Wednesday, March 26, 2014

These aren’t skill problems, they are human problems.

Interesting material in The Great Skills Gap Myth by Aaron M. Renn.

The argument is that there is a skills gap that explains why employers claim that they can't find enough skilled workers while at the same time there is historically lower workforce participation.
Is there a skill gap? In select cases I’m sure there’s a mismatch in skill, but for the most part I don’t think so. I believe the purported inability of firms to find qualified workers is due largely to three factors: employer behaviors, limited geographic scope, and unemployability.
Within Employer behaviors, Renn identifies four items:
1. Insufficient pay. If you can’t find qualified workers, that’s a powerful market signal that your salary on offer is too low. ...
2. Extremely picky hiring practices enforced by computer screening. If you’ve looked at any job postings lately, you’ll note the laundry list of skills and experience required. ...
3. Unwillingess to invest in training. In line with the above, companies no longer want to spend time and money training people like they used to. ...
4. Aesthetic hiring. This one I think is specific to select industries, but in some fields if you don’t have the right “look”, you’re going to find it difficult. ...
Renn doesn't reference it but there is a comparable list of Employee behaviors that are problematic, principally salary flexibility. Specifically, there are a ton of high human capital people out there above age 40 who have been displaced because of industry reconfiguration. These range from machinists and carpenters to executives. They have two strategies when displaced - 1) hold out till the market rebounds and they can find something again or 2) switch to a new career track and adjust salary expectations commiserate with newcomers. Both are risky and unsatisfactory and there is a documented preference to pursue the first strategy over the second.
Renn does address a different aspect of human capital.
Unemployability

A third problem is that a significant number of adults in this country are simply unemployable. If you’re a high school dropout, a drug user, etc. you are going to find it tough slogging to find work anywhere, regardless of skills required.

Watching the Chicagoland documentary and seeing what kids in these inner city neighborhoods face, a lack of machine tool or coding skills is far from the problem. Similar problems are now hitting rural and working class white communities where the economic tide has receded. Heroin, meth, etc. were things that just didn’t exist in my rural hometown growing up – but they sure do now.

These aren’t skill problems, they are human problems. And the answer isn’t simply job training. These problems are much, most more complex and they are incredibly difficult to solve. They need to be tackled by very different means than a job skills problem.
I think the basic problem we have here is that we are using the wrong language. We don't have a skills gap, we have a productivity gap. Only by focusing on individual efforts to improve individual productivity can you begin to square the circle.

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