A skills gap? Try paying more

Manufacturers say they can’t find enough skilled workers for high-tech jobs, a “skills gap” touted by President Obama and challenger Mitt Romney.  So why not raise pay? Employers are offering $10 an hour to start — $15 with an associate degree — to people capable of running multi-million-dollar machinery.

Students at a Tucson community college can “sprint” to a two-year degree in one year. 

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  1. Mark Roulo says:

    Unless the employer is very profitable, going from $15/hour to $30/hour will turn profits into losses.

    Unless th $30/hour employees do twice as much work as the $15/hour employees.

    As a real example, IBM clears about $15B on about $100B a year in revenue. If salaries are about 70% of IBM’s costs, then the limit for IBM is giving out across the board raises of roughly 25%. After that, profits are zero.

    Even a 10% across the board raise would wipe out almost 1/2 of IBM’s profits.

    Companies are not run by people who willingly see profits collapse …

    • @Mark Ruolo: My wife and I are shareholders in IBM. Heres the link to IBM’s website, specifically to that page concerning executive compensation (link: http://www.ibm.com/investor/services/2011-proxy-summary-compensation-table.wss)
      The compensation for top executlives is quite generous. Why should such a disproportionate share of compensation go to those at the very top. Now IBM is very successful as a company, and it’s even less justifiable in companies that are NOT well run (such as Merrill Lynch/Bank of America, to name just one.)

  2. cranberry says:

    This is the most important bit in the article:

    “Isbister told me that he’s ready to offer training to high-school graduates, some of whom, he says, will eventually make good money. The problem, he finds, is that far too few graduate high school with the basic math and science skills that his company needs to compete.”

  3. Cranberry,

    Not really a surprise, since most high school and many college graduates math and writing skills are so atrocious that they’d have a hard time in most entry level positions.

  4. “Goldenberg’s intro class starts with the basics of how to use cutting tools to shape a raw piece of metal. Then the real work begins: students learn to write the computer code that tells a machine how to do it much faster.”

    These are two different positions. One is operating the CNC machine and the other is programming it. Some CNC shops expect CNC cutting files ready to go, while others will do various other levels that require more skills. At the lowest level, one needs to be able to set up the machine, load the material, and run the cutting program. Any reasonably bright person can be taught to do that. The next level up might require use of a computer program to nest parts before cutting. From which high schools do employers expect to find students with those skills? Still, this is something that can be taught to any decent high school graduate. The company will probably have to send the person to the CNC machine training course. Most do that anyway. This doesn’t require a whole lot of math.

    A next level would be if the CNC cutting company needs someone to create the geometry and convert it into files that can be read by the CNC or nesting software. These are NOT machinists. They probably work in a design office. These are CAD-like skills, and you can get those skills at many vocational schools and even at some high schools. Being a CAD jockey can pay well and provide a good career with good long-term demand.

    If there is not enough supply of these people, then the salaries will have to be higher. You can’t just say that schools are failing to provide enough raw people material. Maybe there is not enough exposure to high school kids about valuable career opportunities, but it almost sounds like companies expect find people to be ready-to-go at some low salary. I’ve heard people call CNC machines “money machines” because of the profit they generate. I’m completely unimpressed with complaints of a skills gap or a money issue. High tech manufacturing jobs/skills help a company make tons of money.

    “Running these machines requires a basic understanding of metallurgy, physics, chemistry, pneumatics, electrical wiring and computer code. It also requires a worker with the ability to figure out what’s going on when the machine isn’t working properly.”

    Baloney! They are way overestimating what it requires. When the machine isn’t working properly, call the service number. Metallurgy my foot. I had metal shop in eighth grade. How difficult is it to learn about plywood, aluminum, and steel?

    I’ll be the first to argue that schools could and should do a lot more. Schools should be about keeping individual career doors open. I know the problems with math in K-12. I can also argue that the math required for CAD work might be different than the math required for final CCSS high school approval, but you have to be very careful when you try to figure out where the knowledge and skill gap is located. Some companies don’t want to train because they will make that person more valuable and he/she will jump to another company for more pay. That’s how it goes, but companies have to pay more if supply doesn’t meet demand. They can’t just point to the schools and expect them to fix a problem that is not clearly defined.

    If companies complain that all they can find are people who are not even trainable, then I don’t buy it. Raise the salary offered, and these people will come out of the woodwork. That’s how it’s supposed to work. The people at our area technical/vocational school know what’s hot and what’s not. Perhaps they need to push this information down into the high schools a little bit better.

    • > This doesn’t require a whole lot of math.

      Balderdash. If Jony Ive has specified a 0.25mm chamfer around the edge of the new iPhone, how deeply must the CNC machine cut? CNC programming often involves trigonometry.

      As for metallurgy, I think you’re right – no one is designing an alloy here. Instead, think materials science. A CNC machine can be programmed to move slow or fast, depending on material, amount of material being cut, hardness, etc. Just off of the top of your head, what would be the difference in cutting rate between 6061 T6 aluminum and 254SMO stainless steel? Does the fact that aluminum will transfer heat away from the cutting head much more quickly than stainless steel will enter into the calculation? (Trick question: you are probably lubricating it constantly as it cuts).

      • “CNC programming often involves trigonometry.”

        CAD work and programming require more math. Operating the machine requires less. Using a program to do nesting and details of cut requires a knowledge of the CAM program. The article make no distinction between level and type of skills.

        The problem is that the term “skills” is not defined. There are math skills and there are job skills. The premise is that schools are not doing enough. I agree, but I disagree about the skills gap. It’s more like a money gap. I suppose you might also call it a gap between the general K-12 idea of college for everyone and a path towards good careers and jobs.

  5. Mike Curtis says:

    I think I get it now…if you need my skills to produce a product/service for profit, you need to pay me less than you charge. If you want to make more profit, you need to pay me less than I’m worth; or, sell your product at a higher price. Such is the fight between labor and management.

  6. Skills gaps exist and are getting worse. One way to curb emerging gaps is to invest in career and technical education (CTE) all all levels – post-secondary, secondary and others. CTE has proven to deliver significant ROI in terms of increased student achievement in traditional CTE fields and others, improved career prospects and earning potential, more community vitality and increased business production. With these benefits out there to be realized, CTE is surely worth investing in – and if businesses work with educators to devise and execute programming, they have an even better chance of success.

    The Industry Workforce Needs Council is a new group of businesses working together to spotlight skills gaps and advocate for CTE as a means of bridging them. For more information, or to join the effort, visit http://www.iwnc.org.

    Jason Sprenger, for the IWNC

  7. Deirdre Mundy says:

    Another unmentioned source of the ‘skills gap’ in many areas: Most manufacturers drug test. They can’t afford the injuries, damage to machines, and lost product. We frequently run into business owners who can’t find enough employees to expand, even with training, because they can’t find kids who can pass the drug test.

    The other issue is that a lot of manufacturers demand punctuality and regular attendance— two other ‘skills’ that are hard to find in a world that sends even mediocre students on to 4 year college. These jobs pay well IF YOU DON”T HAVE CRIPPLING STUDENT LOANS, but in a world where even C students get sent on to higher ed and grade inflation is rampant, the only kids looking for work right out of HS are those who were unable to hit ‘average’ in HS… hence the skills gap.

  8. Richard Aubrey says:

    There seems to be an unconscious–probably–belief that college students are the smartest, followed by CC students followed by HS grads who go to work, followed by dropouts. A single stack of intelligence where there are only two directions, up and down.
    Try matching wits with a HS grad skilled trades person in manufacturing. Or a mid-level noncom in the combat arms.
    Different intelligences are not indicative of more or less. Figure somebody with a social science degree from Enormous State University, maybe a 2.8 gpa. Just exactly how smart does he have to be? He’ll likely say it wasn’t a struggle, it was easy. And fun. Since many white collar jobs have their entry position as sales, maybe he’ll make it, but not because of a single thing he learned in class.