Is The 'Skills Gap' Really A Thing?
MELISSA BLOCK, HOST:
One of the buzz phrases we hear in business and politics is the skills gap. It's the difference between the skills employers want and the ones workers actually have. Well, these days a lot of companies say they can't find the workers they need. But how real is the skills gap? NPR's Sonari Glinton went to a town with a long history of manufacturing - South Bend, Indiana - to find out.
SONARI GLINTON, BYLINE: Last week I did a story on Morning Edition about high-end manufacturing. I went to MTI, a company in South Bend, Indiana that has roots in the city go back to when the town was the center of the automotive industry. Dan Adams is one of the owners who gave me a tour.
DAN ADAMS: My great-grandfather started the business as a tool and die company primarily supporting Studebaker here in South Bend because they were manufacturing automobiles.
GLINTON: Now, Studebaker was a car maker that went out of business in the early '60s. Long before Studebaker went out of business, though, MTI began to diversify and they make big machines, building-sized machines that do welding.
ADAMS: So yeah, these machines are used to create components for jet engines so almost every jet engine that flies, whether it's a military jet or a passenger jet, has our welds in it. They're used to make the compressor sections as well as turbine sections of the engine. We're the only people in the world that make machines that do jet engine components.
GLINTON: So you essentially - you make the machines that make...
ADAMS: That make the parts that get incorporated into a gas turbine engine.
GLINTON: That is some complicated high-tech stuff that they've got going on there. The point of the last story was how few people they have working - only a couple of dozen. But here is the reason for this story...
ADAMS: I wish what we could go to the school system and be able to hire machinists, tool and die makers, people who have machining experience. I wish I could go to colleges and higher designers that knew how to design machine tools. It's not happening.
GLINTON: That right there is your skills gap showing. Adams says his company has had 12 open positions for over a year that have gone unfilled because they can't find the qualified candidates and those missing workers are hurting the company's bottom line.
ADAMS: So those 12 people that we're trying to hire are keeping us from growing.
GLINTON: Adams admits that there could be any number of factors keeping the job pool down. The plant is in South Bend and no diss on South Bend, but it's a hard sell for some. Doug Wait, the company's COO, says manufacturing doesn't have the cachet of say, taking your engineering degree to Silicon Valley and he cites another reason for the skills gap.
DOUG WAIT: From the '70s and the '80s, when manufacturing really took a hit and all the companies dropped all their programs for training and all these things because they were all expensive, you've dropped a generation of people out of the workforce for being able to do this kind of work. Look at my workforce - they're not young (laughter).
ROB SCOTT: I think manufacturers are always looking for a handout.
GLINTON: Rob Scott is an economist with the left-leaning Economic Policy Institute. He's more than dubious of the skills gap. For instance, he says there's the argument that not enough people are getting college degrees.
SCOTT: And yet, over the last decade we've seen an increase in number of college-educated workers and in fact, we've seen their wages fall so if there were really shortages of workers for highly skilled jobs - for jobs requiring college educations - you would see wages increase.
GLINTON: Scott points out that there are three times as many people looking for work as there are jobs available and over the past few years, wages have only increased by about 2 percent annually, at best.
SCOTT: Well, that's not evidence of a skills shortage. If there were a real skills shortage, firms would be willing to pay more to hire the workers that they need.
GLINTON: Meanwhile, the mayor South Bend, Pete Buttigieg, says he thinks there is a problem - maybe somewhat exaggerated - the question though, is how to solve it?
MAYOR PETE BUTTIGIEG: Do you solve it inside the company, which was a lot more economical to do when your company had 20 to 30,000 people and you could almost set up an internal university?
GLINTON: Those days are as far in the past as Studebaker.
BUTTIGIEG: The kinds of companies that we're talking about, they employ people by the hundreds, not the tens of thousands. That's actually better from a diversification perspective, that's actually better from a risk perspective, but it means not one of those companies is really going to be at a scale where it makes sense for them, internally, to solve the skills gap.
GLINTON: In order to grow business, Buttigieg says it's local communities that will have to solve this problem. Sonari Glinton, NPR News.
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