Does the skills gap exist? Paul Krugman says no, and Inc.’s Cait Murphy is skeptical, too. There’s no empirical data at the national level of an economy-wide mismatch between employers’ needs and people’s skills — unless you listen to businesses, as Peter Cappelli suggests.
Companies nonetheless have trouble “finding people for specific jobs in specific industries,” Murphy writes in the April issue of Inc. Magazine. Another way to put this: The skills gap is fundamentally a local or regional — and in some cases, industry-specific — problem.
It is not so much that the U.S. has a skills gap, but that there are specific issues in specific places: Wichita does not have enough mechanical drafters, Seattle enough computer systems designers, South Carolina enough nuclear engineers, or Brownsville, Texas, enough hydrocarbon mud loggers.
For companies that can’t find the workers they need, Murphy points to some sensible solutions: start training programs, pay competitive wages, and work with local government entities and community colleges. On that last point, she references two colleges that EMSI has had the privilege of working with for many years.
First, Murphy cites the innovative use of labor market data and business surveys exemplified by New York’s Monroe Community College. MCC has helped local manufacturers who can’t find machinists and others workers with specific skills by establishing an accelerated machining program. Todd Oldham and his team at MCC identified these skill gaps through intensive data research and surveying employers, a process that has garnered the praise of the White House and Vice President Joe Biden (see our updated case study on Monroe).
Murphy also wrote a smaller breakout piece called “How to Build a Skilled Workforce” that focuses exclusively on Walla Walla Community College and its highly regarded wine program. WWCC is a great example of an higher ed institution that has found success through industry-led, data-informed planning (watch our video with WWCC here).
The Decline in Apprenticeships and Where Community Colleges Fit in
Part of Murphy’s skills gap feature discusses the waning of employer apprenticeship programs. The U.S. had 200,000 fewer active registered apprentices in 2013 than in 2003. What’s more, a survey showed that out of 2,000 employers, 80% say they are concerned about a skills gap, but only 40% are doing something about it.
Still, small businesses to entire states (see Apprenticeship Carolina) are finding success with in-house training programs, despite the often-heavy associated costs and risks. Writes Murphy, “Small businesses may find such apprenticeship programs expensive. But all is not lost — if they work with local institutions, such as community colleges (see “Walla Walla,” above), and other businesses, including the competition.”
But it works the other way, too. Instead of waiting for businesses to take the initiative, community colleges and other regional educational institutions can take matters into their own hands to address what essentially are local training gaps. This is where Murphy references Monroe’s work in training machinists:
In upstate New York, the process worked in the other direction. Rochester’s Monroe Community College reached out to employers. MCC’s Economic Development and Innovative Workforce Services division created a database of 2,600 local businesses and does regular skill-assessment surveys, with an emphasis on defining clusters of “middle-skilled” jobs. Then MCC breaks down each cluster into specific occupations and evaluates demand versus supply.
MCC’s analysts found that the region was producing about 80 entry-level machinists a year, while there were 375 openings. So MCC created an accelerated program and is working with employers to finance an additional facility. “Industry has to recognize they have some of the responsibility for the educational mission,” says MCC’s Todd Oldham, who runs the economic development division.
You can find Murphy’s whole article here. For more on EMSI and addressing local skill gaps, see our article in Forbes and our briefing for JPMorgan Chase’s “New Skills at Work” initiative. Contact Josh Wright (email@example.com) for more information, and follow us on Twitter @DesktopEcon.