In last weekend’s New York Times Magazine, Adam Davidson had a nice article debunking the so-called skills gap in manufacturing. He noted that manufacturers constantly complain about not being able to hire skilled workers – yet they offer starting pay as low as $10 per hour.
One manufacturer Davidson spoke with stated that workers with an associate degree can make $15 per hour in his factory. Yet, as Davidson noted “a new shift manager at a nearby McDonald’s can earn around $14 an hour.” The problem is not lack of skilled workers, but that manufacturers are offering wages too low to attract skilled workers.
Some employers are willing to train but even they are facing a deficit in basic math and science skills, which are increasingly important for modern, computer-based manufacturing. Davidson closes by suggesting that “so-called skills gap is really a gap in education, and that affects all of us.”
While it may be true there is a general education deficit in the US, this barely scratches this surface of a deeper problem facing postindustrial economies: what kinds of jobs are replacing formerly-well paying manufacturing jobs as these are outsourced to low-wage countries and lost to advancing technologies?
Many still hold fast to the expectation that the postindustrial economy will increasingly consist of highly-skilled professionals, as Daniel Bell predicted in 1976 in his The Coming of Post-Industrial Society.
Likewise, onetime Marxist turned global consultant Richard Florida has hailed The Rise of the Creative Class. His estimate that so-called creatives – scientists, engineers, IT workers – make up about 40% of the US workforce is consistent with my own analysis of Census data.
But what about the remaining 60%?
My analysis of Census data shows that workers in what I call “low-autonomy” jobs make up fully 35% of the workforce. The bulk of these low-autonomy, low-skill jobs are clerks and cashiers, cooks, nursing aides, janitors, and assemblers and machine operators.
The remaining 25% of the workforce are in “semiautonomous” jobs, primarily sales workers, secretaries, primary and secondary school teachers, and skilled production workers.
To a large extent, then, good manufacturing jobs are being replaced with bad jobs at places like Wal-Mart and McDonalds.
In 1955 the top 10 largest employers were GM, Exxon Mobil, US Steel, GE, Chrysler, Amoco, CBS, AT&T, Goodyear and Firestone. Nine of ten were manufacturers. In 2011 the top ten were Wal-Mart, UPS, McDonalds, IBM, Yum! Brands (Taco Bell, KFC, Pizza Hut), Target, Kroger, HP, Home Depot and PepsiCo. That is, one manufacturer, three general merchandisers and three restaurant companies.
A critical problem with this employment structure is that these consumer service companies generally have a small number of very short promotion ladders. Additionally, under intensive competitive pressure and the dominance of the shareholder value model of corporate governance there is extreme downward pressure on wages, particularly in the context of high unemployment.
In sum, fully one-third of the US economy consists of low-skill, low-autonomy, dead-end jobs. This is a problem that increases in education and skill levels simply cannot fix.