Re-Thinking the “Skills Gap” in California

Michael Bernick
Former California Employment Development Department Director & Milken Institute Fellow

In California workforce circles,  a main 2013 meme regards the “skills gap”, by which tens of thousands or more of skilled jobs are going unfilled in California, even as our employment rate is 9.8%.

Local and firm-based skills gaps are present in California, presenting targeted opportunities for our local Workforce Investment Boards (WIBs)  and community colleges.  However, we need to approach broad “skills gap” claims in California cautiously, since in a good number of cases they will turn out to be mirages.

Screen shot 2013-03-28 at 7.06.37 AMLet’s take the case of “advanced manufacturing”, one of the industries targeted by many local WIBs and community colleges in 2013. The emerging computer-driven manufacturing requires manufacturing workers to now master computer operation skills. The advanced manufacturing worker is a mix of machinist and computer programmer. The job requires knowledge not only of cutting metal but also writing code for a machine to cut metal.  It requires knowledge of  metallurgy, physics and computer code. The job should be a good fit in decent pay and mobility potential particularly for California workers without college degrees.

However, closer examination suggests, first, that the number of these advanced manufacturing jobs might be more limited than suggested by the “skills gap” meme. As the chair of our California state WIB, Michael Rossi, has noted, advanced manufacturing by its nature involves a substitution of computerized equipment for workers. In the advanced manufacturing plant, one worker with the computerized equipment can do the work previously done by multiple workers.

Second, the pay levels of advanced manufacturing jobs are not consistently high. New York Times reporter Adam Davidson interviews advanced manufacturing trainers and employers and finds pay rates starting as low as $10 ($15 with an AA degree), for jobs that require operating sophisticated machinery. A similar finding of a wage shortage, rather than skills shortage,  comes from a Boston Consulting Group report issued in October of 2012, “Made in America, Again: Understand the U.S. Manufacturing Skills Gap and How to Close It.”

Third, most job openings in advanced manufacturing in California are receiving tens of applicants if not more. These applicants have AA degrees and college degrees. The “skills gap” in these jobs is mainly linked to employers requiring workers to have highly tailored skills and experience.

Advanced manufacturing is a promising area of training for WIBs and community colleges in 2013, as it is focused on specific firm openings, with customized or on-the-job training, and a commitment to hire. To a wider extent, manufacturing is a promising field for training in California in the years ahead, given the age of our manufacturing workforce, and the looming numbers of retirements. But we should not think there are tens of thousands of jobs going unfilled in 2013, in advanced manufacturing or other industries, or that lack of training is the only factor, or even the main factor in many cases.

On the wall of my office is the photo (above) of a line of workers demonstrating in front of EDD headquarters, sometime in the early 1960s. Former EDD associate director Michael Krisman found this photo in the EDD archive. The worker near the front is carrying a sign reading, “Not a Labor Shortage, a Wage Shortage”.  Some things never change.

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