Friday Economic Updates
1. Talent Shortage -- "Employers say a talent shortage has saddled their efforts to fill jobs, according to a survey by ManpowerGroup. More than 50% of U.S. employers reported having difficulty filling "mission-critical" positions within their companies, up from 14% in 2010. Among the hardest positions to fill included jobs in skilled trades, sales and engineering."
2. Las Vegas Home Sales are the highest for the month of April since 2006.
3. Chile’s economy expanded at 9.8% in the first quarter - the most in 15 years - outpacing other major Latin American economies as consumer spending jumped and manufacturing recovered from the biggest earthquake in half a century.
4. New Jersey — Some $913.4 million in new state tax revenue has been collected or is expected to come in through next July, which offers a possible answer to some of the state’s immediate budget problems.
4. New Jersey — Some $913.4 million in new state tax revenue has been collected or is expected to come in through next July, which offers a possible answer to some of the state’s immediate budget problems.
18 Comments:
i think that talent shortage piece is very important.
it's a real problem and likely to drive more offshoring now that our visa programs are so limited.
this is bad for the economy. when you offshore, it's not just the engineers that go. it's clerical, office manager, custodial, mainteneace, it, and lots of other staff. thus, importing engineers may save numerous other us jobs.
it's also why i think that the "job opening" figures are not useful for predicting economic health.
an opening for which you cannot find a qualified candidate may well increase unemployment.
Teachers are ranked number 8 in jobs hardest to fill. Really? Schools are cutting teachers all over. Okay, maybe special ed, math, science teachers in some places.
Manpower is recommending that companies abandon the status quo and focus on hiring people who are a "teachable fit," meaning those with the right soft skills who can later be taught the technical skills needed to perform a job.
Just wonderful. How are companies expected to compete when they have to hire people not competent for the jobs that they are doing? And what happens when an individual with a newly acquired skill gets poached by another company? It looks to me as if a lot more jobs will have to move abroad.
Additional recommendations for employers include raising salaries, increasing benefits, offering a starting bonus, and providing training and development.
There go the profit margins.
Cash buyers in April paid a median $90,000 for a home in the Las Vegas area, up from $88,450 in March but down from $112,000 a year earlier.
Well, sooner or later there will have to be a bottom in the market and if one is old and sells a larger house in a better market it may make sense to go to live in a warm dry place like Vegas.
The state also faces a pending state decision by the state Supreme Court, which could order New Jersey to allocate up to $1.75 billion more on aid to local school districts.
More regime uncertainty? When will Americans figure out that the tyranny of corrupt judges needs to end and that a return to a limited government is the only thing that will save them?
Man, I love Chile. Such a validation of the Chicago and Austrian Schools. They get it.
Washington should take a field trip to Santiago and re-learn what the Chicago crowd taught them.
Man, I love Chile. Such a validation of the Chicago and Austrian Schools. They get it.
How much of their success is due to the Chicago and Austrian Schools and how much is due to a history (Santa María School massacre to Pinochet) of sending the army out to put down labor unrest?
When an employer says they have a talent shortage, what they really mean is either 1) they don't want to pay prevailing wages for a skilled position, or 2) they have so many job prerequisites that only 4 people in the world would qualify for the position.
I have never stepped into a new position knowing everything that that company wanted me to do -- I had to (quickly) learn some of the skills. Since I have a lot of experience and an extensive college background, this has never been an issue. But some companies expect their new-hires to know everything on day one. This is not reasonable for highly-complex positions; a smart person will learn the position quick enough. You would think that this is common sense, but surprisingly it is not common. Companies are willfully handcuffing themselves by taking such short-sighted positions, so I have no empathy for their perceived troubles finding talent. It may not be everywhere, but talent is not difficult to find if they spent more time looking for it and adjusting their requirements to the marketplace, instead of moaning about it.
Once upon a time part of running a company was predicting future man-power requirement and planning for them. Companies used things like pensions with an escalating benefit, pay raises, and other benefits to keep the people they already had and training programs designed to provide a pipeline of the skills needed. Today companies eliminate pensions, cut benefits, and wages and lay off assuming that when they need people they will be there. When that does not happen modern managers go running to big daddy government asking government to do the job for them. At taxpayer expense. Corporate welfare.
Like morganovich I think this poor management could drive additional offshoring. A recent segment on PSN Nightly Business Report featured an entrepreneur who had purchased a computer program written in an obscure language. After using it for some time he had a list of changes he wanted to make. The company he bought it from had gone out of business and when he tried to hire a programmer for what he considered a reasonable wage he found no takers. He said he may have to go to India. That remained me of a manager who rejected purchasing the best software offered to him in favor of software not so good because the best was in a language that was difficult to find experienced programmers to maintain.
There are people who fill that Las Vegas is the new Dethttp://www.marketwatch.com/story/las-vegas-looks-a-lot-like-the-new-detroit-2011-05-13?pagenumber=1roit.
From the Talent Shortage article:
"
As employers struggle to fill jobs, unhappy employees are looking to bail. About 84% of employees surveyed by Manpower reported looking for another job."
This is going to finally push up wages in general -> and the lagging CPI meter, starts to catch up with other inflation meters.
"When an employer says they have a talent shortage, what they really mean is either 1) they don't want to pay prevailing wages for a skilled position, or 2) they have so many job prerequisites that only 4 people in the world would qualify for the position."
this is pure nonsense. i have seen silicon valley companies offer top wages and equity packages be completely unable to find the staff they are looking for.
there is a serious shortage of engineers etc.
sure, you might be able to get one at $300k, but then you're looking at serious operating expense problems.
it's one thing to need to learn a new software package or some such, but to take a plumber and tun him into an electrical engineer is just not gonna happen.
this is a direct result of our draconian visa policy. we are forcing all the graduates of our engineering schools to go back to their native lands.
if too few people here have the skills, the companies will offshore to hire who they need.
off-shoring is expensive in terms of start up costs and the difficulty in having widely dispersed offices, but if that winds up being the way to get what you need, you do it.
and these engineering jobs take other jobs with them. finance, office management, IT, custodial, whatever. and, just to put the cherry on top of this sundae of government stupidity, it drops tax revenues and hurts the US economy too.
instead of living here, paying taxes here, and shopping here, they live in india and do all those things there.
there appears to be no limit to the populist impulse to shoot themselves in the foot.
Morganovich,
vanekl is correct. Employers have a vested interest in claiming they can not find the skills they need. If they shout shortage and back it up with bribes, I mean campaign contributions, they get to hire cheap foreign labor.
Economist and the Department of labor use different definitions of the word “shortage.” Employers are using the DOL definition. In economics a shortage is a situation where the quantity available or supplied in a market falls short of the quantity demanded or required at a given time or price. For the DOL a shortage occurs when the demand for workers is greater than the supply of workers who are available and willing to work at the prevailing market wage. Given a fuzzy definition of the “prevailing market wage” for all practical purposed the existence of a job opening proves a shortage.
There is a long history of these shortage forecasts covered by Michael Teitelbaum. The report is from 2002 and is a little old but see A history of gloomy forecasts.
For a more modern view see computer science Professor Norm Matloff’s Five-minute summary and the much longer Debunking the Myth of a Desperate Software Labor Shortage
Representative Dana Rohrabacher of California said the following during the October 3, 2000 debate in the House debate on the H1-B visa.
Mr. ROHRABACHER.
Mr. Speaker,
I rise in strong opposition to this legislation. This legislation is nothing more than a betrayal of American working people. Why should we bring in 240,000 foreigners in order to depress the wages in the United States of America ? That is exactly what we are talking about here.
NO SHORTAGE OF AMERICAN WORKERS
There are enough Americans to do these jobs. The only thing that is lacking is the pay levels and the training. So instead of requiring our companies to train people to do these high-tech jobs who are unemployed now, like laid-off aerospace industries, or to pay a little bit more money to attract our kids coming out of school, no, instead we are going to bring in 240,000 foreigners to keep wages low.
NOT A FREE ENTERPRISE SOLUTION
In times of prosperity if you believe in free enterprise, that is when wages are supposed to go up. But if we bring in 240,000 foreigners to take these good, high-paying tech jobs, those high-paying jobs which are now $60,000 that should go to 70 or $80,000 will stay at that level. What this bill does is, number one, betray our own people who are out of work who need that training, need those jobs, that are 50 years old; but the Bill Gates billionaires of the world would rather bring in foreigners and not have to pay for the training and not have to pay perhaps for the health benefits of someone who is a lot younger.
SHOULD NOT SUBSIDIZE BILLIONAIRE HIGH_TECH COMPANIES
We should not be subsidizing these billionaire high-tech companies and these billionaires who have made money up in the Silicon Valley .
INCENTIVE FOR YOUNG PEOPLE
They should pay their workers more money, they should train them and, yes, let us have an incentive for more of our young people to go into these high-tech companies and high-tech skill areas.
CONSEQUENCES OF LOW WAGES
If we keep wages low, our students are not going to be attracted to these hightech areas. But if we let wages increase as the market would suggest, we will have our students go in that direction to try to get those jobs.
BELIEVE IN THE FREE MARKET
For someone who believes in the market and supposedly the Republicans believe in the market, this bill is a betrayal of our principles but a betrayal of America's working people. Let us not bring in 240,000 foreigners to take jobs that could be done by Americans if they had the training and the pay levels to get those jobs.
Employers want younger employees who have never belonged to a union, which eliminates a large slice of genuine skilled trades workers.
A few years ago the National Association of Manufacturers ran a national program designed to recruit new manufacturing workers - from 18 to 34 years old only.
Valekl says it well.
"Let us not bring in 240,000 foreigners to take jobs that could be done by Americans if they had the training and the pay levels to get those jobs"...
Apparently to many Americans can't do the job...
The following ran in Dec. of last year's Tulsa World newspaper: Nearly 1 in 4 fails Army entrance exam
Apparently to many Americans can't do the job...
The following ran in Dec. of last year's Tulsa World newspaper: Nearly 1 in 4 fails Army entrance exam
The US education system sucks. While the universities turn out some great researchers many of them are foreigners who are not permitted to work without special visas. To overcome the problem many companies have opened up facilities in countries where it is far easier to hire these students. If a software company can't get visas for candidates in Seattle it is not too hard to move some of the operations to Vancouver where those candidates will find it far easier to work.
The US education system sucks.
No! It is really very good.
First, note all the people for whom it is in their best interest for you to believe it sucks. Educators see that perception as the key to more tax dollars for schools. Employers see that perception as the key to more cheap foreign labor. When they lay off Americans and replace them with H-1Bs they can claim that the poor education system made them do it. They are of course expecting that you will overlook the fact that the people they laid off had a good education.
Here is why it looks worse than it is.
Think back to the days when it was good. Then a man shows up at our school and says I am from the government and I am here to help you. I have this plan and if you implement it I will give you a lot of free money. The school administration says what do you mean free money. The man from the government who is here to help us says federal government money that you do not have to ask your taxpayers to approve. So they read the plan. The senior teachers say this is a bad plan. What we do under this plan is lower our standards and say to those who are about to drop out because they will not put in the effort to pass pretty please do not drop out. The school administration scowls what part of free money do you not understand? The plan is implemented.
With the plan to reduce the dropout rate in place when it is time to give students tests to see how well education is working in this country there are students taking the test who without the dropout plan would not have taken the test. What does this do to the average test scores? They go down. What does this do to the educational achievement of the rest of the student body? Nothing! The school is still producing the same number of well educated students it always did.
See Our Schools vs. Theirs: Averages That Hide The True Extremes
by David Berliner,
Michael Teitelbaum A Do we need more scientists?
And
Professor Norm Matloff’s Five-minute summary and the much longer Debunking the Myth of a Desperate Software Labor Shortage
What does this do to the average test scores? They go down. What does this do to the educational achievement of the rest of the student body? Nothing! The school is still producing the same number of well educated students it always did.
This is not true. When teachers have to waste time pandering to those students who do not belong, time is taken from those that do. The kids who do not care and do not belong also disrupt the teaching and poison the environment. It is not their fault because they are treated like prisoners and react in perfectly predictable ways because they are made to feel very inferior. Those same kids could become much more productive if they learned marketable skills outside of the public education system.
When teachers have to waste time pandering to those students who do not belong, time is taken from those that do. The kids who do not care and do not belong also disrupt the teaching and poison the environment.
I disagree. This was addressed in the Berliner article. Not all schools suffer from this problem as Berliner points out. The gross numbers bear this out. We are producing more STEM workers than we have jobs for and there is unemployment among STEM workers. A friend who is a Continental Airlines pilot went to Colorado for a ski vacation. Not having a car he took a taxi for local transportation. One of his taxi drivers had a bachelor of science in aeronautical engineering.
Besides, even in those schools that have a high number of students who do not belong, those kids at the high end of the spectrum, the ones who may go on to get STEM degrees, do not need much in the way of teacher time above and beyond the normal teaching that all kids get and do not suffer significant loss from less time.
"We are producing more STEM workers than we have jobs for and there is unemployment among STEM workers."
I understand your meaning here, but I might have worded it differently. WE are not producing STEM workers, they are producing themselves.
In my observation, the supply of STEM workers has almost always been out of phase with demand, both up and down. Somehow the signal that there are enough, doesn't reach those starting school until too late. Once the supply dwindles, the signal that more are needed will also be delayed until there is a shortage.
"...those kids at the high end of the spectrum, the ones who may go on to get STEM degrees, do not need much in the way of teacher time above and beyond the normal teaching that all kids get and do not suffer significant loss from less time."
I'm not sure I agree with this. You are assuming highly motivated kids. And, there's always NCLB to make sure they don't learn too much, too fast.
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