Is it caused by the government?
Yes. Next question?
I think that she underestimates the effects of regulatory uncertainty and the war on business that started rhetorically in 2008, and for real in 2009. I also think that she’s missing another problem — the huge mismatch between skills and employers’ needs, which are themselves a result of terrible government education policies.
[Update early afternoon]
One other point. We also have a labor mobility problem, due to the housing crisis, in which many are still unable to sell their homes and move to where the jobs are. That too was caused by government policies.
One point not often discussed, at least I haven’t seen it mentioned: The excessive regulation of hiring and firing, particularly the latter, in some countries is one of the reasons for the creeping credentialism now infesting pretty well all industries.
As I see it, it goes like this: Government (and unions, particularly in government “service”) have made getting rid of useless employees that simply don’t cut the mustard impossible or close to it. As an aside, I strongly suspect that employees being diligent, responsible and good timekeepers until one day after the end of the statutory grace period (1 year in the UK IIRC) and then becoming unreliable, lazy and often late is a common phenomenon.
If it’s difficult to get rid of someone who turns out to be useless, then HR departments are going to be looking for some sort of guarantee that new hires will be able to do the job. And the easiest sort of guarantee is an official piece of paper. Or at least, it’s the easiest way for HR bureaucrats to justify their hiring choices.
the huge mismatch between skills and employers’ needs
If that were a big part of the problem we’d see high demand and rising wages for workers with the needed skills. We don’t.
If that were a big part of the problem
weI’d see high demand and rising wages for workers with the needed skills.WeI don’t.FTFY. Apparently you blind yourself to such things.
If you have evidence of quickly rising wages for workers with certain skills, by all means share it. It would be quite a coincidence if this skill/worker mismatch just happened to surface at the same time that the world was going through a deep recession.
Will you take NPR’s word for it?
The expert quoted by NPR doesn’t say that skills mismatch is a “huge” factor in today’s unemployment problem; the number cited 2 million unfilled jobs, vs. over 20 million people who need jobs. Nor does he point to spiking wages for those job categories, which is what you’d expect if there was a new skill mismatch. He seems mostly interested in the picture going forward: that as the baby boomer generation of manufacturing workers retire, employers will struggle to find replacements. But that isn’t a new story, or the reason for today’s unemployment rate.
For more, see this from the Atlanta Fed. E.g.:
Check the starting salary for a worker in the oil fields out West.
Also, most engineers I know got a job out of college at fairly good wages.
That’s a great example that makes my point. Oil worker wages aren’t rising because schools stopped generating workers with the right skills, they are rising because there is new demand for those workers, in the form of thousands of new oil wells. If other sectors of the economy were seeing rising demand, they’d have no trouble finding and/or training workers with the skills they need.
they are rising because there is new demand for those workers, in the form of thousands of new oil wells.
V-man mentioned engineers. You won’t find a roughneck, workers who work on wells, confusing themselves as engineers.
There’s no evidence that engineer salaries (unlike oil worker salaries) are rising ahead of inflation. Engineers have been getting good salaries all along.
There’s no evidence that engineer salaries (unlike oil worker salaries) are rising ahead of inflation.
As Rand noted, that’s a personal observation of yours.
My personal observation is a nearly 2x rise over inflation. But then I live in a state that doesn’t shun engineering industries such as oil and defense while also embracing alternate energy.
Perhaps if the federal government and other states (California, Illinois, Michigan all deep blue with +9% unemployment) weren’t as hostile to business, they’d have 6% unemployment as well.
A couple years ago, when I worked in computer graphics, I went to a local conference to network with people from Europe. I asked a gentleman from France why he came all the way to North America to contract out some work. He said that he has four employees in his studio, two of which did absolutely nothing. His lawyer estimated that it would take a year or two to get rid of them, during which both the workers and the lawyer would have to be paid. It was cheaper (and safer) to outsource, rather than hire additional staff.
Other anecdote: a friend of mine has been living and working in Europe for years, under contract. It’s not that the company which employs him can’t find qualified local workers; it’s just that, as a foreign worker, he can be let go easily if work dries up, he works hard, and he doesn’t have any entitled attitude.
Now the same thing is coming to North America. And not just in the workplace. Take rentals, for example. You’d have to be crazy to be a landlord these days. By the time you manage to get the non-payer evicted, his lease would have been up. Basically, you housed him for free, not being allowed to seek out another, more solvable, renter.
The renter situation in the US is nothing new–my parents had some tenants who stopped paying rent in August and couldn’t be evicted until May (you have to give them a few months leeway, and you can’t evict them in Winter because that would cause a hardship). The tenants trashed the place before they left (changed their motorcycle oil on the LR carpet, among other things). This was decades back.
Sorta on topic: CinemaCon: Theater Owners Begin Cutting Employee Work Hours To Avoid Paying For Health Care
My last two clients were hiring recent graduates from good, not exceptional, 4 year engineering programs, at a rate of only about $15/hr. Not one of the ones I knew had less than $100K of student loan debt. The kids knew very little, with most of the ones I worked with having had one semester of CAD training. The companies threw these kids into the deep end of the pool, so to speak, and kept a few old timers around to guide them(at much higher rates). Now, with the economy still in depression, more companies are just getting rid of the older workers, no matter how productive we are. The mantra is to cut the rates; nevermind the quality of the work. The mentality is one of “We’ll fix it eventually, but for now, let it go as is.” And put off the day of reckoning until someone else inherits the mess, or the end customer stops sending out checks.
At a growing number of companies, the HR department runs the show. On my last assignment, the engineering manager had no input as to whether I was retained or not; he was not notified as to what my last day of work would be and had to get the info from my agency. Too bad about his department’s schedule and workload; HR made the decisions.
As a 56 year mechanical designer/checker, who has been contracting for almost 20 years(and would love to get a direct job), the employment outlook is terrifying. Never mind what you know, your experience, your ability to get the work out on time, the quality of said work, your work ethic. “We can only pay you about $25,000 per year, with no benefits.”