Don't Drink the Tea. Think With the WE.
Mar
2013
12

I think I saw a ghost. Wait, no. That was just the “skills gap.”

A new study by urbanologist Marc Levine debunks the theory that what is preventing a full recovery from the economic downturn is a “skills gap” caused by an unprepared American workforce.

In The Skills Gap and Unemployment in Wisconsin: Separating Fact From Fiction, Levine, a professor of history and economic development at the University of Wisconsin-Milwaukee, rebuffs the words of Tim Sullivan, special advisor to Gov. Scott Walker on workforce development. Sullivan, the former CEO of Bucyrus International suggests that “we don’t have a jobs crisis in Milwaukee, we have an education crisis.”

The popular Right-leaning theory asserts that workers are having trouble finding sustainable jobs not because there is an inadequate supply of said jobs but because workers lack the training and education to do the jobs that are available. This theory is severely flawed as evidenced by Dr. Levine’s research:

False: The skills of the workforce somehow dropped sharply between 2007 and 2009. Numerous studies by Nobel laureates, highly regarded economics institutes, and two former chairs of presidential councils of economic advisers all conclude that a sudden dropoff in workers’ skills over two years is utterly implausible as an explanation for massive unemployment. In the words of economist Heidi Shierholz of the Economic Policy Institute, “It is not the right workers we are lacking, it is work.”

• False: There is a vast pool of high-skilled jobs waiting to be filled. As Levine commented in the report, “Even if every unemployed person were perfectly matched to existing jobs, over 2/3 of all jobless would still be out of work.”

• False: Employers are trying in vain to attract skilled workers. If a “skills shortage” truly existed, employers would raise wages to attract workers with the special skills they seek. Instead, wages have fallen in Wisconsin since 2000, including in occupations like welding, where there is a supposed shortage of workers, Levine pointed out.

• False: Understaffed employers must make do with the skilled workers they have. A shortage of sought-after workers would lead employers to increase these workers’ hours. However, the report says, “average weekly hours worked in manufacturing have remained unchanged since 2000, while the average weekly overtime hours have actually declined by 12.8 percent since 2000.”

• False: New high-skill jobs have been created. Overall, Wisconsin retains a jobs deficit of 243,000, based on job losses since the Great Recession plus new positions needed for entrants into the labor market, according to a study by the Center on Wisconsin Strategy. Though Scott Walker came into office in 2011 famously promising the creation of 250,000 jobs during his four-year term, Wisconsin has ranked 42nd in job creation out of the 50 states.

• False: Workers with advanced degrees are more highly sought-after. A pervasive skills gap would raise the demand for workers with higher skills, measured in indicators like college degrees. Instead, the percentage of college-educated workers in jobs where they are obviously overqualified—as bartenders and retail clerks, for example—has risen sharply. “College graduates comprise 25% of retail salespersons and 21.6% of bartenders in the Milwaukee metro area—both jobs classified as requiring less than a high school diploma,” the report reads.

• False: The American job market will increasingly demand higher-skilled workers. Forecasts of future workforce needs show not an increased demand for high education and skills, but for occupations that require a high school degree or less, according to the report: “Of the 25 jobs projected by the Wisconsin Dept. of Workforce Development to provide the largest number of job openings in the state between 2010-2020, 22 of them require a high school degree or less and almost all require short-term, on-the-job training.”

So, how can a theory so desperately based in corporate propaganda and half-truths be so widely accepted? According to Levine, much of the blame lies in the media’s acceptance of the frame without doing research into the argument. Levine gives examples ranging from the Milwaukee Journal-Sentinel to Working In These Times:

They’ve relied on anecdotes and claims by CEOs that simply don’t measure up to reality,” says Levine. “There are still three unemployed people for every possible job opening.”

In a piece for Urban Milwaukee, writer Bruce Murphy looks into the Journal-Sentinel’s continued acceptance of Sullivan’s theory and their unwillingness to report on Levine’s study:

A 2012 survey by Manpower asked firms why they have difficulty hiring and 54 percent said candidates were “looking for more pay than is offered.” As Atlantic writer Barbara Kiviat put it, in response to such surveys, “When firms post job openings at a certain wage and no one comes forward, we call this a skills mismatch. In a different universe, we might call it a pay mismatch.”

In summarizing his argument, Murphy notes:

-After doing more than a dozen stories on the “skills gap,” giving headlines to Sullivan’s speech and editorializing in favor of the Sullivan report, the Milwaukee Journal Sentinel did no news story covering Levine’s report. Nor has it paid much attention to the overwhelming number of research reports and stories — including the Times story heavily based on Milwaukee — discounting the idea of the skills gap. Clearly the paper is convinced there is only one narrative here, and no other viewpoint will be reported.

-CEOs like Sullivan (who earned as much as $5.25 million annually in total compensation) typically cite the marketplace in defending their ever-escalating salaries. But nowhere in Sullivan’s report does he ever consider the idea that the marketplace is speaking when workers don’t show up to grab jobs for $12 an hour.

The report concludes that this theory was fabricated to push an agenda of low-wage, non-union jobs and to shield corporations from the blame of growing income inequality while they enjoy record profits. Levine puts it plainly:

“There’s a strong ideological component behind the skills gap trope,” Levine says. “It diverts attention (and policies) from the deep inequalities and market fundamentalism that created the unemployment crisis.”

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