More on Skills Gap or Wages Gap

The murmur about whether a manufacturing job skills gaps exists because salaries and wages in those skills areas actually are too low to attract interest, continues to show up. It seems to have moved from a low grumble to an audible growl. None of the examples we've run into are encouraging.There's a lot of middle ground to be found between uncompetitively high labor costs, and low wages that threaten middle class America. It doesn't appear that market forces are very interested in finding a place in the middle. Neither does it appear they're interested in determining the real story that everyone can agree to act on.

We've posted examples here before, and here's another one, reported by By Alejandra Cancino, a reporter for the Chicago Tribune.


http://www.chicagotribune.com/business/ct-biz-1003-austerity-manufacturing-workers-20121003,0,1816619.story

An exerpt:

"Jim Ellis had a job with benefits but gave it up for a shot at something with a bright future, if he could just get his foot in the door.

In this part of the country, that meant he wanted to work for Caterpillar Inc., the construction equipment powerhouse. Now the Canton, Ill., resident is on the morning shift at the company's East Peoria plant, installing fenders on tractors and working on hydraulic lines, a manufacturing job description that once promised an American middle-class lifestyle.

The reality for Ellis is nothing like that.

With the new job he started in January, Ellis' pay jumped by $5, to $15.57 per hour, but he has no medical benefits for himself or his 3-year-old daughter, whom he shares custody of with his ex-girlfriend. Between rent and child support, he acknowledges falling back on his parents for support.

"If you talk to my mom and dad, they would tell you I'm an idiot because I'm barely making ends meet," Ellis, 38, said."

Here's another:

"Wages have declined across many industries, including manufacturing, as unions have lost their bargaining clout, according to the Economic Policy Institute, a pro-labor think tank based in Washington. Between 1973 and 2011, real wages and benefits, which were adjusted to reflect the effect of inflation, rose only 10.7 percent; most of that increase occurred in the '90s, according to the Institute.

Robert Bruno, a professor of labor and employment relations at the University of Illinois at Chicago, said earnings in newer manufacturing jobs 'are not poverty wages, but they are not middle class. If the jobs don't pay sufficiently better, sadly, it will turn the manufacturing sector into another low-wage market, and we already have many of those.'

With more than 12.5 million people in the U.S. unemployed, some politicians push manufacturing as an answer to the nation's economic woes, suggesting that bringing back factory jobs from overseas represents a return to greater prosperity. Gary Pisano, a professor of business administration at Harvard Business School and co-author of "Producing Prosperity: Why America Needs a Manufacturing Renaissance," is skeptical of that approach."