
It's not the skills gap: why so many jobs are going unfilled - Futurebot
http://www.thefiscaltimes.com/2016/11/14/Its-Not-Skills-Gap-Why-So-Many-Jobs-Are-Going-Unfilled
======
dchmiel
I did some quick calculations to understand their stated problem of needing to
higher 40 more people since it is costing them millions in lost revenue each
month. "The labor shortage is costing the company some $3.8 million per month,
said Marty Davis, the company’s president and CEO."

$3.8 million * 12 months = $45.6 million per year in lost revenue.

Being conservative and assuming a 10% margin on their revenue figures this is
a loss of $4.56 million for the firm for the year.

$4.56 million divided by their labour need (40) means each worker brings in
$114,000 of margin. So as long as they pay below that they are ahead. If they
paid $25/hour for 2000 hours a year ($50,000) plus a 1.4 gross up for benefits
they could hire people at $70,000 ($50,000 * 1.4) and still earn a positive
margin of $44,000 ($114,00 - $70,000) leaving them $1.76 million of income.
($44,000 * 40).

What do they expect when they pay $36,000 per year (18*2000), plus any
benefits?

I’ve heard this stated before as there doesn’t seem to be a labour shortage
just a shortage of labour that you want to pay very little for. We don’t say
there are too little lawyers or investment bankers or management consultants.
Those jobs are or used to be the highest paid bringing in lots of supply from
eager graduates.

~~~
internaut
I've seen the same thing.

My hypothesis is that working class wages are more sticky than white collar
wages for reasons not strictly based on rationality.

I believe that Moravec's paradox explains why working class wages should be
higher and white collar wages should be lower than at present.

[https://en.wikipedia.org/wiki/Moravec's_paradox](https://en.wikipedia.org/wiki/Moravec's_paradox)

Presently this is stalled because it is too counterintutive. People can't get
their heads around the possibility of paying their gardeners and window
cleaners more than their accountants or lawyers. That's the middle class
version of The End of the World As We Know It.

This to me explains the existence of firms like Home Depot and the increasing
popularity of prefabs.

~~~
someguydave
"Presently this is stalled because it is too counterintutive."

No, it's supply and demand. Plenty of humans can physically rearrange stuff
but only a few can (or are authorized) to perform legal services. I also
wouldn't bet against the white collar incumbent's ability to make it illegal
to replace them.

~~~
dikdik
I don't know. Lots of people in consulting and other white collar gigs will
admit (over a few beers) that their job is peddling bullshit, putting together
spreadsheets, and really isn't that difficult.

Yea, some people can't cut it in jobs like that, but that doesn't really say
anything. Some of my friends that are physicians would struggle tremendously
to do the programming and statistics in my line of work, but they will likely
always earn more money than me.

Most jobs aren't as difficult as people love to pretend they are. The vast
discrepancies in pay across America are probably not warranted in many cases.

~~~
someguydave
>probably not warranted in many cases.

Ah but physicians prove my point - the state typically requires many years of
education and licensing to be a physician - whether you use the skills learned
or not.

>but they will likely always earn more money than me.

Probably so. In the US I think this is because physicians have been very good
at getting the state to drastically limit who can practice medicine. There are
nearly zero limitations who who can practice programming, and barely any
limitations on engineering.

Think about it - if you needed a to pass an examination, get a license, and
spend years on post-undergrad schooling & forced unpaid internships
programmers would have very high salaries.

~~~
dikdik
I absolutely agree, but if much of the "value" you provide is via
protectionist legislation then all we are saying here is that blue collar
workers should lobby for extremely high entry points and credentials for their
jobs so they "have the right" to earn decent salaries.

I think that's just a terrible idea all around. You should be able to earn a
great wage without suppressing the market to justify it. Or rather, people
should not be rewarded for building/propagating high entry points to their
careers. I get WHY it works out the way it does (bc capitalism), but it seems
that in the end we all lose out.

------
x0x0

       “We always have difficulties filling this position because we require 
       specific experience in test engineering in the electronics industry. There 
       might be total of 150 qualified people in the Midwest!” said one employer of 
       industrial engineers.
       
       To Hine, the focus on work experience suggested that employers were being 
       too picky. They wanted to hire someone who could be fully productive on day 
       one. But at the same time they weren’t willing or able to pay enough to 
       attract that perfect candidate.
    

I'll leave the similarities between this and our industry to the reader...

~~~
nickthemagicman
HR: What languages do you know?

Programmer: I have a really solid base in OOP and functional langs so I can
pick up a language pretty quickly.

HR: Right Right, but what languages are you most experienced in.

Programmer: Do you ask a carpenter which brand of saw he uses or doctor which
type of mri machine he prefers? Give me a few weeks, I'll have whatever
language you want down.

HR: We want someone who can provide value from day 1.

Programmer: There's your tech shortage.

~~~
flukus
> HR: We want someone who can provide value from day 1.

This is particulalrly bad, because no one can honestly promise that without
knowing more about what their walking into. If the codebase is spaghetti and
it takes a week to checkout and setup a project (alarmingly common). They're
rewarding the liars.

------
eli_gottlieb
>In many places, employers are also setting wages too low, defining
qualifications too narrowly, or not recruiting widely enough. Many people who
are eager to work can’t because they lack transportation, or don’t have
anybody to watch their children during the workday.

Well, I think that's a perfect summary. Employers either need to pay up, or
pony up taxes to local governments to pay up. A competent, polite, punctual
workforce doesn't happen all on its own, and trying to dragoon people into one
through poverty mostly just leaves you with unusable, crappy labor and low
productivity growth.

~~~
ScottBurson
Yeah, this picture seems really odd to me. Cambria is seeing soaring demand
for their products; they're having trouble keeping up, to the point that
they're actually losing sales and profit, because they can't staff up their
factory; for the most part they don't require skilled labor; so they recently
raised wages from $16.66 to a whopping $18/hr. Also their employees complain
of poor morale and not being listened to. And on the other hand, they have an
attendance problem.

So it sounds to me like, they can't hire people because they're stingy
assholes. Am I missing something? Seems like if they set out to share their
success with their employees instead of keeping it to themselves, they would
have better luck. So pay an attractive wage, like $24/hr, and treat people
well (and listen to them), and then if an employee has an attendance problem
you fire them, because you're not paying that kind of money for crappy
employees either.

Maybe someone can explain why I'm full of it, but from what I read here I have
a hard time feeling very sympathetic.

~~~
eli_gottlieb
>So it sounds to me like, they can't hire people because they're stingy
assholes. Am I missing something?

I don't think you're missing anything. I think that almost 40 years of nigh-
state-enforced labor glut have made employers very, _very_ entitled about
hiring. Now that demographics are running the other way (as the article
notes), with the total workforce actually shrinking slightly, they're being
bitten on the ass by that sense of entitlement.

A trained, punctual, polite, healthy, functional labor force does not spring
from nowhere! It springs from years to decades of cooperation between
employers, communities, and organized labor.

Or from sufficient graft to hire prison labor... which is still only mostly
going to work in the "slave states" and only for _extremely_ low-skilled
labor.

You can't have a shrinking total labor force, degradation of workers'
communities, _and_ easy hiring.

~~~
Futurebot
Exactly. Perceptions of there being a large reserve of army of labor lasts far
beyond the end of its existence, and employers not only expect it to be there,
but actually have it start impacting their worldview in some cases: the "you
should be happy to have a job / I could replace you tomorrow" attitude isn't
exactly a rational business calculation.

------
mswen
I was also curious that there was no mention of health insurance. I have
observed that my own family is paying considerably more for health insurance
while actually getting significantly poorer coverage when compared to a decade
ago.

An employer like those described in the article wouldn't necessarily need to
offer a significantly better wage than what was indicated if they provided a
higher quality health care plan and payed a greater portion of the premium.
And, offer fully paid dental insurance.

In the end I guess it comes down to money one way or another for the employer.

~~~
clusmore
Going a little off-topic here but I have never understood the model of having
health care provided by an employer. In Australia we all pay for our own
private health care (or choose not to). For one, I just can't understand how
health care is in any way related to employment. More importantly, what
happens if you get sick and then change jobs (and hence change health care
providers)? How do pre-existing conditions work in this model? Is this just a
way to de-incentivise job changing?

~~~
chrisbennet
It's a historical thing in the US.

During or possibly after WW2, wages were frozen in the US. Employers started
offering health insurance as a perk to get around the freeze and compete for
labor. At least that's what I remember reading.

