The Real Cause of the Skills Gap?


Many causes have been suggested for the Skills Gap — the lack of qualified technical workers in manufacturing.

Offshoring caused Americans to see manufacturing jobs as unreliable, some say. Schools dropped the ball, other say, and recent grads don’t have the STEM training to be able to do the jobs. Rexroth is investing heavily in partnerships with education, since some claim that a lack of training and awareness is the problem.

But Industry Week has another suggestion: U.S. factories may be reshoring, but they’re not willing to pay competitive rates. “A new report showed 29% of small businesses said they had job openings they were unable to fill, and 15% of owners said that finding quality labor was their single most-important business problem,” said the article, “but only 14% will hike pay.”

The report in question is the June NFIB Small Business Optimism report, but it doesn’t sound that optimistic. June saw an increase of 287,000 jobs, but half of small businesses complained that they had job openings they were unable to fill.

One reason may be that the factories have come back to the U.S. but don’t want to pay U. S. prices.

Politically-charged talk about the U.S. economy may have disguised the fact that the nation is nearing full employment: most people who want to work are already working. That means that employers may need to step up wages in order to compete.

This report clashes with earlier claims that the U.S. may have plenty of jobs but most of those jobs are low-paying service-sector jobs. Wages aren’t rising the way they usually do in times of full employment, and there is a strong perception that income inequality is a significant issue.

If these theories are right, all manufacturers have to do is to raise wages and watch better candidates come through the door. Combining that step with government/industry/education training partnerships could be the winning strategy.

Many employers seem to be turning to automation instead.


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