But a newUW-Milwaukee analysis of the local labor market casts doubt on the argumentthat the city lacks skilled workers equipped for the challenges of the 21stcentury economy. What the city lacks, instead, are enough high-paying jobs toemploy its educated workforce.
That jobs-gap argumentcontradicts conventional wisdom promoted by local business leaders, includingformer Bucyrus International CEO Tim Sullivan, who say the city’s workers don’thave the right skills for the jobs that are available and employers have nochoice but to launch or expand their businesses in other states—orcountries—where workers have the right skills to match their needs.
The skills-gapargument is so powerful that job-training programs have been altered and Gov.Scott Walker has included almost $30 million in his proposed budget forprograms to close the gap. In addition, Walker wants a separate piece oflegislation to include another $15 million for worker training grants as wellas to create a Labor Market Information System to track job vacancies and link unemployedworkers to job openings.
On the surface,Walker’s support for enhanced job training programs seems like a positive stepto close the skills gap and meet employers’ needs.
But doesWisconsin—and its major city, Milwaukee—actually have a skills gap?
Levine: AJobs Gap, Not a Skills Gap
Marc Levine of theUW-Milwaukee Center for Economic Development says the skills gap is a myth—aconvenient myth for employers who want the government to pay for trainingprograms but don’t want to pay the higher wages that would attract workers totheir hard-to-fill jobs.
In his just-releasedreport, The Skills Gap and Unemploymentin Wisconsin: Separating Fact from Fiction, Levine found that there’s noevidence of a skilled labor shortage locally or nationally.
If there were askilled labor shortage, Levine wrote, wages would rise and employers would addhours to the workweek. Instead, wages and hours worked have been decliningsince 2000, including those of highly skilled workers.
In fact, Levine foundthat Milwaukee doesn’t suffer from a skills gap but from a jobs gap, sinceworkers are likely to be overqualified and underpaid for the jobs that areavailable now and those that will be created in the future.
An estimated 70% ofprojected job openings through 2020 are for positions requiring a high schooldiploma or less, Levine found. Those in-demand jobs include retail salesperson,home health aide, office clerk, food prep and servers, cashiers, janitors andlaborers. In comparison, the highly skilled jobs mentioned by skills-gappromoters like Sullivan comprise a far smaller segment of the labor market. Andthese highly skilled and in-demand workers aren’t seeing their wages increase,Levine found, as they should if there were a local labor shortage.
“When we look atthe data, we find the educational attainment of the labor force is increasingand the number of skilled workers is increasing,” Levine said in an interviewwith the Shepherd last week. “Theproblem is we don’t have enough jobs.”
Levine said thehigh unemployment rate couldn’t be attributed to skill-lacking workers, sincethese workers were employed just before the Great Recession and had enoughskills to satisfy employers as recently as one or two years ago.
Instead, Levineargued that employers are hiring in low-wage areas, such as Texas or Mexico,where workers are less skilled simply to save money.
He noted thatBucyrus’ Sullivan generated headlines in 2008 when he complained of a shortageof skilled welders in Milwaukee. Bucyrus then set up a new factory in Kilgore,Texas, where welders are less skilled and earn less than they do in Milwaukee.
“If you just lookat the data of the two places and ask which one is likelier to have a skillsshortage, it’s going to be Texas,” Levine said.
Bucyrus also receivedstate subsidies for setting up its plant and training workers in Kilgore.
John Dipko,communications director for the state Department of Workforce Development(DWD), wrote in an email to the Shepherdthat other reports, including one written by Tim Sullivan, document a skillsgap problem in some occupations, such as CNC machinists. Dipko said the DWD’sfocus “is not on debating whether a skills gap exists, but what we can do toequip workers with the skills they need to find jobs in the modern workforce.”
