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No U.S. Skills Gap? Really? (http://www.huffingtonpost.com/sarah-webster/skills-gap-manufacturing_b_2221172.html)
It happened again the other day. I was at an event hosted by Sandvik when one of their customers, Gary Hossler from National Machinery in Tiffin, Ohio, told me a story that I hear all too often: His company struggles to keep up with demand. Not because they don't have enough capacity in their facility. Rather, they cannot find enough qualified workers in Ohio, a hotbed of manufacturing.
"It seems like we came out of the recession as fast we went in, and now we can't keep up," Hossler told me over a lunch of pasta and salad in the spotless showroom of Dynamic Machine of Detroit.
I hear these stories so often that I was quite surprised -- astonished really -- when a press release landed in my Inbox this October from the Boston Consulting Group with this headline: "Skills Gap in US Manufacturing is Less Pervasive Than Many Believe."
It was especially perplexing given that a 2011 study by Deloitte and The Manufacturing Institute concluded that as many as 600,000 manufacturing jobs are going unfilled. That's about 5 percent of the 12 million jobs that the U.S. government classifies as manufacturing. The Deloitte findings, which the report concluded are "remarkably consistent with previous skills gap studies," were based on a "nationally representative sample of 1,123 executives across 50 states and has a margin of error for the entire sample of +/- three percentage points." Their sample spanned all manufacturing industries and included executives at firms with sales ranging from less than $1 million to more than $5 billion.
The methodology is worth noting because the BCG report -- which captured national headlines and could, arguably, diminish attention on this very serious issue -- used an entirely different method of analysis. But more on that later.
Here's what BCG concluded:
1- "We see no evidence of a high-skilled labor gap nationwide."
2- "We estimate the high-skills gap in the US is only 80,000 to 100,000 workers."
3- "Only seven states -- six of which are in the bottom quartile of US State manufacturing --show significant or severe skills gaps." Those were identified as Alaska, New Mexico and Wyoming, where the shortage was described as severe, and Alabama, Nevada, Hawaii and Montana, where it was described as significant.
4- "Trying to hire high-skilled workers at rock-bottom rates is not a skills gap."
5- Workforce "shortages are local, not national, in nature and reflect imbalances driven by both location and job classes."
"Shortages of highly skilled manufacturing workers exist and must be addressed, but the numbers aren't as bad as many people believe," Harold Sirkin, a BCG senior partner and co-author of the research, said when announcing the findings. "Investment in training and skills development needs to be stepped up, but there's little reason to believe that the U.S. cannot remain on track for a manufacturing renaissance by 2020."
Now on to the important piece of the BCG research: the methodology.
BCG explained:
To identify where skill gaps exist in the U.S., BCG -- using wage data and manufacturing-job vacancy rates -- looked at localities where wage growth has exceeded inflation by at least 3 percentage points annually for five years. Wage growth is a widely accepted indicator of skills shortages in other sectors, such as energy; it reveals where employers have been forced to bid up pay to attract hard-to-find workers.
This data was supplemented with a BCG survey conducted in February of 100 U.S.-based manufacturing executives at companies with annual sales of $1 billion or greater.
Now, clearly, my repeatedly hearing the same stories or anecdotes about workforce challenges is hardly scientific. But sometimes a report just smacks of not jiving with reality, and this certainly strikes me as one of those cases. Especially after attending IMTS 2012 in Chicago, where everybody seemed to be talking about the workforce shortage.
So, I tried my best to reconcile my experiences with their report, and I came away with a lot of questions. For example, I question the validity of using wage inflation as the primary metric during a five-year period of analysis that included a Great Recession and depressed wages nationwide. I question using wage inflation in an industry where global competition and supplier contracts keep a lid on prices and wages. I think their survey of manufacturers was too small and focused too much on the largest firms.
What's more, I think much in BCG's own report reveals much about the severity of the problem. For example, having as many as 100,000 unfilled jobs during a period where unemployment has hovered at about 8 percent or more does strike me as severe. BCG's own report also notes that it takes six months or more to fill most high-skilled manufacturing production and engineering jobs. In fact, 35 percent said it took more than six months and 23 percent said it took three to six months, with 25 percent reporting one to three months and 18 percent reporting less than one month to fill a vacancy.
I talked to Gardner Carrick, Senior Director of Strategic Initiatives of The Manufacturing Institute, about why there might be such a large discrepancy between the study done by his organization and BCG's.
"If you were reading a text book," Carrick said, you might expect wage inflation to occur the way the BCG report expected it to based on basic supply-demand dynamics. However, he said that BCG didn't seem to take into account many of the complexities that distort those dynamics in the manufacturing sector and its labor market. "I'm not sure they took those into account," he said. "I think the market is a little more complicated."
Carrick also sticks to his report's assertion that the workforce shortage in manufacturing is a national problem. Indeed, 74 percent of respondents in their survey indicated that workforce shortages or skills deficiencies in skilled production roles are having a significant impact on their ability to expand operations or improve productivity.
"I certainly believe there is a workforce shortage, and I think it's pretty severe," Carrick said. "And that's based on our survey across all sectors and our conversations with manufacturers. They can't find enough people."
But if that were true, BCG's Sirkin told me, manufacturers would be raising wages and hiring people to train themselves, which is why he said wage inflation is a "more appropriate measure" of a skilled shortage. He also insisted that the basic laws of supply and demand still apply here, despite pressures that might seem to mitigate those factors.
"If they can't afford to hire and train, that's a different issue" than a workforce shortage, Sirkin said. "What it is is companies trolling for people at low wages."
More of the phenomenon of companies trying to avoid the task of training people and developing talent. They don't want to make the investment because people don't stay with one employer for decades anymore, and they want to take advantage of our political push to provide training-type education to people. Essentially fobbing the task off to the state(s).
We're massively over-educated and under-trained.
Quote from: MadImmortalMan on December 10, 2012, 01:45:24 PM
More of the phenomenon of companies trying to avoid the task of training people and developing talent. They don't want to make the investment because people don't stay with one employer for decades anymore
Well that is not exactly by choice companies ;)
People just assume their employer is going to lay them off eventually.
Quote from: MadImmortalMan on December 10, 2012, 01:45:24 PM
Quote
4- "Trying to hire high-skilled workers at rock-bottom rates is not a skills gap."
Heh
It's one of the strongest arguments for public financing of training/education: that companies that invest in it are unable to fully internalize the benefits.
Quote from: Admiral Yi on December 10, 2012, 02:12:03 PM
It's one of the strongest arguments for public financing of training/education: that companies that invest in it are unable to fully internalize the benefits.
True, but on the other hand, if companies are forced to do their own training, they would be more likely to treat those people better due to the sunk costs and investment they've made in them. It would promote job stability.
Quote from: MadImmortalMan on December 10, 2012, 02:18:30 PM
True, but on the other hand, if companies are forced to do their own training, they would be more likely to treat those people better due to the sunk costs and investment they've made in them. It would promote job stability.
You mean forced to as in no one else does it, or forced to as in the One World Government holds a gun to their head?
The issue is how does the training company get a return on its investment. Unless we bring back indentured servitude, a worker can get the training then walk away for better pay somewhere else.
Quote from: Admiral Yi on December 10, 2012, 02:22:55 PM
Quote from: MadImmortalMan on December 10, 2012, 02:18:30 PM
True, but on the other hand, if companies are forced to do their own training, they would be more likely to treat those people better due to the sunk costs and investment they've made in them. It would promote job stability.
You mean forced to as in no one else does it, or forced to as in the One World Government holds a gun to their head?
The issue is how does the training company get a return on its investment. Unless we bring back indentured servitude, a worker can get the training then walk away for better pay somewhere else.
Yes they can. By forced I mean they would need to do the training in order to get the skills they need. Not an external pressure. The fact that the worker could take his training and go would be a big incentive for the employer to treat him well.
Quote from: MadImmortalMan on December 10, 2012, 02:25:22 PM
Yes they can. By forced I mean they would need to do the training in order to get the skills they need. Not an external pressure. The fact that the worker could take his training and go would be a big incentive for the employer to treat him well.
Then the company gets no return on its training cost, and hence has no incentive to underwrite it.
Why?
Quote from: MadImmortalMan on December 10, 2012, 02:31:34 PM
Why?
The training increases the worker's productivity. That means he can command a higher wage. A company investing in training needs to retain part or all of that increased productivity to repay the training cost. If they have to pay the new, higher productivity wage or if a competitor bids away the worker at the new, higher productivity wage the original investing company doesn't retain anything.
No return on investment, no incentive. The logic is no different than with investment in machinery. If a press punch or an injection mold could sell itself to the highest bidder as soon as it had been bought we would see no investment in machinery either.
Yeah, it's an incentive to keep the employee happy. Not really a disincentive to train. I mean, the skills are required to do the work, so not training would make the entire operation pointless.
Employees are not a kin to machinery. Take, take, take & never give anything is that it?
Quote from: Admiral Yi on December 10, 2012, 02:39:52 PM
The training increases the worker's productivity. That means he can command a higher wage. A company investing in training needs to retain part or all of that increased productivity to repay the training cost. If they have to pay the new, higher productivity wage or if a competitor bids away the worker at the new, higher productivity wage the original investing company doesn't retain anything.
No return on investment, no incentive. The logic is no different than with investment in machinery. If a press punch or an injection mold could sell itself to the highest bidder as soon as it had been bought we would see no investment in machinery either.
What would you recommend to fix the problem?
Quote from: MadImmortalMan on December 10, 2012, 02:55:25 PM
Yeah, it's an incentive to keep the employee happy. Not really a disincentive to train. I mean, the skills are required to do the work, so not training would make the entire operation pointless.
"Keeping the employee happy" typically means paying the higher productivity wage and losing the return on investment.
Quote from: Admiral Yi on December 10, 2012, 02:39:52 PM
Quote from: MadImmortalMan on December 10, 2012, 02:31:34 PM
Why?
The training increases the worker's productivity. That means he can command a higher wage. A company investing in training needs to retain part or all of that increased productivity to repay the training cost. If they have to pay the new, higher productivity wage or if a competitor bids away the worker at the new, higher productivity wage the original investing company doesn't retain anything.
No return on investment, no incentive. The logic is no different than with investment in machinery. If a press punch or an injection mold could sell itself to the highest bidder as soon as it had been bought we would see no investment in machinery either.
Which is all a load of shit. Companies don't train because they don't value their employees and will lay them off at the drop of a hat. What's the point of putting money into some schnooks that you're just going to get rid of to get a bump in your quarterly numbers?
Quote from: Grey Fox on December 10, 2012, 03:01:55 PM
Employees are not a kin to machinery. Take, take, take & never give anything is that it?
I'm not working for free. Are you?
Quote from: merithyn on December 10, 2012, 03:15:37 PM
What would you recommend to fix the problem?
The two obvious alternatives are public financing and indentured servitude. Of these two, I prefer the second. A model already exists in the military. They give you a free college education, you give them X years of your life. JD, Y years, MD, Z years.
Quote from: Admiral Yi on December 10, 2012, 03:29:43 PM
Quote from: merithyn on December 10, 2012, 03:15:37 PM
What would you recommend to fix the problem?
The two obvious alternatives are public financing and indentured servitude. Of these two, I prefer the second. A model already exists in the military. They give you a free college education, you give them X years of your life. JD, Y years, MD, Z years.
Most companies already have that. If they pay for your education, you're required to either give them X number of years back, or pay the full amount. My company, for instance, will help you pay for additional training up to a certain amount, but you then owe them the time that you're in school (usually from 2-6 years) plus an additional 2-3 years, depending on how much they're into you for. If you leave prior to any of that happening, you have to pay back everything, whether you leave on your own terms or theirs.
Quote from: Admiral Yi on December 10, 2012, 03:26:12 PM
Quote from: MadImmortalMan on December 10, 2012, 02:55:25 PM
Yeah, it's an incentive to keep the employee happy. Not really a disincentive to train. I mean, the skills are required to do the work, so not training would make the entire operation pointless.
"Keeping the employee happy" typically means paying the higher productivity wage and losing the return on investment.
Not sure why paying for the increased productivity is losing the return on investment. Your scenario assumes the increased productivity equals the cost of training. If that is true then the company needs to look at how it trains its people.
Assuming a company can train people in an efficient manner than then the company will become more productive and profitable. Sure a portion of that increased profitability goes toward the increased cost of keeping the now more productive employee. But in the end the company is still more profitable then it had been.
That said, government funded training provides an answer to reducing unemployment for certain groups since it provides an incentive for employers to give job offers to that particular pool of people who might otherwise be less employable.
Quote from: Admiral Yi on December 10, 2012, 03:26:12 PM
"Keeping the employee happy" typically means paying the higher productivity wage and losing the return on investment.
With regards to highly-skilled workers, it does not. In software development, for instance, people frequently choose lower-paying jobs that have better fringe benefits, work environments, locations, and company name recognition. Presuming all your employees care about is money in their pocket breeds mercenary attitudes in both employers and employees.
Quote from: crazy canuck on December 10, 2012, 03:38:28 PMNot sure why paying for the increased productivity is losing the return on investment. Your scenario assumes the increased productivity equals the cost of training. If that is true then the company needs to look at how it trains its people.
Yeah.
Seems to me the ideal is that both the worker and the company gains some benefit from the employee's increased productivity.
Quote from: crazy canuck on December 10, 2012, 03:38:28 PM
Not sure why paying for the increased productivity is losing the return on investment. Your scenario assumes the increased productivity equals the cost of training. If that is true then the company needs to look at how it trains its people.
Assuming a company can train people in an efficient manner than then the company will become more productive and profitable. Sure a portion of that increased profitability goes toward the increased cost of keeping the now more productive employee. But in the end the company is still more profitable then it had been.
We can assume a world of hyperefficient job training, in which $1 of training cost results in $10,000/year worth of increased productivity. The trained worker is now worth $10K year more on the labor market. He will be bid away from the training company for $10K more a year in wages. Or alternatively the training company can pay him $10K more a year to retain him. The company is only out $1, but it's $1 that they get nothing in return for. The issue is not the ratio of costs to benefits, it's the ownership and mobility of the benefits.
Is this the part of the show when you call me a dick for disagreeing with you, or does that come later?
Quote from: Admiral Yi on December 10, 2012, 03:55:13 PM
Quote from: crazy canuck on December 10, 2012, 03:38:28 PM
Not sure why paying for the increased productivity is losing the return on investment. Your scenario assumes the increased productivity equals the cost of training. If that is true then the company needs to look at how it trains its people.
Assuming a company can train people in an efficient manner than then the company will become more productive and profitable. Sure a portion of that increased profitability goes toward the increased cost of keeping the now more productive employee. But in the end the company is still more profitable then it had been.
We can assume a world of hyperefficient job training, in which $1 of training cost results in $10,000/year worth of increased productivity. The trained worker is now worth $10K year more on the labor market. He will be bid away from the training company for $10K more a year in wages. Or alternatively the training company can pay him $10K more a year to retain him. The company is only out $1, but it's $1 that they get nothing in return for. The issue is not the ratio of costs to benefits, it's the ownership and mobility of the benefits.
Is this the part of the show when you call me a dick for disagreeing with you, or does that come later?
No but this is the part of the show where I say you are acting like a dick by adding your last sentence.
Also, you are wrong. No company could be profitable if it paid its employees wages equal to the value of their productivity. Your assumption that increased training necessarily increases their wages to the value of the increased productivity is nonsense.
It seems to me that if the training were that expensive, then the tax burden required for the state to do it would be roughly equal to the opportunity cost of companies doing it themselves.
Quote from: crazy canuck on December 10, 2012, 03:59:02 PM
Also, you are wrong. No company could be profitable if it paid its employees wages equal to the value of their productivity. Your assumption that increased training necessarily increases their wages to the value of the increased productivity is nonsense.
Not only that, but he's also assuming that the job market is incredibly efficient when it isn't, and that any time someone gains a new skill that he will immediately leave his job for a new one.
Quote from: MadImmortalMan on December 10, 2012, 04:00:17 PM
It seems to me that if the training were that expensive, then the tax burden required for the state to do it would be roughly equal to the opportunity cost of companies doing it themselves.
Of course. Moving the cost to the public sector doesn't reduce the cost. But that's one of main things the public sector is supposed to be doing: internalizing externalities. "Society" would be better off if all those jobs were filled with trained people--"society" would be producing more and earning more. But the private sector won't do it because of the externality that I've described.
Wait, MiM, isn't this just a thread to see what Seedy will post?
Quote from: crazy canuck on December 10, 2012, 03:59:02 PM
Also, you are wrong. No company could be profitable if it paid its employees wages equal to the value of their productivity. Your assumption that increased training necessarily increases their wages to the value of the increased productivity is nonsense.
That isn't really crucial to the argument. The fact of the matter is that positive externalities exist when a company trains their workers. Whether there is still enough left for the company to get something back or not is not that important: the level of investment in human capital is still going to be suboptimal.
Quote from: Admiral Yi on December 10, 2012, 03:55:13 PM
We can assume a world of hyperefficient job training, in which $1 of training cost results in $10,000/year worth of increased productivity. The trained worker is now worth $10K year more on the labor market. He will be bid away from the training company for $10K more a year in wages. Or alternatively the training company can pay him $10K more a year to retain him. The company is only out $1, but it's $1 that they get nothing in return for. The issue is not the ratio of costs to benefits, it's the ownership and mobility of the benefits.
If those assumptions hold, then your argument make sense, but I'm not sure they're appropriate. I've never heard of a place where people get paid the value of their productivity in wages.
Quote from: DGuller on December 10, 2012, 04:16:30 PM
Quote from: crazy canuck on December 10, 2012, 03:59:02 PM
Also, you are wrong. No company could be profitable if it paid its employees wages equal to the value of their productivity. Your assumption that increased training necessarily increases their wages to the value of the increased productivity is nonsense.
That isn't really crucial to the argument. The fact of the matter is that positive externalities exist when a company trains their workers. Whether there is still enough left for the company to get something back or not is not that important: the level of investment in human capital is still going to be suboptimal.
There is always going to be some risk in training employees. But the judgment has to be whether it is better to train or do nothing and simply hope that the company can hire more productive employees which seems to me to be an even bigger craps shoot.
Quote from: Jacob on December 10, 2012, 04:23:20 PM
If those assumptions hold, then your argument make sense, but I'm not sure they're appropriate. I've never heard of a place where people get paid the value of their productivity in wages.
Once you factor in overhead, non-wage labor costs, and "reasonable economic return" on capital that should be what folks get paid in a competitive market.
In a monopolistic or oligopolistic market, companies will be able to charge a higher markup. They are able to extract what economists call "rents."
Quote from: crazy canuck on December 10, 2012, 04:32:29 PM
There is always going to be some risk in training employees. But the judgment has to be whether it is better to train or do nothing and simply hope that the company can hire more productive employees which seems to me to be an even bigger craps shoot.
Those are not the only two options. Training is not an all or nothing proposition. It may be that despite positive externalities, some type of training brings such huge returns that even after externality leakage, it's still worthwhile. Other kinds of training may still be socially worthwhile, but don't have a high enough return to pay back the employer after externalities take their cut. We would be better off as society if the latter type of training occurred as well, but it won't be done because it's not worth it to those who foot the bill.
Quote from: Admiral Yi on December 10, 2012, 04:37:24 PMOnce you factor in overhead, non-wage labor costs, and "reasonable economic return" on capital that should be what folks get paid in a competitive market.
In a monopolistic or oligopolistic market, companies will be able to charge a higher markup. They are able to extract what economists call "rents."
Why do you factor in "reasonable economic return" in the pre-training wage, but not in the post-training wage?
Quote from: Jacob on December 10, 2012, 04:39:40 PM
Why do you factor in "reasonable economic return" in the pre-training wage, but not in the post-training wage?
I don't understand the question.
There is also the market-making aspect. If the employers were training the employees, then the number of employees being trained would always match the demand for those skills. If the state does it, then there might be an imbalance.
OK, I think I get it Jake.
Non labor costs apply to both situations. Just not made explicit in the first.
When I talk about productivity I'm talking about marginal productivity, not average productivity regardless of other input costs.
Quote from: MadImmortalMan on December 10, 2012, 04:49:18 PM
There is also the market-making aspect. If the employers were training the employees, then the number of employees being trained would always match the demand for those skills. If the state does it, then there might be an imbalance.
That is why state sponsored training programs are more general in nature and then partner with companies to do more in depth apprentice type training.
You know what this thread needs right now? Some highly trained MBAs.
Quote from: PDH on December 10, 2012, 04:12:48 PM
Wait, MiM, isn't this just a thread to see what Seedy will post?
Meh.
Yi, what makes you think talented workers will stay at your firm if you don't train them? Soon you'll be stuck with those without potential or motivation. Well played.
Quote from: Iormlund on December 10, 2012, 07:53:06 PM
Yi, what makes you think talented workers will stay at your firm if you don't train them?
Pay.
Quote from: Baron von Schtinkenbutt on December 10, 2012, 03:43:32 PM
Quote from: Admiral Yi on December 10, 2012, 03:26:12 PM
"Keeping the employee happy" typically means paying the higher productivity wage and losing the return on investment.
With regards to highly-skilled workers, it does not. In software development, for instance, people frequently choose lower-paying jobs that have better fringe benefits, work environments, locations, and company name recognition. Presuming all your employees care about is money in their pocket breeds mercenary attitudes in both employers and employees.
But those are just other forms of compensation with a monetary value. Fringe benefits are compensation that costs the company hard cash, "location" reflects higher rents paid for the office, "name recognition" reflects goodwill and trademark investments, "work environment" can be many things but again typically involves costs - availibility of snacks, special break rooms, transport options, etc. From the company's POV these are costs that have to be paid for.
Quote from: Admiral Yi on December 10, 2012, 02:39:52 PM
Quote from: MadImmortalMan on December 10, 2012, 02:31:34 PM
Why?
The training increases the worker's productivity. That means he can command a higher wage. A company investing in training needs to retain part or all of that increased productivity to repay the training cost. If they have to pay the new, higher productivity wage or if a competitor bids away the worker at the new, higher productivity wage the original investing company doesn't retain anything.
No return on investment, no incentive. The logic is no different than with investment in machinery. If a press punch or an injection mold could sell itself to the highest bidder as soon as it had been bought we would see no investment in machinery either.
Your rich person tragedy of the commons fails to convince. The free-riding employer would face serious difficulties if all they did was attempt to headhunt fully-trained individuals brought up by more responsible companies. First, of course, is that inertial factors add friction to the labor market, that is an employee that has spent a couple of years being trained in one location for one company is more likely to have put down roots where he's been living, and thus will demand a premium to pull up stakes to go work for strangers.
Second, the free-riding employer is sacrificing time and taking a risk of not being able to fully staff its projects. While they're waiting on other employers to produce experienced workers that they can peel off, they're suffering from wasted capacity and... OH WAIT THAT'S THE POINT OF THE ARTICLE.
Finally, someone has to pay for training and education. We've decided to do it in a preposterously inefficient manner that introduces devastating supply-demand imbalances. Good work, hybrid economy!
I'm having a tough time figuring out the main theme of your post Ide. :hmm:
Quote from: Admiral Yi on December 11, 2012, 04:36:52 AM
I'm having a tough time figuring out the main theme of your post Ide. :hmm:
Apparently the new buzzword now is "free-riding".
Quote
Shouting and stomping, right-to-work protesters swarm state Capitol
They crowded the state Capitol on Thursday -- shouting, chanting, clapping their hands and, at times, stomping their feet -- all in an attempt to get their voices heard.
Among the chants: "Union busting is disgusting." "This is what democracy looks like."
As lawmakers in the House and Senate debated the merits of right-to-work legislation, protesters were out in full force, both outside their chambers and on the grounds. Some carried signs that declared, "Kill the Bill."
"We feel like we're defending our way of life," said Paul Watson of Twin Lake, who works for Alcoa.
Watson, a member of UAW Local 1243, called Republicans pushing the legislation "cowards" and said he believes it is in retaliation for Proposal 2, the initiative that failed at the polls in November that would have amended the Michigan Constitution to guarantee public and private-sector employees the right to organize and collectively bargain.
"They're just slapping us in the face one more time," he said.
Tempers flared inside the Capitol, and Michigan State Police reported several protesters were arrested and mace was sprayed into a crowd that was attempting to rush the Senate floor.
•RELATED: Police arrest several protesters, spray mace into crowd inside Michigan Capitol (video)
There also was mounting anger in the crowd outside because state officials kept the doors to the Capitol locked for hours, preventing protesters from entering. In response, union activists ordered protesters to gather outside each entrance, saying, "Nobody in, nobody out."
The doors opened shortly before 5 p.m. after a court order, and after Democrats staged a brief walkout in protest.
Several lawmakers addressed the crowd, saying they had no intention of going back in until the government building was opened to the public.
Protesters came from across the state, including Gloria Keyes of Muskegon, who also works for Alcoa. She said she was concerned that workers' wages and benefits will be reduced if the legislation passes.
"I don't know what we can do," she said. "But I do know that in some way, we have to stop this." She and Watson called the atmosphere "antagonistic."
"If they cared about the will of the people, they would open the doors and let us in," Keyes said.
Laura Webb of DeWitt, who retired recently as a state worker, held a sign she hoped would remind people that unions helped secure such things such as the eight-hour workday, lunches and breaks. The legislation, she said, "is just the first nail in the coffin to kill the unions."
Jim Nelson, also of DeWitt, went to Lansing to show his union support.
"It's important that people in the state realize that the middle class is built on unions and public-service workers," Nelson said. "The middle class is the force that creates jobs.
"The right-to-work initiative is simply a way for free-riding workers to take advantage of the hard work of union bargaining."
http://www.freep.com/article/20121207/NEWS06/312070072/1001/rss01 (http://www.freep.com/article/20121207/NEWS06/312070072/1001/rss01)
Those are both legitimate uses of the term. It's just that Ide ran a little hot and cold in his post.
Somebody wake me up when we're finally back in 1894, please.
Quote from: CountDeMoney on December 11, 2012, 06:51:52 AM
Somebody wake me up when we're finally back in 1894, please.
Ide really doesn't have much of a political ideology or belief structure. It's 100% greed with him.
Quote from: Neil on December 11, 2012, 08:37:23 AM
It's 100% greed with him.
You going to try to say that it isn't?
98% Greed
1% Bad Movies
1% Evil
Quote from: Baron von Schtinkenbutt on December 10, 2012, 03:43:32 PM
Quote from: Admiral Yi on December 10, 2012, 03:26:12 PM
"Keeping the employee happy" typically means paying the higher productivity wage and losing the return on investment.
With regards to highly-skilled workers, it does not. In software development, for instance, people frequently choose lower-paying jobs that have better fringe benefits, work environments, locations, and company name recognition. Presuming all your employees care about is money in their pocket breeds mercenary attitudes in both employers and employees.
I don't think that valuing other forms of compensation besides higher cash wages is unique to highly-skilled workers. Highly-skilled workers may have more leverage to demand those other things, but unskilled workers like them, too.
Quote from: Admiral Yi on December 10, 2012, 03:29:43 PM
The two obvious alternatives are public financing and indentured servitude. Of these two, I prefer the second. A model already exists in the military. They give you a free college education, you give them X years of your life. JD, Y years, MD, Z years.
That exists over here for the NHS, education and in a way with post grad law qualifications.
Quote from: Admiral Yi on December 11, 2012, 04:36:52 AM
I'm having a tough time figuring out the main theme of your post Ide. :hmm:
I think it's something like this:
Your elegant model of employer incentives not to train has hidden premises which may be at odds with reality: namely, that changing jobs is relatively frictionless and costless to the employee, and that all training is perfectly universal is equally valuable to any employer. In a real world where changing jobs carries costs and job-specific training is only partially portable, skilled labor will be more sticky, and it may even be that the more sophisticated the training, the more sticky it will be.
At the same time, the company that chooses not to train and relies on the labor market to supply its skilled labor needs faces the risk that the market will not supply the skills that it needs exactly when it needs it, or that there will be significant time lags to bring on labor that will complicate investment planning, or that the skilled labor it hires from the market will not be perfectly matched to its own needs since some skills will be employer-specific. A rough analogy would be a baseball team that relies entirely on the free agent market to fill its starting lineup - you save the up front costs of scouting and farm teams, but have to pay top dollar for talent - and the year you happen to need a new second basement just happens to be a year when the free agent pickings are slim at that position (but there are 3 centerfielders).
Bottom line is that it may be rational for a firm to spend significant resources training workers even if it knows there will be some leakage.
Quote from: The Minsky Moment on December 11, 2012, 10:20:47 AM
Quote from: Admiral Yi on December 11, 2012, 04:36:52 AM
I'm having a tough time figuring out the main theme of your post Ide. :hmm:
I think it's something like this:
Your elegant model of employer incentives not to train has hidden premises which may be at odds with reality: namely, that changing jobs is relatively frictionless and costless to the employee, and that all training is perfectly universal is equally valuable to any employer. In a real world where changing jobs carries costs and job-specific training is only partially portable, skilled labor will be more sticky, and it may even be that the more sophisticated the training, the more sticky it will be.
At the same time, the company that chooses not to train and relies on the labor market to supply its skilled labor needs faces the risk that the market will not supply the skills that it needs exactly when it needs it, or that there will be significant time lags to bring on labor that will complicate investment planning, or that the skilled labor it hires from the market will not be perfectly matched to its own needs since some skills will be employer-specific. A rough analogy would be a baseball team that relies entirely on the free agent market to fill its starting lineup - you save the up front costs of scouting and farm teams, but have to pay top dollar for talent - and the year you happen to need a new second basement just happens to be a year when the free agent pickings are slim at that position (but there are 3 centerfielders).
Bottom line is that it may be rational for a firm to spend significant resources training workers even if it knows there will be some leakage.
Beyond that, the idea that there are companies that don't train I find questionable. Every company has to do some training, even if it doesn't have a formal training program. Companies that think that they're saving on training may actually be paying higher training costs, but those costs are the ones involved in fixing mistakes and re-doing work, not paying for a formal training program.
Quote from: Sheilbh on December 11, 2012, 10:11:26 AM
Quote from: Admiral Yi on December 10, 2012, 03:29:43 PM
The two obvious alternatives are public financing and indentured servitude. Of these two, I prefer the second. A model already exists in the military. They give you a free college education, you give them X years of your life. JD, Y years, MD, Z years.
That exists over here for the NHS, education and in a way with post grad law qualifications.
I guess that private companies in highly sophisticated fields will do the same. The brother of one of my best friends, who studied Geology, got hooked up in a program with Repsol, Spain's big oil company, upon graduation. He was offered a fancy master's degree in oil and gas exploration, wholly paid by the company, with a commitment to hiring him after being done with it. For the first couple of years he'd be destined to somewhere in the ass of the world (in his case the Argentinian boondonks) and then he could get the opportunity to work in the Madrid HQ. If he bailed out before finishing his assignment he'd have to pay back the cost of his masters to the company.
Quote from: Ed Anger on December 11, 2012, 09:30:51 AM
98% Greed
1% Bad Movies
1% Evil
:lol:
Comics, too. I like comics.
Yi: I guess the main theme is that firms, by abdicating responsibility to train, to whatever other actor--whether it be the educational complex or other firms--are not likely to reap much of a windfall, because 1)those who have developed human capital have an advantage in keeping them, due to labor market frictions like homes, friends, and families and 2)because, all things being equal, they will continually face staff shortage if they do not develop their own people instead of relying on whatever they can get. Of course, if they're able to outspend rivals by huge amounts, they can buy what mercenaries they need. But their attempt to free ride--and that is not a fucking "buzz word"--and reap all the rewards of others' investment does have trade-offs.
Quote from: JoanI think it's something like this:
Your elegant model of employer incentives not to train has hidden premises which may be at odds with reality: namely, that changing jobs is relatively frictionless and costless to the employee, and that all training is perfectly universal is equally valuable to any employer. In a real world where changing jobs carries costs and job-specific training is only partially portable, skilled labor will be more sticky, and it may even be that the more sophisticated the training, the more sticky it will be.
At the same time, the company that chooses not to train and relies on the labor market to supply its skilled labor needs faces the risk that the market will not supply the skills that it needs exactly when it needs it, or that there will be significant time lags to bring on labor that will complicate investment planning, or that the skilled labor it hires from the market will not be perfectly matched to its own needs since some skills will be employer-specific. A rough analogy would be a baseball team that relies entirely on the free agent market to fill its starting lineup - you save the up front costs of scouting and farm teams, but have to pay top dollar for talent - and the year you happen to need a new second basement just happens to be a year when the free agent pickings are slim at that position (but there are 3 centerfielders).
Bottom line is that it may be rational for a firm to spend significant resources training workers even if it knows there will be some leakage.
:yes:
P.S.: Dunno what's greedy about suggesting beneficial changes to the economy. You guys are way cynical. :(
Quote from: The Minsky Moment on December 11, 2012, 10:20:47 AM
I think it's something like this:
Your elegant model of employer incentives not to train has hidden premises which may be at odds with reality: namely, that changing jobs is relatively frictionless and costless to the employee, and that all training is perfectly universal is equally valuable to any employer. In a real world where changing jobs carries costs and job-specific training is only partially portable, skilled labor will be more sticky, and it may even be that the more sophisticated the training, the more sticky it will be.
At the same time, the company that chooses not to train and relies on the labor market to supply its skilled labor needs faces the risk that the market will not supply the skills that it needs exactly when it needs it, or that there will be significant time lags to bring on labor that will complicate investment planning, or that the skilled labor it hires from the market will not be perfectly matched to its own needs since some skills will be employer-specific. A rough analogy would be a baseball team that relies entirely on the free agent market to fill its starting lineup - you save the up front costs of scouting and farm teams, but have to pay top dollar for talent - and the year you happen to need a new second basement just happens to be a year when the free agent pickings are slim at that position (but there are 3 centerfielders).
Bottom line is that it may be rational for a firm to spend significant resources training workers even if it knows there will be some leakage.
I think some people may have gotten the misconception that I am claiming companies have *zero* incentive to train in all cases and never do. Obviously that is not true. Everybody here has probably had some amount of on the job training.
DGuller did a good job of enunciating the point I was trying to make: that companies conduct a suboptimal amount of training (from a societal POV) because of the externality. A suboptimal amount can be and usually is more than zero.
Quote from: The Larch on December 11, 2012, 11:07:52 AM
I guess that private companies in highly sophisticated fields will do the same. The brother of one of my best friends, who studied Geology, got hooked up in a program with Repsol, Spain's big oil company, upon graduation. He was offered a fancy master's degree in oil and gas exploration, wholly paid by the company, with a commitment to hiring him after being done with it. For the first couple of years he'd be destined to somewhere in the ass of the world (in his case the Argentinian boondonks) and then he could get the opportunity to work in the Madrid HQ. If he bailed out before finishing his assignment he'd have to pay back the cost of his masters to the company.
:angry: hey watch it!
Quote from: Admiral Yi on December 11, 2012, 05:34:34 PM
DGuller did a good job of enunciating the point I was trying to make: that companies conduct a suboptimal amount of training (from a societal POV) because of the externality. A suboptimal amount can be and usually is more than zero.
That's an empirical question - you would need data on the amount expended on training and a calculation of an optimal amount.
If you got that - then you could conclude that training is suboptimally low, but that wouldn't prove the externality was the cause.
Quote from: Admiral Yi on December 10, 2012, 08:06:53 PM
Quote from: Iormlund on December 10, 2012, 07:53:06 PM
Yi, what makes you think talented workers will stay at your firm if you don't train them?
Pay.
Maybe in that side of the Pond. My experience says talented workers that are deprived of ways of advancing their careers will soon look for greener pastures.
Quote from: Iormlund on December 11, 2012, 07:25:29 PM
Quote from: Admiral Yi on December 10, 2012, 08:06:53 PM
Quote from: Iormlund on December 10, 2012, 07:53:06 PM
Yi, what makes you think talented workers will stay at your firm if you don't train them?
Pay.
Maybe in that side of the Pond. My experience says talented workers that are deprived of ways of advancing their careers will soon look for greener pastures.
I guess it depends on what sort of workers, Yi is talking about.
Over here it's not uncommon that if your company pays for an expensive training (say, CPA courses or similar) you sign a waiver that if you leave the company withinin two or three years after the training you have to pay back all or part of the costs.
Does that exist in the U.S.?
Yes, as has been said in this thread by me. :contract:
It also happens when they pay for college courses for you.
Quote from: merithyn on December 12, 2012, 12:42:00 AM
Yes, as has been said in this thread by me. :contract:
:blush:
Women are best seen and not heard.
And then better when not seen because they are in the kitchen baking pie.
:yes:
I think you guys are looking for Meri's historical woman thread.
Heh, hysterical woman threads.