The Skills-Mismatch Conundrum – employees won’t play if employers won’t pay…

During the recent presidential election we heard a repetitive drone of anxiety and hand-wringing about the “skills mismatch” phenomena.  Its this strange lack of interest in STEM careers (science, technology, engineering and math) that seems to have corporate CEOs, academics, and public officials all baffled.  Why – oh why – in a time of high unemployment can we not entice our young people into these fields of study that are vital for our standing in the 21st century?  Its all so strange….

The pundits, who know about as much about STEM careers as the average politician, start preaching platitudes.  Obviously, Americans just want to take the “easy path”.  They don’t want to “work hard” or have to “know stuff”.  That’s it.  Americans are spoiled,  fat, lazy slobs who don’t want to scramble so much as one brain cell in the process of their working day.  Of course the same could be said for any pundit that comes up with such an anemic knee-jerk response to a serious problem….but I digress.

The solutions offered up are the same warmed over answers that we have all heard before.  If we can’t obtain the talent internally – we need to import it from abroad.  What an idea!   There are thousands of eager Chinese and Indians who appreciate this great “opportunity” that they are being offered.  They can come over on an H1-B visa  and viola!  We have instant STEM employees eager to learn and be exploited….er….remunerated for their hard work.  We must be to bring in more vital talent from abroad.  Simple enough.

The trouble is that its a canard.  The difficulty is that these jobs simply don’t pay.  Inviting even more foreign workers into our country on H1-B visas  who are willing to work for peanuts only exacerbates the problem.

The Math Doesn’t Work… 

The free market works on the basis of supply and demand.  If the supply of workers is high, the demand is low. Employers hold the upper hand and wages are suppressed. The opposite is true if the supply of workers is low. Soooo, if there really is a skills-mismatch one would think that salaries for people with these special skills – say a Ph.D. in molecular biology – would be high.  But that’s not the case. Many people in programing, engineering, math and science are having a hard time finding work and when they do, the salaries don’t even pay the bills.   I know people with doctorates who struggled to find a “job” that pays $40k a year in NYC.  Yet, the powers that be keep moaning about a “shortage”.  If there were a true shortage, these salaries would be more than double what they are.

Some answers from Mr. Isbister….CEO…

And they are not reassuring….Adam Davidson of the The New York Times finally wrote a cogent piece on the subject on Nov. 20.  Skills Don’t Pay the Bills.  I missed the original piece but it was followed up by commentary by Paul Krugman.  The article was about high-skilled manufacturing jobs, but the same issues apply to career tracks that require many years of post-graduate training.

Here is the story in a nutshell. Mr. Isbister, the CEO of GenMet told Davidson that he would “hire as many skilled workers who would show up at his door”…well ….almost.  Actually, out of 1051 applications he claims to have only found 25 qualified applicants and later had to fire 15 of the 25…10 permanent hires after 1051 applications hardly rings alarm bells about a supposed shortage of workers.  Here’s the kicker.  The pay for this skilled labor is $10/hour!  An associates degree might get you $15/hour and that could rise to $18/hour after “several years”.

It gets even better…Mr. Isbister recruits at high schools. When students express an interest in manufacturing he runs up against the wall of nervous parents who quite logically ask if Mr. Isbister if he is going to KEEP these jobs in the USA.  To that query, he admits that many of these jobs will eventually be off-shored.

Now let me get this straight…These executives expect the employee to pony up thousands of $$$ to become educated for a $10/hour job that MIGHT earn them an whopping $18/hour after “several years”. Meanwhile there is every chance that many of these jobs will cease to exist in US in the foreseeable future.  Well, who wouldn’t jump at an opportunity like that?

Excuse me, but where is the reality check here? As the author pointed out a manager at McDonalds gets $14/hour and that does not require a degree.

The bottom line is that there is no skills-mismatch, at least not yet….

Self-Fulfilling Prophecy…

Here is something for the Isbister’s of the world to wrap their minds around. People are not stupid.  They are not chumps and most of us are fed up with lies and misleading information about “golden opportunities” that are only a certificate and a degree away.  If you don’t want to PAY, people are not going to PLAY.  And this will eventually lead to a real skills gap when there are no more people in the workforce with the appropriate skills set.   But this gap is a monster of industry’s own creation.  They have no one to blame but themselves and their own rapacious greed.

© 2012 – RMGHicks – – All rights reserved.


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