Journalists often say, somewhat jokingly, that if you find three things moving in the same direction you have a trend. Well, I have two that have recently crossed my transom heading in the same direction, so maybe that’s enough for a column.
The theme that connects the two disparate dispatches (tied arbitrarily by originating in the geographical midwest of the U.S.) is that they attribute some portion of stubbornly high U.S. unemployment to structural problems in the job market, rather than simply the result of a near-flat economy, worrisome outlooks and the costs involved in adding full-time employees.
The newer of these two recent missives was released Wednesday by the global temporary worker firm, Manpower Inc. The firm’s findings, based on a first calendar quarter survey of more than 35,000 employers in 36 countries, included a global shortgage of skilled, blue-collar workers. Despite all the idle workers out there, Manpower cites an “acute” shortgage of skilled production people in the U.S., Germany, France, Italy and other nations.
Separately, earlier this month, one of the newer Federal Reserve policy officials talked about a skills mismatch that might account for as much of one-third of the 9.5% U.S. unemployment rate.
Narayana Kocherlakota, who took over as the president of the Federal Reserve bank of Minneapolis in October 2009, said that based on a breakdown in the relationship between job openings and the unemployment rate, we are apparently experiencing an employment mismatch. “Firms have jobs, but can’t find appropriate workers,” he said, as noted previously in this column. “The workers want to work, but can’t find appropriate jobs.”
While Manpower Inc. narrowed its own jobs mismatch to skilled industrial workers, Narayana Kocherlakota wasn’t as specific, though he did employ the catchy quote that the Fed “does not have the means to transform construction workers into manufacturing workers.” He said super-easy Fed interest rate policy had created conditions in which manufacturing plants want to hire new workers.
Among the broad categories Kocherlakota cited for the problem were geography, skills and demography. Back at Manpower Inc., the firm settled on skills and the dubious psychological space occupied by skilled blue-collar work in many developed nations, including the U.S.
“Inadequate training and negative sterotypes relating to skilled trades are further fueling a dangerous shortage of skilled workers,” said Manpower Chief Executive Jeffrey A. Joerres in a press release. “Employers and governments need to bring honor back to the skilled trades.”
If you accept these theses, the free market concept of supply and demand hits some bumps in the world of labor. If more people want to buy houses in Connecticut, the prices of houses in the state will go up. But if Connecticut employers need more machinists, they don’t appear to be packing up in Alabama or Texas and heading north.
Maybe they can’t sell their houses. Maybe they don’t want toleave their friends in Alabama. Or maybe, as the Manpower survey suggests, there aren’t enough skilled workers anywhere in the developed world because non-economic factors such as status has pushed more and more people towards white-collar work.
Or maybe the market hasn’t worked hard enough. If wages doubled for the skilled workers needed, reflecting their slim supply, somehow, one suspects, despite all the impediments, that supply would rapidly grow.
