February 24, 2017
The Associated Press ran a story, picked up by the PBS Newshour, that told readers:
“…factory jobs exist, CEOs tell Trump, skills don’t.”
The piece presents complaints from a number of CEOs of manufacturing companies that they can’t find the workers with the necessary skills. The piece does note the argument that the way to get more skilled workers is to offer higher pay, but then reports:
“…some data supports the CEOs’ concerns about the shortage of qualified applicants. Government figures show there are 324,000 open factory jobs nationwide — triple the number in 2009, during the depths of the recession.”
The comparison to 2009 is not really indicative of anything, since this was a time when the economy was facing the worst downturn since the Great Depression and companies were rapidly shedding workers. A more serious comparison would be to 2007, before the recession. The job opening rate in manufacturing for the last three months has averaged 2.5 percent, roughly the same as in the first six months of 2007, which was still a period in which the sector was losing jobs.
According to the Bureau of Labor Statistics, average hourly earnings of production and non-supervisory workers in manufacturing has risen by 2.4 percent over the last year. This means that manufacturing firms are not acting in a way consistent with employers having trouble finding workers. This suggests that if there is a skills shortage it is among CEOs who don’t understand that the price of an item in short supply, in this case qualified manufacturing workers, is supposed to increase.
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