FROM a recent BDN piece (my emphasis):
UMaine President Sue Hunter, who was appointed in June, spoke recently with the Bangor Daily News about her goals, the challenges the university faces and the role the university should play in the state’s economic future.
. . .
A part of it is when you look at educational attainment in New England … the rate of high school diploma earning in Maine is one of the highest in the country. We’re right up there with the top states. But then when you look at the associate degrees, bachelor’s degrees or graduate degrees, we are much lower. And even more significantly, we are much lower than the rest of New England.
When you look at economic development, the infusion of capital, influx of business, development of new business, it requires an educated workforce. It’s not that we don’t have good people, but they don’t have the skill set. And when you look around, you realize that the rest of New England is far ahead of us in those educational attainment metrics. That to me is important.
Reading that two things jumped out at me. First, she suggests that Maine’s workforce does not have the educational attainment necessary to meet the demands of the state’s employers. Granting that assumption for the sake of argument, but then what does the supply of degree holders in the five other New England states have to do with the demands of Maine employers? In short; nothing.
Second, and more importantly, is the continued assertion that Maine’s workforce lacks the requisite skills demanded by employers–yes, I am harping on the skills gap again. Despite little evidence in the data to support the skills gap argument, policymakers, pundits, and others continue to state that Maine’s (and the nation’s) workforce is under-educated/skilled/etc.
On the national level, employers in industries claiming to have insufficient skilled workers have been criticized for cutting training programs and in turn look to recruit experienced workers. For instance, from a 2013 PPH piece:
Ann Marie Martin, the new head of Idexx recruitment, said the challenge in Maine lies in filling technology positions, software engineers and developers. She estimated that the company has 15 job openings just in those fields, some of which have been vacant for more than a year.
Martin said Idexx doesn’t hire many people straight out of college. It’s looking for highly skilled, experienced workers and tends to recruit “passive candidates,” people working elsewhere and not necessarily hunting for another job.
One reason for the decline in training programs is that it is more economic for a business to ‘poach’ employees from other businesses. Rather than absorb the costs to develop a workforce, businesses can simply hire workers away from competitors that have made those investments. (There are other arguments about businesses lacking an interest in workforce development.)
Moreover, U.S. businesses have not taken advantage of the apprentice programs set-up to address the so-called skills gap. From a recent WSJ piece:
The Obama administration and governors from Michigan to North Carolina have a solution for some of the U.S. manufacturing sector’s woes: German-style apprenticeship programs.
But their success is proving to be unusually one-sided, mostly drawing firms based in Germany and other non-U.S. countries. In North Carolina, “Apprenticeship 2000,” a program combining classroom work and on-the-job training, has drawn numerous German companies but so far only two U.S. firms, Ameritech Die & Mold Inc. and Timken Co.
In Michigan, where Republican Gov. Rick Snyder promised last year to “Americanize” the German model in his state, almost three-fourths of the participants are firms based overseas, mostly in Germany.
So why wouldn’t businesses claiming a skills gap take advantage of these programs? There’s more than one answer, but one reason might be that with the U.S. labor market still soft, and unemployment rates up across the education spectrum, firms can continue to be selective in there hiring; at least that’s what a recent report from Burning Glass suggests. The key findings from the report (my emphasis):
- Employers now require bachelor’s degrees for a wide range of jobs, but the shift has been dramatic for some of the occupations historically dominated by workers without a college degree. The credential gap can amount to 25 percentage points or more for middle skill jobs in some occupational families, like Office and Administrative and Business and Financial Operations. For example, 65% of postings for Executive Secretaries and Executive Assistants now call for a bachelor’s degree. Only 19% of those currently employed in these roles have a B.A.
- In some roles, employers prefer bachelor’s credentials even when that makes the position harder to fill. For example, Construction Supervisor positions that require a B.A. take 61 days to fill on average, compared to 28 days for postings that don’t require a bachelor’s degree.
- In other occupations, such as entry level IT help desk positions, the skill sets indicated in job postings don’t include skills typically taught at the bachelor’s level, and there is little difference in skill requirements for jobs requiring a college degree from those that do not. Yet the preference for a bachelor’s degree has increased. This suggests that employers may be relying on a B.A. as a broad recruitment filter that may or may not correspond to specific capabilities needed to do the job.
- Jobs resist credential inflation when there are good alternatives for identifying skill proficiency. Many health care and engineering technician jobs, such as Respiratory Therapists, show little sign of upcredentialing. That is likely because those positions are governed by strict licensing or certification standards, well-developed training programs, or by measurable skill standards such that employers do not need to look at a college degree as a proxy for capability.
Is this phenomena occurring in Maine? We don’t have a similar report on the state’s labor market and hiring practices of businesses. We do know that the state’s workforce is far more educated than it was a decade ago but is underutilized.
Most importantly, we also know that wages are not spiking as would be indicative of a labor shortage. As one Maine legislator suggests, if you cannot attract or keep employees, perhaps the issue isn’t the workforce, and instead it’s your wages*.
* I disagree with her on the m/w issue, put her comments through the first 70 seconds of the clip vis-a-vis wages and workforce retention are dead on.