In part 1 and part 2 of Help Wanted, we referenced an industry skills gap several times. This skills gap refers to the many job vacancies that are going unfilled despite large numbers of unemployed welders because job candidates lack the specific skills or certifications that employers need. Across the country, employers have been extremely vocal about their inability to properly replace a retiring older work force. The impact of the budding skills gap is undeniable.
So why is the very existence of the skills gap in question?
Unexpected as this may sound, it’s true. The existence of the gap is being refuted by a number of sources, both on a national and local level. In April, Inc. Magazine reported that according to four regional branches of the Federal Reserve and former chairman Ben Bernanke “current skills mismatches are limited” and the gaps that are present can be attributed to the usual ebb and flow of the economy.
The reality of a skills gap by definition depends on whether there is actually a demand for a particular skill. As a result, they tend to be regional, based on the needs of local industries, and heavily influenced by the resources of employers in the area. Most notably for skilled workers, an actual skills gap is typically accompanied by a wage increase for those who possess skills that are in demand. Basic economics dictates that as the demand for skills increases, individuals who possess skills can charge more for their services.
According to reports from the University of Wisconsin in locations where actual skills gaps can be identified, wages and hours have increased in order to attract necessary workers. North Dakota and Wyoming, for example, showed wage increases of over 20 percent since 2000 (a summary of the report can be found here and a follow up here). The rest of the country, however, has stayed well within the range of normal.
A study of the skills gap by Boston Consulting Group reported similar findings, stating that the percentage of unfilled and high-skill jobs are within the historical ebb and flow of industry within the last 20 years. The reason there’s confusion about the presence of the skills gap in the media is that the skills gap exists, but only on a regional level; not a national one.
“The skilled-worker shortages that exist in the U.S. are localized. Only 5 of the nation’s 50 largest manufacturing centers—Baton Rouge, Louisiana; Charlotte, North Carolina; Miami, Florida; San Antonio, Texas; and Wichita, Kansas—appear to have significant or severe skills gaps. Ninety percent of the biggest manufacturing areas do not show evidence of significant manufacturing-skills shortages,” the BCG report reads.
So when a media outlet reports there isn’t a national skills shortage, they’re technically correct.
However, a national gap is beginning to form and may be in full swing by 2020. According to BCG “severe shortages of highly skilled manufacturing professionals could develop into a national problem during this decade as U.S. manufacturing output expands and today’s experienced machinists, engineers, CNC operators, and other skilled workers move into retirement.” And according to Inc. Magazine welding is among the industries whose futures are most threatened.
Despite the absence of a current national threat, regional problems are still intense enough to create the sense of a national crisis already underway. When enough smaller organizations are reporting the same immediate labor problems, even if their specific causes are isolated, those patterns make the news. This news has mixed with reports of the looming and related future threat of a national gap.
The mixture of current regional problems with fears of an oncoming skills gap that must be prevented creates a “perceived national shortage”; an impression that the gap is already happening nationwide.
The important things to remember are that a national gap is a very real possibility that must be prevented, and the local gaps shouldn’t be ignored as many of their causes are symptomatic of the problems to come.
Next week we’ll be breaking down the factors that have led to local skills gaps and a perceived national shortage that is on its way to becoming a reality. Then we’ll shift gears to look at what traits employees are seeking and can lend competitive edge to welders looking for work in the current climate. Finally, we’ll return to the topic of the skills gap and look into ways that the national gap can be curved before it’s fully formed.
In the meantime, we invite you to visit American Welding Online, where you can learn more about the state of the industry, and ways to advance your career through our blogs, podcasts, online courses and other resources.