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    Unskilled Workers

    By Michael Maiello on Sun, 11/18/2012 - 11:11am | Politics

    Today my favorite Op-Ed writer of them all, Thomas Friedman, tackles the skills of America's workers.  Based on the testimony of Traci Tapani, who inherited a small sheet metal company in Wyoming, Friedman has concluded that America's workers don't have the skills for what modern work requires.

    Tapani's won a government contract to build vehicle armor for the military, which is some pretty exacting work and, apparently, not the kind of thing that just any welder can do, even after years of practice.  Instead, she needs people with skills in mathematics and metallurgy and it helps if they have some fancy certifications, as well.  Okay.  This all seems reasonable to me.

    Tapani says that these people don't exist, so she had to train them.  Okay.  Cost of doing business, Traci.  Sometimes if you want other people to do things, you have to show them how, first.  But, Tapani doesn't seem to be complaining about that.  Her decision to find one person with the skills and then turn them into a mentor for others is a good model for other businesses to follow.

    I just wonder, though, if there aren't more people out there with the skills Tapani needs than she realizes.  You see, she describes the job as one that pays $20 an hour plus health insurance.  That's not nothing.  But, if it's a salaried position as opposed to one where hours fluctuate, that's only $41,000 a year -- $9,000 below the median household income in the U.S.

    I don't mean to be unsympathetic to Tapani, who seems to have smartly dealt with the problem but let's be clear here -- she needs workers with extraordinary skills but she's not offering anything like extraordinary compensation.

    She wants a good deal and, it seems she's getting one.  She is able to pay below median wage for complex labor.  This will not always be available to all employers.  It's definitely not available to public company boards seeking to hire a chief executive.  The first step in those negotiations, by the way, is that the candidate's representatives look at the average pay packages and then they use the average as a floor.  Why?  Because every CEO candidate is above average in ability, of course.  And what board would hire an average or below average CEO when so many finer candidates are clearly available?  But this also happened to the Hostess bakers.  Hostess said it wanted to pay its bakers less.  Its bakers said no.  Hostess management has chosen to liquidate rather than negotiate. There are plenty of qualified people to make Hostess snack cakes.  Oddly enough, they want to be paid for that service.

    It's probably somewhat true that America has a skills problem.  That's to be expected given changes in technology and markets.  But, I also think America has a compensation problem.  Much of the gains made by American industry have gone to shareholders and management.  That's not in dispute.  At a certain point, people say, "I don't want to spend my time doing that if that's all they're paying."  When you see stories like this, about employers who can't find "qualified" people, you have to ask, "at what price?"

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    So my husband is a Metallurgical Engineer, he makes far more than $20.00 per hour. Of course in Wyoming you could live fairly well on $41,000 a year I guess, but I've spend a winter in Wyoming and other than Jackson Hole's skiing, it sucked!

    Does America have a skills problem, well the answer is yes.  We've done a lousy job in preparing our population for the many technical jobs that are widely available.

    I recently went back to work after taking four years off, four years I needed off. I'd saved all the money I needed to take those four years off too. I do specialized data migrations and individualized CRMS programming for mostly non-profit organizations.   I was ready to work again after four years of bike riding and vacation bliss. When I was ready to go back to work it took me less than one week to get a job, I applied for the position which was advertised on craiglist on a Sunday, was called on Tuesday, was interviewed on  Wednesday, went to Montana on Thursday and was offered the position on Friday .  And I was back at work 2 weeks after the offer. It is an argument for people to obtain much more technical training.

    And if more people had solid technical skills positions there would be jobs for them. Right now Microsoft is hiring 2000 people, Amazon is hiring 5,000 people and Google is also hiring 5,000 people, this is here in the Seattle area.

    However, they have a difficult time filling those positions because we aren't training enough skilled workers. Oh and they pay much better than Miss Wyoming's pay scale, in fact in some cases they are paying large signing bonuses in order to attract skilled workers.


    by tmccarthy0 on Sun, 11/18/2012 - 12:05pm

    HP is laying off 27,000 people, Nokia staff is taking a nosedive and firing over 10,000 as they shed Symbian and Meego skills, Zynga is closing facilities, JC Penney & other retailers are cutting IT and outsourcing it to Oracle, IBM's laying off perhaps 2500 workers, while Kindle/Surface/Android are promising (plus Amazon's cloud services), Barnes & Noble, Motorola and other tech firms have fared poorly.

    Computer design folks are hot again as some new device trends ramp up (Apple, Google, Amazon again), while telco is firing people. The rise of the cloud means companies are consolidating skills (hey, you get to do 3 jobs for 1 pay) while shedding specialists, and typically these are outsourced jobs, say to Amazon, HP or Microsoft's cloud.

    And of course this is a single blip in the crystal ball. In 2009, IT hiring wasn't a clear shot, and it's been on and off again. (Clearwire went from promising to bankruptcy despite having a huge number of subscribers each month; companies like Joost and MySpace went down the crapper...)

    What "not training enough skilled workers" might mean is the jobs in demand may be changing yet again, and rather than re-train good people, IT companies just lay off and hope they find new already-trained people in up-and-coming areas like Big Data and cloud services. Of course where do you find trained people in a field that's existed 1-2 years? The mystery of our industry.


    by PeraclesPlease on Sun, 11/18/2012 - 1:17pm

    Looking at this, I suspect you might have a bit of a New York prejudice or skew on what you consider a good salary to be; note my bold:

    Welder Salary

    Average Welder salaries for job postings nationwide are 48% lower than average salaries for all job postings nationwide.
    Average Salary of Jobs with Related Titles

    I ended up looking this up mainly because of your argument that people won't want to learn these kind of skilled labor jobs unless they pay much better. Something about it just didn't ring quite right with me (atypically, for one of your arguments.)

    Turns out the salary she is offering is sort of a median nationwide for all jobs.

    On this scale, $5,000 increase would be a lot, but I suspect $45,000 plus benefits wouldn't make someone who isn't interested in welding at $40,000 become interested in learning it, and I suspect that increase wouldn't impress you, either? You'd still be making the same argument that it's not an attractive enough wage to get people interested? Do you think welders should be paid more than like 75% of what other people get? How much would you think it necessary to get people interested?

    It's one thing to suggest that we get a little wage inflation going for lot of people in lots of jobs, instead of wage deflation, so that everyone can spend more and rev the economy But it's quite another to suggest salaries rise to a level where certain jobs are attractive enough that a lot more people want to learn the skills.

    To go back to Friedman's piece, I think this is a key thing to takeaway:

    Moreover, in small manufacturing businesses like hers, explained Tapani, “unlike a Chinese firm that does high-volume, low-tech jobs, we do a lot of low-volume, high-tech jobs, and each one has its own design drawings. So a welder has to be able to read and understand five different design drawings in a single day.”

    And I don't think it is a bad thing that he takes it upon himself to pound away at this point from time to time. You may disagree with his prescriptions for solving this problem, but it's an issue that needs to be addressed It jumped right out at me as being the same issue as this:

    The Trade-Off That Created Germany’s Job Miracle, September 24, 2012

    German Small Businesses Reflect Country's Strength, August 13, 2012

    That you can either go protectionist in a globalized world and go back to manufacturing everything in big factories in your own country or you can go with the flow and do niche manufacturing in small businesses which require more skills from labor

    Another point I think people should be reminded of as regards this whole discussion: it  was never the case with skilled labor that entry level and journeymen are paid as much as masters, it's basically traditional in the history of civilization that you don't get paid as much as a master while you are learning the craft. You're going to have a hard time changing that notion.  In the Friedman example, she's willing to pay high end of standard to train someone to more exacting skills.


    by artappraiser on Sun, 11/18/2012 - 2:37pm

    It makes me wonder what her margins are, though. Business is hopping, but welding positions that are really engineering positions are still only paying $40K? She's trying to take a best-of-breed experienced welder up to an engineering diagram level, when entry level Mechanical Engineering runs $51K-$70K nationwide. Engineering Welding Manufacturing is avg $66K in Minneapolis (Stacy is just to the north). A Welding Engineer nationally is $63K, $67K in Minneapolis. Welding by itself in Stacy is listed at $41K. (SimplyHired). Elsewhere I see top 10% of welders at $26.50/hour. (~$57K)

    Besides this being an Army contract for Humvees, certainly requiring drug test & other requirements, seems like maybe the issue is the lady's actually trying to get by on the cheap?

     


    by PeraclesPlease on Sun, 11/18/2012 - 4:36pm

    While New York, particularly Manhattan, is an expensive place to live, it's not so much more expensive as most people think.  Apartments rent at an insane premium, for sure.  When I was in college, in New Mexico, I shared an apartment with amenities like washer/dryer, dishwasher, two parking spaces and a shared pool, that I could not afford here, even 15 years later.

    However... I don't need a car, so I don't have a car payment, a car insurance payment or a gas bill.  I pay way more in rent, I make more on an absolute basis, and I pay way more in taxes since we New Yorker pay city, state and federal income and excise taxes.  However, the 30-day unlimited Metrocard is one of the best local transport deals in the U.S.

    My point is... If I moved anywhere else in the country and got an equivalent job at the local salary, I'd be about where I am now, or maybe a little behind, depending on gas and insurance prices.

    I don't think I'm blinded by the raw numbers of New York City life.  I think NYC saves you, if you choose not to own a car and to rent your place, a lot more than other places charge you and... the salaries are higher but don't translate to other places.  I'd live like a king on my salary in my home town of Albuquerque.  But... nobody there would pay me this much to do what I do.

    The raw numbers you listed seem low to me, on an absolute basis.  They seem like numbers that skilled workers might reject, for good reason.

     


    by Michael Maiello on Sun, 11/18/2012 - 10:25pm

    You can get a job driving a truck here that pays just as well - no experience required.  All you need is a (relatively) clean driving record.  You don't need qualifications as a welder or even a class A or B driver's license.  Just a regular old class C will do.  $22/hr plus bennies.

    This is classic Friedman.  You start with the answer - America is suffering from a skills problem! - and then you find an anecdote that confirms your bias: "A-ha!  This lady needs engineers, but is only willing to pay welders!  Skills mismatch!!!'

    One thing we know for sure: Thomas Friedman will not be taking a job in Wyoming as a welder any time soon.


    by DF on Mon, 11/19/2012 - 11:16am

    This story is disturbing on many levels.  

    The one that bothers me most is that  the Tapani bid on and won a contract to armor Humvees without already having the capacity to complete the work.  Then there is the question of who awarded her the contract apparently without confirming that capacity.  I mean, it is armoring Humvees.

    Was Tapani unaware of the complexity of the job when she bid or unaware of the 'unskilled' training levels of the labor pool she would be drawing from?  I do applaud her for finding a single-mom Rosie Riveter with the skills and ability to train people in-house.  I certainly hope Rosie is paid as well as someone with all the 'right' certifications.

    Then there is this condescending and clueless statement from Friedman:

    Who knew? Welding is now a STEM job — that is, a job that requires knowledge of science, technology, engineering and math.

    I find I cannot actually respond to that without obscenities just now.  Maybe later.

    Here is something maybe Friedman (and you) should have checked out before writing:  

    Welders, Cutters, Solderers, and Brazers : Occupational Outlook Handbook : U.S. Bureau of Labor Statistics

    Oh, and thanks for the early morning bp boost. 

     


    by EmmaZahn on Mon, 11/19/2012 - 6:12am

    Aaaand:  By being willing to write about his late-life discovery that some jobs which do not require a college degree do require use of the human brain, Friedman reaches new heights in The Shameless Dumbfuckery of Obviousness.

    I will have some thoughts about this, but right now, like Emma, I have to go around and retrieve several teeth that flew across the room when my head exploded.


    by erica20 on Mon, 11/19/2012 - 11:43am

    Thomas Friedman is the human avatar of elite aloofness, disguised as bedrock insight that only appears to be so to other elites.  The view from 30,000 feet is crystal clear.


    by DF on Mon, 11/19/2012 - 1:07pm