is most certainly a thing. Crossposting from something I said in Yack Fest...

Many second-tier institutions that specialize in engineering in the US have a coop prereq as well, and they do tend to place "above prestige" into the workforce versus those that do not have the same mandate. The heavy hitters (MIT, Cal-tech, UIUC, etc.) have fairly extensive co-op programs available as well, although one could argue they aren't particularly needed. TBH, it is still unusual to find an unemployed engineer in the under 30 age range (2% unemployment for transitioning undergrads in the 2011 survey I think), and it is exceedingly difficult to find an engineer with a Master's Degree in the same age range who is unemployed.

Two minor criticisms of Cappelli's responses: In-house training is less rare than he gives it credit for, and AFAIK the nursing shortage is only "no more" in the short term, simply because 1. demand is going to rise sharply in the next decade or two to accommodate the boomers, and 2. nearly half of the nurses in the work force are likely to reach retirement age in the same period.

One other point — having an undergrad and few years of co-op is likely to land you up to an intermediate-level position at many companies, but it will almost never land you a Senior-level position — and those are the ones with off-the-chart demand at the moment.

edited 21st Jun '12 10:49:23 PM by ForlornDreamer

^ I would agree with most of the assessment but I think the skill gap "problem" in question hits harder when you go into less academically demanding vocations.

For Canada, our nursing shortage is purely due to a funding shortage in healthcare and has nothing to do with available skill. Same goes for our skilled labour shortages. The unions slow down entry but at the same time, unions guarantee that junior members get jobs. Since most jobs don't have unions that do that you have positions in the service industry requiring experience to the point of ridiculousness.

I've seen American small businesses talk about a "competitive" wage of 7.50 an hour (which is so low it's illegal in all of Canada even for liquor servers) and talk about how nobody applies to their jobs. Which is crap. Lots of people apply except they require you to have all this experience and so on to do a salesman job at a local hardware store. They're paying 7.50 an hour, how many years experience do you seriously want?

And the thing is that with the tech industry, especially like Silicon Valley and Seattle/Redmond area, they're very crazy about requirements. So they lock out American grads and take in a very high number of international candidates. Yet again, the H-1B program is back to maxing out in short time frames. However, the top companies have a significant number of internship positions whereas ironically the lower level and less reputable corporations have less internship positions (even though they should want workers at a cheaper price). Not sure if that correlation is anything but incidental.

One of the things around here is that the college's engineering school had an excellent internship program — they just had you present your senior project at the engineering expo, and you were almost sure to get offers. Most of the companies are happy to have undergrad interns and I imagine they get tax breaks for it.

The thing is, they're not always so keen on actually hiring you after you graduate. If you really kick ass during the internship they'll offer for you to stay, but if you're not done with your degree yet you're screwed, and if you graduate anytime that isn't spring term when they're looking for graduating interns for the summer you're really screwed.

edited 22nd Jun '12 1:45:23 AM by Pykrete

Well your job offers are definitely skewed toward the last position you did, and you want to aim toward where you actually want to be by your last internship but the reason why Waterloo, above the other schools in Canada, is well-regarded for its co-operative education engineering programmes is because you get 6 different job chances (and you must complete 5 of them or fail). Every "chance" is a 4-month period, for a total of 2 years, so you can spend 2 years at up to 6 different companies, thus creating a very large business network for you (assuming you don't suck).

Most other universities in Canada offer between 1-1.5 years of co-op but at best can only be split between two companies. It hampers your ability to "test the waters" and build a network of managers who like you.

Canadian companies who've had a good co-op are fully willing to hire that person 4-8 months down the road if they have openings. It's a lot better than going into the general market to hire so they usually only do that to grab experienced people.

The only issue in Canada is that high-end jobs don't pay well (usually are all American corporations who low-ball Canadian salaries) and so there tends to be some loss of top talent to USA every year (the Canadian version of brain drain). That ends up being strange in that the very top paying jobs (of the middle class sort) go to a lot of foreigners.

OP, if agreement was scotch the drinks would be on me.

The level of fluffing entitlement that today's employers have about the labor market it appalling. It's not so bad here where the unions still have some teeth but US businesses are running themselves into the ground with their unwillness to invest in human capital.

edited 22nd Jun '12 3:48:56 PM by joeyjojo

Partly it's "At-Will Employment" turning around and biting employers; you set it up so you can fire anyone for any reason, even bullshit or unfair ones, at any time, and the law requires reciprocity — that means people can quit at any time, too. Including that person you just trained to do something. So companies react, not by lobbying to allow contracts with more stability guaranteed for both sides, but by refusing to train anyone.

Another part of it is that companies have so cut their workforces to the bone to keep corporate profits sky-high even during a downturn — rather than retaining that human capital to do better once conditions ease — that they have nobody left to mentor new employees and help them fit into their jobs.

You know how people get jobs in modern America? They lie.

Morven, I think it's a trifle unfair to blame a natural economic transition on capitalist pigdogs. :) Workers have always had the right to pack up and quit, and what's happened is that the labor force has gotten more and more mobile, so employees are less tied to their jobs.

You're right about the effect, though; companies have much less incentive to develop human capital than they used to. In the long run, what we'll see in the developed world (this is a trend already in progress) is that long-term salaried employment will be more-or-less limited to the public sector, and contract work will become the standard. This will continue to increase the skill gap in America, and exacerbate its effects, unless measures are taken to increase access to and quality of education.

The workforce hasnt gotten anywhere near more mobile.

Its the exact opposite. Most people couldnt afford to move even while employed, let alone when not employed.

Combine that with insane employer standards regardless of how good you were trained in school, and at-will employment, and you have a mess.

edited 23rd Jun '12 8:39:54 AM by Midgetsnowman

Workforce mobility has most definitely decreased since the 1980s, and wages have been entirely stagnant in America since the 80s, while for Canada, stagnant since the 90s. Nearly 100% of the GDP growth has only gone to the top 10%, and primarily the top 1%. For instance, CEO salaries in Canada during the early 90s averaged below a million dollars. Today they're averaging above 10 million. They went up double digit percentage points straight through the sub-prime recession even while middle class and below wages dropped in response to a weakened job market.

As for job stability, this is (my own opinion) blamed on the 1990s recession. Employers responded to the recession with mass lay offs. So what did workers do? They can't do shit, people who had been loyal to companies for decades found their asses on the curb with no pension, no RRSP backing and no pay. Employers by and large betrayed all their workers.

Look at the mentality of a worker back before 1990. You worked for a company, they took care of you. They offered you a pension, perhaps helped with education expenses for your kids and when times were tough, everyone took a hit (managers and executives included, you can see during recessions there, the top 10% in Canada took a major hit in salaries). You stayed with them and they stayed with you.

Nowadays? Times tough? Find a new job. Pay isn't high enough at your current workplace? You will NEVER get a raise. Get a new job. Your signing bonuses are all done with? Get another job, screw that corp, they're not going to give you new bonuses. Because if you don't act like a total sociopathic douchebag to your company, you'll get screwed by them.

So yes, the problem is with capitalist pigdogs. We've created a greedy sociopathic society and then we bitch about it and say that's not the problem. That is exactly the problem.

edited 23rd Jun '12 9:09:25 AM by breadloaf

The other problem is that corporations and crab bucket phenomenons have convinced a lot of workers that Benefits and insurance and other stuff like that is "being greedy" on the worker's part.

I blame HR. In spades.

If more companies invested in their people and made them happy and competent, they would flourish by having excellent productivity and a low retraining rate because people would stay at their jobs longer.

Also, too many chiefs and not enough indians. We need to cut jobs in half that have the words "Lead" "Head" "Senior" or "Analyst" in them. Most of these jobs are useless as shit, or they are "Indian" level jobs with a pay bump 90 percent of the time during the workday.

For instance, I just applied for a job that I was a shoe-in for, as a coordinator for a veterans service organization funded by UCLA that is located at the Navy base a few blocks from me. I've got a hefty bit of office experience under my belt from being a desk sergeant, and out of all the things on the list of responsibilities for the position, I could say confidentially, with absolutely no exaggeration, that I knew each responsibility intimately and could do the job.

What happened? I filled out the entire application, and when I got to the end I had to check "Yes" or "No" to if I had a bachelors degree. It then promptly kicked my application out of the pool and apologized to me for not having the minimum qualifications, despite having more experience than any of their bachelors degree holding applicants. You don't need a fucking bachelors degree to know how to direct phones, work a fax/copy/scanner machine, write departmental memorandums, or manage a digital file system. They don't teach that shit off the cuff in college. I know how to do all that stuff, and I'm intimately familiar with all the programs that they support by virtue of being a veteran who has used some of them and apparently not having a bachelors degree means they wouldn't even read my application.

Combine that with being a guardsman in the first place, which is essentially having leprosy as far as an employer is concerned, and yeah, I'm having a tough fucking time.

This makes me want to pursue a career in HR, so that I can get to the bottom of this shit and try to sort it out in whatever way I can, maybe there'd be a company out there that would thank me for it someday.

edited 23rd Jun '12 10:04:15 AM by Barkey

The very title "Human Resources" is a problem, in my mind.

That is bizarre. And stupid. A lot of the times, I think the purpose of a BA is to keep people out of the workforce longer and put them in debt.

Education in America is a business, a racket, and that's where many of our problems come from.

It's going to collapse sooner or later, mark my words.

@Barkey: Yeah, I've been finding applications recently asking if I had ever defaulted on a student loan. Ugh.

That's an odd question, never seen anything like that before.

I've only seen it on a handful of them, but I hadn't seen it before this year either. And it's always a Y/N question, with no room for me to put down that I defaulted because I was effing unemployed for a year.

well, obviously, if you cant be trusted to pay back 40,000 dollars in loans with those 5 years of experience in a job you just got a degree in, how can they trust you as a hiree?

Morven nailed it in one.

Yes. And what's even more irritating about that is that when I was interning, there was almost no difference between the lead engineer and the ones working with him. I mean, he spent about fifteen minutes every few days splitting up our tasks so we wouldn't step on each other's toes too badly and putting them into our thing, but other than that he was doing the exact same job as us. He wasn't even paid that much more, and that was because he'd been working there for like 8 years.

Which means hiring 4-5 "lead engineers" is really just doublespeak for "we want the people that ditched Activision or got laid off by EA."

edited 23rd Jun '12 12:57:31 PM by Pykrete

Exactly. And people who get lead or senior positions seem to never have actual leadership experience, even if they are good at their job.

You can take an engineer with tons of experience, give him a lead position, and he'll fuck everything up, because he's a damn good indian but a horrible chief.

edited 23rd Jun '12 2:59:50 PM by Barkey

Well see, a lot of times I talk about certain requirements for a lot of jobs. Most of them "require" education such as, at least a bachelors degree in a particular field. I've never actually encountered it being a "hard" requirement until talking to Americans. It's something I've noticed a lot.

I say "this job needs a university degree, are you sure you want to apply without one?" And then I get a two-day rant about how I'm evil and elitist about education. Hey, I hire people WITHOUT a university education if they meet the requirements for a job. Job descriptions always list everything in the world but companies can hire you even without them. It's not a Y/N proposition to each of those points.

But apparently, in America it is. No degree? Immediately out of the pool.

I don't understand that, how are you supposed to hire top candidates if you cut the hiring pool like that?

@Barkey: The trick is to find someone that you're currently employing, who shows leadership, and then promote him. Employers seem to avoid doing that, for some reason, and instead either hire outside the company for leadership roles, or just promote the person who's been there the longest.

@Breadloaf: The assumption here is that everyone can go to college, so the ones that didn't go, or didn't finish are lazy/stupid/whatever and therefore not the best employees.