The Fast Forward bill and Wisconsin’s skills gap

Here’s the bill, and I believe this is what passed and was signed by the Governor yesterday.

I am really frustrated by the lack of detail in the average media report these days. I had to search for details. Really? What happened to the key points of who, what, when, where, and why. They seem to have been tossed for political opinion.

For example, I wanted to know how these grants would be awarded. Would a student be able to apply for help with training? No. Another article from the BizTimes had to be found for those details.

Worker Training Grants – Funds $15 million over the biennium for Department of Workforce Development grants to both public and private organizations, such as technical colleges, Workforce Investment Boards, regional economic development organizations, and Wisconsin businesses, providing training to new and incumbent workers. The matching grants ensure businesses, as well as the state, are invested in the outcome of the worker training programs funded, Walker said.

Creates the Office of Skills Development – The bill funds four full-time positions to administer the worker training grants. With the Wisconsin Economic Development Corporation, the Technical College System, economic development agencies and businesses, the office will adjust training grants to current and changing workers’ skill needs and emerging skill clusters, providing workers with a responsive, flexible, and valuable training resource.

Creates the Labor Market Information System – The bill develops a state-of-the-art system through the DWD to track job vacancies and link unemployed workers to openings they are qualified to fill or to training they can complete to become qualified, helping the unemployed return to the workforce faster.

Oh look! Fifteen million over two years and the only real jobs to come from it are four new bureaucrats. A bigger Wisconsin government. Just what we all wanted.

I’m not against jobs. I’m against bureaucracy pretending it creates jobs. The cleanest way for this kind of job training to happen would have allowed an individual interested in acquiring a new skill go to a company, be cleared by that company for employment when skills are learned, and then the money travel with the student. It is the individual who needs employment, not the government.

I think that’s why most jobs initiatives lack luster. They focus of the funding is on the bureaucracy, not the outcome.

And despite the bi-partisan support for this bill – the Assembly voted for it 94 to 4 – there are some who demand there is no skills gap.

From the AFL-CIO quoting Marc Levine from UW-Milwaukee:

The consensus among top economists is that the skills gap is a myth. High unemployment is mainly the result of a deficiency in aggregate demand and slow economic growth, not because workers lack the right education or skills. The skills of the labor force did not suddenly erode between 2007 and 2009, when the unemployment rate more than doubled, so it makes no sense to claim that high unemployment in 2009 and through today has been caused by a soaring number of “unqualified” workers.

Most tellingly, more than three years after the official end of the Great Recession, there remain over three times as many unemployed workers as job openings in the U.S. Even if every unemployed person were perfectly matched to existing jobs, more than two-thirds of all jobless [workers] would still be out of work.

Specifically for Wisconsin, Levine continues:

Beyond the anecdotes of local employers, the Wisconsin and Milwaukee labor markets show no statistical evidence of a skills shortage:

• Wages: If Wisconsin employers were encountering a shortage of skilled labor, wages would be going up, but in Wisconsin real wages have declined since 2000. By contrast, in states such as North Dakota and Wyoming, where there really is demand for and a shortage of skilled labor, caused by a boom in the energy
sector, real wages have jumped by double digits since 2000. Wisconsin wage “growth” also lags the national rate, another sign that there is no labor shortage here.

When I think it through, what I read between the lines is that there are skilled workers available, but they are too expensive for the current Wisconsin employment market. The market is putting pressure on these employees to lower their demand for wages, and they don’t want to do so. That’s why the union is involved.

The unions also continue to put upward pressure on wages for unskilled labor in tandem. The mismatch in skills relative to wages is creating the unemployment, not the lack in skilled workers. As a friend pointed out, IT professionals are doing well. They are mostly without union representation.

As always, I’ll be really curious as to who gets those four full-time government jobs. I’d bet the total cost for those are close to a million a year. (Cost. Not salary.) Efficacy counts. Think about the rousing success of Obama’s Job Council.

It’s likely Governor Scott Walker could have made more impact on this matter by championing Right to Work legislation than tossing $15 million around for the next two years.

Here is the link to Marc Levine’s whitepaper on the subject of a skills gap. I’m going to read it thoroughly to see what I can glean for my own college student. I suspect it’s not the last time I’ll be mentioning his work.

—Update—

See also Uppity Wisconsin’s take on the subject and Bruce Murphy from Urban Milwaukee. It appears we agree on the problem although we disagree on the solution.

Comments

  1. Anonymous says:

    The UW Milwaukee study is an academic study that does not include any discussion with Wisconsin manufacturers. Read the WMC rebuttal in Business Journal for reality.

  2. You have a link for that Anon?

  3. I’ll look into it, but I thought the study was a very thorough effort. “Discussion” with Wisconsin manufacturers was included through newspaper quotes.

    Who’s “WMC?”

    And ding ding ding. Here’s the answer to everyone’s questions. Walker’s $15 million over two years is funding union busting, and all but four Democrats in the Assembly approved it.

  4. Scott Berg says:

    WMC = Wisconsin Manufacturers & Commerce see: http://www.wmc.org/

    The rebuttal referenced appears at (note it’s Biz Times, not the Milwaukee Business Journal): http://www.biztimes.com/article/20130304/BLOGS/130309946/-1/milwaukee_blog/Skills-gap-exists-in-the-real-world

    Cindy, champion of the free market, no government is good government, person that you are, please explain why these state manufacturing companies expect public agencies like MATC to be training people and state taxpayers to be paying for (at least some) of it? Isn’t that very 47% of them?

    And isn’t the free market supposed to detect these unfilled product (manufacturing education) niches and create a solution using private money?

    It would seem minimal government is supported only on the taxing side, not on the benefits side, even for private industry. It makes it very hard to be a good Republican.

  5. Thanks for the opinion link, Scott. I dug around and couldn’t find it last night.

    I don’t think I ever said it was good. I said it was happening. I’m sorry if I left an improper impression.

    There’s a lot to dig into next week. It’s all unfolding in such a way that no one hopes it to be recognized. You are welcome to explain it all while I’m away, but I’ve a basketball game to watch and company coming for dinner, so Tuesday is the best I can promise as it will likely take me tomorrow to get through the research.

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