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Are low wages causing the skilled trades shortages?

The Grand Rapids Business Journal recently published an op-ed and comment that lays out the two most likely reasons for more demand by employers for skilled trades workers in manufacturing and construction than there are qualified applicants for those jobs. Which of the two explanations is accurate has profound implications for public policy, particularly for K-12 education.

The op-ed is written by Brad Laackman owner of Honor Construction in Grand Rapids. He makes the case for the position that we hear often from employers and their political allies that the prime cause for today’s youth not going into the skilled trades is that schools are organized to push all  kids to get a four year degree. Both in messaging––that you can’t do well economically without a four year degree–– and in curriculum––college prep rigorous academics for all.

The comment focuses on low pay as the prime cause of the shortage of skills tradesmen. The commenter writes:

Skilled trades at a journeyman or master level require the equivalent or more education, training, and skill of a bachelor’s or master’s degree, … Regardless of this, pay has decreased for trades over the past decade and trades are not competitive in the job market with low wages; therefore, the shortage and lack of talent or qualified construction workers and skilled trades will continue for years to come. Unless, the construction industry (particularly in West Michigan) raises wages dramatically to be competitive! Not just competitive with other trades, but other career paths that pay more and require less effort and skill.

Seems to me the basic question we should be asking is “is there a market failure that the laws of supply and demand all of a sudden don’t work in labor markets or is it employers not willing, for whatever reason, to raise wages?”

As we explored in a 2012 post, lots of economists, from the left and right, are skeptical of the skills shortage claims because they believe price (in this case wages) are what clears markets; brings supply and demand into balance. They observe that in many of the occupations where the contention is that demand is way stronger than supply, wages are either not going up or going up slowly.

The belief is employers are doing what is called rent seeking: trying to use their political power to get government to push kids into jobs with wages below what the market demands rather than raising wages.

Where we have ended up at Michigan Future is a belief that government should be occupation neutral. That K-12 education should be about expanding opportunities––not narrowing them––for all students. That the goal should be for all students to graduate from high school with all options on the table––pursuing a four year degree, going to community college or an occupational training program, going to work or the military or doing community services. That the choice should be the high school graduate’s, not some adult deciding that some kids have what it takes to succeed in college and others don’t have the ability to succeed in college so should be in vocational training rather than taking a rigorous academic curriculum.

Part of expanding opportunities is also geographic. That student’s K-12 education should not be organized to meet the labor market demands of employers in the community where the student is growing up. That we should want to give all Michigan students what most affluent parents are giving their children: the ability to pursue their dreams anyplace on the planet. We need to be clear that employers are NOT the customers of pre K-16 education.

As readers of this blog know, we believe that means a K-12 education designed––both curriculum and pedagogy––to build the 6Cs––communication, collaboration, content, critical thinking, creativity and confidence––in all students. To us these are the foundation skills needed for successful forty year careers no matter what path one chooses to take after high school.

The best way to build the 6Cs is through project based learning. Done right the projects can and should be designed so all students learn about the wide variety of jobs––those that can be done without post secondary training; those that require an associates degree; and those that require a bachelors degree or more. This career exploration, where all students learn about all job possibilities, should also include an exploration of compensation and security over a forty year career and how automation might effect each job. So that high school graduates can make more informed decisions on what path they want to pursue after high school.

 

 

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Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.

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