Permanent Underemployment?
The economy has been steadily recovering from the Great Recession. But the jobs may never come back.
The economy has been steadily recovering from the Great Recession. But the jobs may never come back.
WSJ (“College Grads May Be Stuck in Low-Skill Jobs“):
Underemployment—skilled workers doing jobs that don’t require their level of education—has been one of the hallmarks of the slow recovery. By some measures, nearly half of employed college graduates are in jobs that don’t traditionally require a college degree.
Economists have generally assumed the problem was temporary: As the economy improved, companies would need more highly educated employees. But in a paper released Monday by the National Bureau of Economic Research, a team of Canadian economists argues that the U.S. faces a longer-term problem.
They found that unlike the 1990s, when companies needed hundreds of thousands of skilled workers to develop, build and install high-tech systems—everything from corporate intranets to manufacturing robots—demand for such skills has fallen in recent years, even as young people continued to flock to programs that taught them.
“Once the robots are in place you still need some people, but you need a lot less than when you were putting in the robots,” said Paul Beaudry, an economist at the University of British Columbia in Vancouver and the paper’s lead author. New technologies may eventually revive demand for advanced skills, he added, but an economic recovery alone won’t be sufficient.
David Autor, an economist at the Massachusetts Institute of Technology who has studied issues of skills and education, called Mr. Beaudry’s thesis “provocative” but also “speculative.” There is no question, Mr. Autor said, that the wage premium enjoyed by college graduates hasn’t grown as quickly during the 2000s as in earlier decades. But whether that is the result of a glut of degree holders or some other explanation isn’t yet clear.
Here’s the accompanying chart:
Oddly, the full paper, “The Great Reversal in the Demand for Skill and Cognitive Tasks,” was released yesterday but only available for a $5 fee at NBER. Meanwhile, a PDF of what appears to be the same article by the same three researchers dated January 2013 is available for free at Beaudry’s website. I leave it up to the reader to choose.
If anything, the WSJ report grossly undersells the findings. From the conclusion of the latter:
[A] substantial disagreement exists about the causes behind the current low rate of employment in the US. Cyclical eff ects of the 2008 financial crisis likely play a role, and the structural decline in employment in routine occupations and manufacturing jobs are certainly contributing factors (Charles, Hurst, and Notowidigdo, 2012; Siu and Jaimovich, 2012). In this paper, we present theory and evidence suggesting that to understand the current low rates of employment in the US one needs to recognize the large reversal in the demand for skill and cognitive tasks that took place around the year 2000. In particular, we have argued that after two decades of growth in the demand for occupations high in cognitive tasks, the US economy reversed and experienced a decline in the demand for such skills. The demand for cognitive tasks was to a large extent the motor of the US labor market prior to 2000. Once this motor reversed, the employment rate in the US economy started to contract. As we have emphasized, while this demand for cognitive tasks directly eff ects mainly high skilled workers, we have provided evidence that it has indirectly aff ected lower skill workers by pushing them out of jobs that have been taken up by higher skilled worker displaced from cognitive occupations. This has resulted in high growth in employment in low skilled manual jobs with declining wages in those occupations, and has pushed many low skill individuals out of the labor market.
Emphases mine. The authors posit that, rather than unemployment and underemployment being a byproduct of the 2008 collapse, it was actually a major contributing factor. They test this with econometric analysis well beyond my training. The advantages of superior intelligence and higher education have continued, even expanded. But more and more of those people have moved into positions that previously didn’t require those advantages, displacing those who would otherwise have held those jobs.
Anecdotes not being data notwithstanding, my company cannot find enough deeply skilled technical workers, and H1B imports are not an option due to several factors. I have 7 openings right now for which I cannot find a soul who is both technical and can talk to human beings in an articulate and professional manner.
We have two, opposite, unemployment problems in this country, both highly impacted by a public school system that is far less rigorous than it needs to be.
The problem with the Y2K “brain drain” thesis is that even back then high tech jobs were but a small percentage of the total labor force. In Jan. 2000 payroll employment in “computer and data processing services” was 1.9 million. In Jan. 2008 payroll employment in the equivalent category was 1.4 million. The total payroll workforce in Jan. 2000 was 130 million and in Jan. 2008 it was 138 million. So there was not all that drastic of a change, either nominally or in percentage terms. The numbers are a little more dramatic for high tech manufacturing. In Jan. 2000 payroll employment for manufacturing of computer and electronic products was 2.7 million; in Jan. 2008 it was 1.3 million. But still it’s not as if back in the tech bubble that those jobs were even close to 5% of the total W-2 workforce. Or even 2.5%.
In any event, “permanent” is a rough concept, and maybe things can turn around, but, yeah, the labor markets in the U.S. are in a permanent decline. Bad education systems. Excessive regulations. Obamcare itself will cost untold numbers of jobs. A horrible tax structure. A horribly spoiled and lazy generation coming up through the ranks. A retarded political class. And this all is before the inevitable cycle of currency debasement, inflation and higher interest rates.
The prospects are bleak.
@Tony W: I second what Tony says. I’m an IT Director and I cannot get anything but H1B1 resumes for jobs that pay $90,000+ in the DC region. I am looking for a mid-level .Net developer for over 6 weeks now…working with 3 recruiting firms, posted it on Dice myself, and have it on our web-site. Not one qualified resume coming in, and this is mid-level. I have a few good H1B1 resumes but they want $100,000 or more for base salary and I need someone who I know will be here long term because our product is very technical. The US is really lacking in skills.
Personally, I think this is a problem created by our government. I wish there was some serious journalism going on about why India, China, Iran, and other countries are pumping out engineers like there is no tomorrow, then going to work for CSC, Raytheon, IBM, Cisco, Lochheed, etc. Don’t get me wrong, I love our melting pot but there is omething happening to the American system that is not working.
I wonder how many people going into college decided against going for a compsci major because they figured “eh, it’s all outsourced/H1B1’d nowadays anyway.”
I’m not in IT. But my wife is. There’s been a *lot* of outsourcing of development here. So we have folks in the US managing folks in India. There are some American technical people left, but a ton of them got let go years ago (*before* the Great Recession). I can’t quite recall the timing of the big layoffs… but I think 2004-2005 was one such period. Granted, there was a merger involved. But before and after the process continued.
And then I see posts here talking about companies can find qualified people. I can’t speak for the whole industry, but it seems to me that my own company simply got rid of hundreds of qualified people* because hiring Indian consultants was cheaper. What happened to those people? Perhaps, unable to find jobs in their fields, their skills eroded. What’s the shelf-life of web development skills? Some were perhaps old enough to ride off into the sunset. Others maybe ended up in non-IT jobs. I really don’t know.
* – If you got a resume from someone who did web development 5 years ago but has been out of work since (or doing other work since), would you hire them?
I think one of the issues is that at least some of our kids are making an effort/reward calculation – and it’s not coming up positive. We used to have a societal arrangement in this country that was much more worker friendly. Now teens have jobs in high school where they work with 35 year old grade-inflation, party-school college graduates at the fast-food restaurant – they must think to themselves “why would I take that route?”
HelloWorld! rightly points out a journalistic duty that is missing, but we are also missing a corporate recognition of stakeholders other than those who hold share of stock.
Communities, employees, vendors and customers are all important stakeholders that need as much attention as the precious investing class. In many ways this is a weakness of our capitalist system, and may call for limited government intervention to put the right incentives in place to assure all stakeholders are represented in the boardroom and executive suite.
@Rob in CT:
I would – maybe. Knowledge of current technology is great for the next six months, but after that I need to know that they can adapt and learn new technologies as they are developed. That is a much more important skill.
@Rob in CT: Would I hire someone who had web development 5 years ago? That is a tricky question. Today is all about Service Oriented Architecture. Technology changes fast. Why is it that all these H1B1 holders have all the latest certifications but Americans don’t? I know 10 years ago I used to get resumes from Ukranian Java developers in stacks. Today I get ETL resumes from India in stacks. There governments have sponsored schools that do nothing but pump out these types of workers.
Good to know, Tony. The reason I asked is this:
My wife. Compsi-Math double major from a good college, with good grades. Goes to work for this company as an intern before she graduates (she was working ~20 hrs/week, paid, while I was partying). Graduates, goes into the company’s IT leadership development program (4 years). Comes through that well. Gets a IT management job (system support mostly). Works there for… oh, 5 years. Then the department was going through some serious turmoil and she decided she needed to get out. She also decided that it would be smart to become more well-rounded, so she went into project management (the idea being, do this for a few years, get the PMP cert., and be able to say she’s not only a good IT manager but she’s also get PM experience). She worked as a PM for 5 years – a bit longer than I think she originally intended. When she went to make the jump back to an IT management position, she ran it a problem: there were plenty of other applicants who never took a 5-year detour into project management. Half the folks who intereviewed her said they might be interested in her as a PM (not what she wants) and the other half liked her well enough but this other applicant has more recent experience… yadda yadda.
Now part of the problem is that she’s only looking internally. But that’s both help and hinderance, so I’m not sure on balance it’s the problem. The problem seems to be a mindset that unless you were doing *this exact thing just a minute ago* you are an inferior candidate to someone who was. Also, plenty of applicants per job, so of course folks can be choosy.
[obviously, I’m not exactly an impartial observer here. Grain of salt, all that]
Hmm. Well, that might be your answer. Our government does not do this.
I, for one, would be fine with the government providing incentives to push people into particular high-demand fields (such as weighting grant and student loan money based on such considerations). Of course, there’s a certain element of trying to predict the future in play there.
@Tony W:
“We used to have a societal arrangement in this country that was much more worker friendly”
To say the least. I am checking in while on vacation (and unwilling to spend time searching for where I read it), but I read that in 2010, the upper 1% took 121% of that year’s increase to GDP. Or in other words, the lower 99% lost ground overall.
I’ve got jobs today I can’t fill fast enough.
Look…we are down 1.5M – 2M public sector jobs since the beginning of the Bush Contraction. Put those jobs back in the mix and the picture changes. Demand goes up. More jobs are created. Those additional jobs create more demand, which creates more jobs. Absent those 1.5M – 2M jobs it’s just going to take longer.
It doesn’t really take “econometric analysis” beyond your comprehension.
Part of the problem, I think, is that most workforce development programs are limited to non-degreed people. Someone with a BA in English who might also have the capacity to grasp .NET or LAMP or what have you won’t qualify for most programs even if he or she is underemployed. Which is a shame, since someone who possesses training in critical thinking and communication skills and who also grasps development environments is exactly the type of person Tony is looking for.
I have a BA in English and an MS in Accounting. I was lucky in that my ex-partner kept us afloat while I did my MS – I could not have afforded to do it otherwise, and probably would still be stuck processing death claims and sending overpayment recovery nastygrams to widows.
@Gromitt Gunn: Bah, hit submit too soon.
Both in my previous CPA gig – auditing investment management companies and funds – and in my current job – financial solvency regulation of life insurance companies & HMOs – my background in the liberal arts has been a huge boon. My work is better documented and easier to review than most of my peers, and I tend to have a higher capacity for gathering evidence and writing supportable conclusions in a time-efficient manner.
I see a three-fold situation here, as far as I can tell: One, we’ve got a lot of STEM types who lack training in effective communication and critical thinking. Two, we’ve got a lot of people with great training in writing and thinking who also have the capacity to learn accounting or engineering or software development or nursing, but in the exuberance of youth think getting a degree in *anything* is still the key to sucess.
Three, we’re saddling unneccessary student loan debt onto a whole bunch of people whose aptitudes are best suited for in-demand careers like electrical work, plumbing, auto mechanics, and culinary work that cannot be outsourced, by reducing high-school level vocational training and letting Kaplan and DeVry and their ilk get their grubby disgusting paws on them.
The WSJ ought to hire a graphics art designer, because that graph is terrible.
First, I think that social science grads misunderstand the STEM market and therefore tend to degrade it as a subset. Somehow petroleum engineers might be in high demand, and yet the problem is generalized to “half of graduates,” as if some half of petroleum engineers end up selling frocks at the local mall.
There is a filtering, but it isn’t as random as that. STEM is hard, and it will reward those who both work hard and have the capacity for it. People who aspire but lack capacity or don’t work at it quite so hard won’t do so well. (Presumably the Indian schools are filtering over 1B people to find those both smart and highly motivated.)
STEM jobs are not “degree and done” education. They demand life-long learning.
Finally, the best way to demonstrate STEM still is to directly demonstrate the skill. Do a resume project. I know circuit designers who design custom circuits as business cards. It would possible for a .net aspirant (or anyone else in SW) to get a domain to get a web domain and then to do something, anything, which demonstrates current knowledge. That demonstration becomes the top item on the resume, dated last month, and with a link to the live demo.
@Rob in CT:
If I were in that situation, I’d want to be able to cite a high StackOverflow rank, as demonstration of current skill.
Building such a rank takes work and knowledge, but many do it, and in the process demonstrate the same qualities that would make them high value employees.
@HelloWorld!:
Or perhaps your company is simply going to have to accept that the demand for employees is higher now and you’re going to have to pay more to attract the talent you want?
Another possibility is, as has been suggested, that you should take someone with demonstrated learning skills and knowledge of previous technology and train them in the current latest and greatest tech thingymabob.
My husband is a tech guy and it’s always fascinating to me that employers want to hire someone who knows all about this language/system/design protocol that came out 6 months ago. If you stay in the same job for a few years, you pretty much make yourself obsolete.
Finally, related:
That from The 1% aren’t like the rest of us, a reminder that while we come back to jobs … moaning(?), we don’t really focus on jobs policy.
@KariQ:
Having been in the field myself, I know that workers divide themselves. In any computer technology company there will be those who think they have found their technological groove, and just want to work in it from there one out. And then there are those who have an addiction to new and better technologies.
The second group will always have opportunities.
The first group is placing their bet that X will be around for 20 years.
@Gromitt Gunn:
Many years ago, I applied to get into a program they have here to train people to code. I honestly don’t recall what the progam language was at the time (C++? Cobalt? It was a while ago), but the point was this was, in the context of IT, grunt-level stuff. Stuff done today by Indian consultants (mostly, anyway).
They had the applicants take a logic test. I know I did well on the test. Then they interviewed me. Part of my pitch was “yes, I have a History degree, but I’m a good learner. Teach me and I’ll pick it up.” Suffice it to say I was not selected. That’s fine – maybe I really wasn’t a good candidate for the program. Maybe I suck at interviews (this is entirely plausible). But I do wonder if it was “what’s this liberal arts guy doing applying for this?”
Ultimately, this worked out well for me. Instead of having my job outsourced, here I am getting paid very well to read and write (the skills I already had). Funny how things work out.
Fears of “permanent unemployment” are voiced after every severe recession, then aggregate demand recovers, and such talk fades -to be replaced immediately with worries about “hyperinflation.”
@Rob in CT:
I think “mostly” is a little ahead of things. Some data:
So, as of 2011 some 35 percent of companies had some outsourcing in place, and a majority would like to. It is not a healthy trend but at the same time we do have the high end jobs going unfilled.
@KariQ:
Another possibility is, as has been suggested, that you should take someone with demonstrated learning skills and knowledge of previous technology and train them in the current latest and greatest tech thingymabob.
.Net is not that!
Maybe if firms decided it would be a better use of their funds to stop paying their CEOs 1000 times what they pay their workers and actually distributed some of that cash to the people who actually do the work, they’d find it a little easier to hire the folks they need.
But they’d rather demand employees with exactly the training and experience they need — and offer them substantially less than an appealing wage, just to make sure there’s plenty of cash to shovel to execs and stockholders.
This is one reason right wingers hate Obamacare — because once workers are freed from company-controlled health care, they’re free to go out and create their own businesses to compete with the dinosaurs. That’s real freedom… the one thing all Republicans hate.
@HelloWorld!: “Personally, I think this is a problem created by our government. I wish there was some serious journalism going on about why India, China, Iran, and other countries are pumping out engineers like there is no tomorrow, then going to work for CSC, Raytheon, IBM, Cisco, Lochheed, etc. Don’t get me wrong, I love our melting pot but there is omething happening to the American system that is not working.”
I know an American engineer working for one of those companies and his complaint is that his career trajectory sort of fizzles out after about ten years for engineering work. He enjoys engineering and learning new things, but at about that time, pay increases are only there for him to move to marketing, as someone who understands technology and can explain it. He would never get another raise if he stayed in engineering (other than perhaps a COLA). The engineering department is H1B visas and white-people in training as salesmen. Government visa policies abet this. Plus, the country compensates high language skills better than high math skills.
@wr:
California is working on a measure to allow folks on unemployment to start new businesses. Of course, for the same reasons you state above on employer-tied health insurance, the always insightful California Chamber of Commerce opposes the bill.
Conservatives working to protect the status quo – that it adversely affects the working poor is a feature, not a bug.
@Rob in CT:
I often wonder if part of the problem isn’t that when somebody wants to go into some type of computer oriented field, they are asked to spend 4 years in a university taking about 1/3 of their classes unrelated to their chosen field.
I sometimes wonder if the current college model and at the current college expense (which in most cases requires students to take out loans) doesn’t make some people leery.
I wonder if a 2 to 3 year computer science oriented program at an affordable cost wouldn’t pay off more.
So I guess I wonder if at least for this hole the problem is in how we educate and train people for these fields and if that isn’t resulting in some people opting for something else.
A few points:
1-) The developed countries that did not try to increase the number of college graduates, but that instead invested in professional programs and internships have low unemployment numbers, while the countries that did the opposite have very high unemployment. Denmark, Germany, Netherlands, Germany, Finland, all of them countries famous for their internships programs have the lowest unemployment in Europe.
http://www.guardian.co.uk/news/datablog/2012/oct/31/europe-unemployment-rate-by-country-eurozone
Japan´s economy is stagnated, but their unemployment is low. Singapore, another country that invested heavily in internships, has a 2% unemployment(Or something like that).
That´s not a coincidence.
2-) You have too many people graduating in areas where there are no jobs, and many paople are graduating in areas like Political Science and Law because they don´t want to have to deal with Math.
3-) Math classes at High School level in the US are considered to be a joke by many foreigners.
4-) Telecommuting makes outsourcing in IT an obvious choice.
5-) The United States is not an island. If you block the immigration of Indian Engineers they are going to sell their services from India.
@Rob in CT: One theory is that if you demonstrated high verbal skills in the interview, you were seen as a risk of leaving for higher pay at any time, so not worth training.
@HelloWorld!: I’m not sure what the going rate for mid-level developers in DC is, but in Seattle you would be looking at paying $110-$120k for a similar skill set.
I suspect you’re just being cheap.
@Gustopher:
Lots of data here, in part:
It is very hard to generalize these things, because skills, demand, and companies all vary. You know, if Trader Joes can choose to compensate checkers highly, for high commitment and low turnover, so can an IT shop. But in any field there are small outfits who churn ’em and burn ’em.
@Andre Kenji: The U.S. really doesn’t have policies to invest in certain education fields or vocations, but to the extent we have, its favored math to the detriment of language. High verbal scores are extremely rare in this country; high math scores are, in comparison, common.
What we have in this country are businesses unwilling to pay significantly for pure math skills. A business would rather use foreign labor, either outsourced or visa, at lower wages. Someone with good math and verbal skills would probably be better off in teaching or medicine or business.
@Gustopher: No, we’re not being cheep. We are paying above the salary requirements in DC according to RH 2013 survey. It’s the pack of American skills. What ever happened to those 2 year community college degrees?
@Hello World!: It seems to me like your hiring problem is on the verbal end, not the mathematical. Computer programmers tend to have the lowest verbal scores of any discipline. Link (scroll down to second chart). The chart suggests that people with relatively high math and verbal skills (as well as relatively more intelligent) are far more likely to migrate to other disciplines. I have no idea why. I wouldn’t think that someone with an associate’s degree in computers from a junior college would not be hired to do much more than the thankless, but necessary, task of of removing viruses from people’s $300 computers.
@Tony W: ” I have 7 openings right now for which I cannot find a soul who is both technical and can talk to human beings in an articulate and professional manner.”
Riiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiggggggggggggggggggghhhhhhhhhhhhhhhhhhhhhht.
Frankly, I have not seen a single example of this crap which wasn’t full of it,
with a thousand good reasons why in the fine print (e.g., paying $10/hr,
job requires travel 400 days of the year, employees must have 10 years of experience in the latest brand-new tech, employees must have 20 years of experience and be under age 30, etc.).
Got proof?
@john personna:
John,
Apologies, I was unclear: mostly at my particular company, from what I can tell based on years of discussions w/my wife, but not having access to hard data.
Just Me,
I think there’s probably a place for that, but if you noticed, Tony at least is specifically looking for someone who is both technically competant *and* can “can talk to human beings in an articulate and professional manner.” So the 2-3 yr program needs to make sure to develop those skills too. And, at least in my experience, that’s what the traditional liberal arts colleges are good at. If a tech school can strip out some classes and produce a lean, mean 2-3 degree that still results in graduates who can effectively communicate to non-techies, then great.
PD,
Well, that’s a flattering narrative… I like it! Alternatively, I came off like someone who wasn’t going to hack it. I’ll never know the answer.
@C. Clavin: “Look…we are down 1.5M – 2M public sector jobs since the beginning of the Bush Contraction. Put those jobs back in the mix and the picture changes. Demand goes up. More jobs are created. Those additional jobs create more demand, which creates more jobs. Absent those 1.5M – 2M jobs it’s just going to take longer.”
And in many cases, those government jobs would have been BA+ jobs.
I’ll stick with Krugman’s view on this, until somebody comes along who’s been even half as good as Krugman.
@HelloWorld!:
How so? Our government’s been going broke providing Stafford loans and Pell Grants to anyone who wants to learn these skills. Meanwhile, tuitions have been going up, so much that you can’t really “work your way through” school anymore.
While such rent-seeking is not unexpected, it would be difficult to fault the government for it.
For example, you need a mid-level .Net developer. Why not train one?
@PD Shaw:
Traditionally someone with high technical skills and verbal skills (for negotiation) consulted.
Closing the “1099 loophole” may have helped abused low end workers, but it was bad for economic efficientcy at the high end.
@Gromitt Gunn: “I see a three-fold situation here, as far as I can tell: One, we’ve got a lot of STEM types who lack training in effective communication and critical thinking. Two, we’ve got a lot of people with great training in writing and thinking who also have the capacity to learn accounting or engineering or software development or nursing, but in the exuberance of youth think getting a degree in *anything* is still the key to sucess. ”
Another way to phrase it is that with current corporate thinking and a depressed economy, companies are not willing to train people or to hire other than exact fits.
@HelloWorld!: No, it’s that you aren’t willing to pay what the market demands.
I may scream all I want about not being able to buy gas at 1$/gallon, but there’s no “law of the market” that says I will get what I want.
@Stormy Dragon: “The WSJ ought to hire a graphics art designer, because that graph is terrible. ”
It’s worse, because from the numbers it’s clearly not talking about current cohorts, but about everybody in the work force, which means it’s averaging in history for the past 40 years.
@Hello World!:
Doh! I guess there’s the answer to my “why not train one?” question.
It’s the story of the little red hen. “Who will train my workers?” “Not I,” said the company.
@john personna: “First, I think that social science grads misunderstand the STEM market and therefore tend to degrade it as a subset. Somehow petroleum engineers might be in high demand, and yet the problem is generalized to “half of graduates,” as if some half of petroleum engineers end up selling frocks at the local mall.”
What irritates me is the use of STEM – not the overuse, but the use at all. This covers from BS to Ph.D. to post-docs, and mathematics to biology to computer science to physics to chemistry to engineering. That’s an awesome breadth and depth.
@Just Me: “I wonder if a 2 to 3 year computer science oriented program at an affordable cost wouldn’t pay off more.”
We don’t quite have that, but we do have community college associate degrees – how employable are those grads, compared to grads with a BS?
@Hello World!: But you’re not looking at it correctly. If another part of the country is offering higher salaries for the exact same job and near the same cost of living, why should anyone who is mobile consider your lower paid job? It’s crappy by comparison.
Forget what the average salary is in your present location–that has zilch to do with what you need to offer to be competive among the good candidates. You’re competing with the salary level available throughout the US. Want a good candidate? You’re going to have to pay for it.
(I had this problem with a company that was looking to hire me in Las Vegas. They couldn’t get it through their tiny little minds that just because the average salary for an IP lawyer in the area was $84K that meant it was a reasonable offer to get me to budge out of Chicago.)
@Andre Kenji: “You have too many people graduating in areas where there are no jobs, and many paople are graduating in areas like Political Science and Law because they don´t want to have to deal with Math.”
Underemployment among recent grads affects most fields.
It’s not a case of just liberal arts grads.
@Gustopher: “@HelloWorld!: I’m not sure what the going rate for mid-level developers in DC is, but in Seattle you would be looking at paying $110-$120k for a similar skill set.”
And I’m sure that DC is much more expensive to live in than Seattle.
Again, every single f-ing example given is the employer’s fault.
@grumpy realist:
Plus you know they’ll try to pay you in casino chips.
@Rob in CT: In addition, if he’s looking for *high* degrees of competency in both technical and person-oriented skills, he’s looking at the intersection of two sets, neither one of which is huge (and if both of those need to be experts in some subset, it gets worse). In addition, the people with high technical + people skillsets are going to be in demand for sales, consulting, project management and general management.
@Barry: The requirement I especially enjoyed was where 5 years of experience was required in a computer language that had only been around for 2 years.
Look– U.S. companies used to realize that if they wanted specialized knowledge, they had better train in house. Now it’s continuous spoiled-bratdom, where the company insists that only candidates with knowledge of material X (or skill X) send in their applications, that they need 5 years of experience and be totally up to date with everything, and by the way, we’re not going to pay over the ordinary for any of it.
If you’re going to demand that your IP lawyer have 10 years of experience in PCT applications and is also trilingual in Japanese and Urdu, you had better be willing to pay for the rarity of the applicant: he can ask what he bloody well wants.
So a company wants to hire someone with an exceedingly specific set of skills, skills which may age out by the time a resume can be drawn up, won’t train, and wants to pay him the minimum they can get away with, and they’re surprised they’re having difficulty? That’s really not surprising. If you insist on limiting your choices to a tenth of a percent of the potential pool of applicants how could you possibly imagine that you’ll also get a bargain?
Find someone smart with the basic skills, a willingness and ability to learn and adapt, and hire him. You’ll have an employee who can also adapt and learn in the future. Someone you can retain long-term.
Jesus. And STEM people are supposed to be the smart ones.
@grumpy realist: “(I had this problem with a company that was looking to hire me in Las Vegas. They couldn’t get it through their tiny little minds that just because the average salary for an IP lawyer in the area was $84K that meant it was a reasonable offer to get me to budge out of Chicago.) ”
Come on! I’m sure that the (a) didn’t offer to pay relocation expenses, (b) didn’t offer to help your spouse, (c) and made it very clear that this was an uncertain position, and told you not to count on more than a year 🙂
@Barry:
It is true that STEM is a broad net. It’s also true that in-demand fields cluster around science, technology, engineering, and mathematics, Well, maybe pure math graduates exceed pure math jobs, but they can do well in hedge funds.
My frustration with the STEM war is that while, no not everyone can become “a successful STEM,” it is completely wrong to reverse it and say there are no STEM opportunities.
Of course, having made some small number of millions and retiring in my 40’s, I’d feel that way.
Why would this be a problem. Simply tell them your required salary and not to contact you again until they’ve chosen to offer you that salary. No problem, just negotiations.
Seems to me, most here are complaining about the failure of employers and applicants to arrive at a meeting of the minds. Well, that happens a lot so you move on to negotiate with someone else.
If applicants really want the job, they will compromise, salary or commute, or location, etc. If the employer really wants an employee they will compromise and stop the costs associated with not having the position filled. overtime pay, disgruntled employees, lower productivity, longer development times, etc. If the employer isn’t suffering costs associated with the unfilled position, then they probably not need the position filled.
@Barry:
I don’t think it’s clearly talking about anything. It looks like they just jammed some data into a chart to take up space on the page without bothering to think about what it has to do with the article it goes with.
The chart makes it look like people with only high school diplomas have done significantly better than people with associates degrees, which is flat out wrong.
@Barry: Oh, we didn’t even get to that point. It was during the initial pre-negotiation stage that we realized we were worlds apart.
It was even more hilarious because it was an obvious case of qualifications designed by a committee (everyone sticks their “needed skill” in) and I had to point out to them that roughly half of the stuff listed required the individual to be a licensed attorney….
If all those Republican governernors had not laid off the public sector workers in their states we’d be talking about the Great Recession in the past tense. It going to take a few election cycles but this type of tom-foolery for the purpose of creating political narritves and scoring points is going to get these clowns voted out one by one.
Had quite of bit of experience in the IT sector. The “can’t find qualified Americans” narritive is a joke. IT is a utility, you want to pay the least amount of money possible to provide the tools your workers need to work and collaborate. HB1B is nothing but an extension of outsourcing and allows companies the ability to insource cheaper labor for work they can’t outsource. It lowers their bottom line–period. College kids saw the lay of the land and decided to go into other fields so now there’s a negative feedback loop that has developed. Most IT jobs are thankless labour where no one cares about you or thanks you until the network or email is down—then you’re the goat. If you have any sort of communication skills or desire more social interactions in your job–you aren’t going to stick to doing pure IT work. It takes a unique personally to sit in a corner and massage code all day. Conversely, people with an aptitude for IT and who also have communication skills are worth their weight in gold. The people that hold the purse strings for IT budgets are often non-tech people. The last thing you want is for a geek to explain to executives why a project is important and have their eyes glaze over–you can believe funding for that project is going to be reduced or cut. By contrast, a smooth talker can keep a dog alive well past its time. That’s why the career path for technicians level off and require a managment focus over an IT focus to get higher pay. You’re simply more valuable if you can translate IT into business speak.
Ultimately however, the IT field is suffering from technology maturity in the same way other technologies mature and age. I actually wrote my graduate thesis on this years ago—IT will continue its march toward becoming a full-fledged service utillity no different that electricity, water, or elevator service. In their infancies, those technology advances required on-site engineers and experts to make them work for early adopters of the technology. Eventually they became more reliable, cheaper, and kept incrementally improving. At a certain level of maturity, technology becomes a service you pay a fee for and keep going. We don’t have elevator operators or electrical specialist working for companies anymore. You pay money to have the service delievered to your space and pay to have it maintained and serviced. Cloud computing was a predictable progression of IT maturity and is the same concept–you write a check and all the IT you paid for is provided. We’re still some years out but the day will come where people will look at having internal IT experts with the same novelty that we look at early 20th century firms that had internal experts to run the lights.
@Rob in CT:
It is going to take a lot of convincing for me to believe a 50k a year liberal arts program has the end result of a more verbally proficient person than a 2 to 3 year program would (education and pre college experience being equal).
Also, most computer oriented programs are from tech schools and 4 year Universities-not necessarily a traditional liberal arts program. But 4 years at 50 k per is a lot.
I simply think the current college for everyone and every major model isn’t resulting in much of anything other than massive debt for the students who often can’t find jobs to pay off the debt.
Back when my mother got her nursing degree-everyone went to a 2 (or 3) year nursing school. Now nursing is becoming one of those fields where 4 year degrees are preferred.
@JKB: I think what we’re bitching about is the inability of US companies to understand the following laws of the market:
a) you want something rare, you’re going to have to pay more.
b) you want someone up-to-date and with a great reputation, you’re going to have to pay more.
c) you’re not just in competition with all other employers in your area; you’re in competition with employers throughout the US (if not the world).
d) if you’re not willing to train people for your specific needs, then don’t whine when the perfect candidate fails to show up on your doorstep (or, when the perfect candidate does show up, asks for a ton of money.)
e) convincing someone to move away from a present job is going to cost more than if said person is unemployed and looking for a job.
f) insisting that a successful applicant be bilingual raises the price.
g) just because your CEO thinks that $XX thousand is a perfectly adequate salary for the job doesn’t make it so.
(in my case, I imagine they’ll run around looking for someone to fill the job for a few years, discover no one with the requirements they’re demanding, and then come back to me for whatever salary I may please. By which time, of course, I will have moved on…silly people.)
@grumpy realist:
All good, but I’ll add one for the other side.
Applicants need to understand that job openings are not equal. They don’t always mean “we need someone ASAP!” Sometimes they mean “we’ll hold this slot open, just in case some mythical creature, satisfying all our dreams, and willing to work 20% under-market, pokes her head in the door.”
@Just Me:
I wasn’t really disagreeing with you – just pointing out one particular possible pitfall. That’s all.
I too think 4yrs at $50k/yr is excessive for most folks (though a very small % actually pay that). I’m basically just arguing that one musn’t throw out the baby with the bathwater.
@grumpy realist:
Well, if we had a real free market then that company would not find a suitable candidate, not remain competitive and be replaced by a more nimble competitor. What’s not to like about that?
If they can go a couple years without the position filled or suffer through the costs of a string of candidates, then they really didn’t need the work done anyway.
@john personna: Agreed. Sometimes it’s a case of tailoring the specs so narrowly that you know they’ve got someone in-house that they’re thinking about but have to post something publicly to satisfy some regulation or other.
I just get annoyed at all the newspaper articles interviewing US companies moaning about how they can’t find qualified applicants. Maybe if they stopped paying the CEO the lion’s share of the cash flow and actually offered reasonable salaries for what they demand?
@Just Me:
Gosh, I wonder if there have been any advances in medical technology and the skill, depth, and breadth of knowledge required of nurses in the approximately 40-50 years since your mother got her nursing degree?
@ Just me…
How many $50K liberal arts programs can you document?
@JKB: Your strategy would not work in negotiations. “Take it or leave it!” offers rarely do.
@JKB: This isn’t quite right, either. Companies frequently decide to cut “soft stuff” (HR, management, customer support, R&D) with the assumption that “we can always catch up later” and then discover a year later to their dismay that a) there’s insufficient robustness within the system to deal with emergencies, b) the person who retired due to overwork took all the informal knowledge of the company with him, c) customers have gotten more and more pissed off to the point where the company is now not competitive with its competitors, or d) there’s no new products in the pipeline. Running your company down to skin and bones because it makes the last few quarters look great is a typical way that companies make themselves vulnerable to changes in the market/technology and enter the death spiral. Of course, it’s absolutely marvelous when your competitor does it….
Grumpy…
You’re trying to discuss the real world with JKB?
Good luck with that.
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Punchline …. Amit is an Indian pieceworker.
@C. Clavin: He’s been relatively reasonable so far…..broken clock theory?
P.S. The last high-tech company I worked for couldn’t believe our luck when the 800 lb gorilla competitor started insisting that their “customer services” division start producing a profit, based on sales of extended warranties vis-a-vis the cost of fixing customer’s systems. After six months of that, we literally had new customers walking in the door and putting down $200K for our equipment, swearing that it was worth it just to never have to deal with our competitor’s so-called “service” ever again. When you’re running a nationally recognized research lab, you can’t afford 6 weeks for downtime on getting things fixed.
P.P.S. A few years later, the 800 lb gorilla competitor wasn’t that big any more!
@john personna:
I think the devil is in the details here — who is in the “IT community”, making their $94k average, and who else does that include besides the mid-level C# developers with good communication skills?
I have four friends who switched jobs in the past year, and a decent sampling of those who haven’t — it is possible that my friends are all above average, but it’s more likely that the “IT community” includes people who fix paper jams in printers (or other, very important, but less valued tasks).
Of course, they do, you just have to be willing to leave it. You were complaining about a job offer that was insufficient for you to move from Chicago to take, so you left it.
@grumpy realist:
Yes, company managers make poor decisions all the time. But rather than the federal government interfering in the bankruptcy, we should just let them go. Their viable assets will be picked up by someone else and the market will be met with possibly even a better product at a cheaper price.
@Gustopher: Or perhaps more apt to the original piece, what are the entry level prospects today in the IT field?
@James Pearce (Formerly Known as Herb): I’m already training 2 junior programmers, neither from this country. I need a mid level, not a junior.
From: http://economistsview.typepad.com/economistsview/2013/03/is-job-polarization-holding-back-the-labor-market.html (ht to Mark Thoma, Economist’s View)
“Is Job Polarization Holding Back the Labor Market? ”
” Our findings show that while job polarization is an important ongoing trend in the labor market, it’s not a key contributor to the sluggish labor market recovery. Our analysis suggests that the weakness in the labor market is broad based and not limited to a certain segment of the market.”
@PD Shaw:
Starting salary data is one of the few reliable reference points we have. CS as a subset of IT (in the broad sense), would not be #3 in a buyer’s market.
As we all agree above, after a few years in the field, people tend to fan out to different niches.
(Wierd that computer engineering ranks as number one while having so much in common with modern hobby electronics. You would think they would be overrun with “makers.”)
@JKB: Well, that’s the fly in the beer bottle, isn’t it? The company can’t hire someone for what it thinks the job is worth, and rather than decide to up the salary to expand the pool of possibly interested candidates, whines about not finding anyone?
Do companies realize that market forces work in employment as well? Or are they totally clueless?
(If you want to hire cheap, hire someone with the basics, train them up, improve salary with increased skills, and make damn sure that they know there’s a progressive career path in front of them.)
A great HR person is worth gold to a company; pity there are so few of them…..
@C. Clavin:
The only way to hire more people in the government is to raise state and local taxes. If people have to pay more taxes for government employees to have a job, there will be less demand in the private sector. Do you really think you can tax your way to prosperity.
@superdestroyer:
It (apparently) may surprise you to learn that the state and local governments receive net transfers from the federal government, [which] controls the currency, and [which] does not have a direct need to tax now for spending now.
Deficit problems my develop, but as the link above shows, only 15% of voters think that is currently our most pressing problem.
@Gromitt Gunn: “One, we’ve got a lot of STEM types who lack training in effective communication and critical thinking.”
That’s because (at least in my experience) we have a lot of STEM major types who used to ask me “why do I need to take the b#!!s*!t compostion course when I’m not going to need to do any writing when I graduate.” They were the types who went through the motions got their C grade and then complained about their “crappy English teacher” who didn’t understand the world.
@Gustopher:
Exactly. Even a mid-level developer who doesn’t have good communication skills isn’t likely to be interested in a position that pays 90k. That’s more of a QA level salary, developers expect to earn more than that.
I mentioned the “Mid-level .net developer for 90k” issue to my husband and he said “Yeah, good luck with that. That’s too low.” You may get lucky, but chances are the people you want to hire will want more money.
@john personna: “(Wierd that computer engineering ranks as number one while having so much in common with modern hobby electronics. You would think they would be overrun with “makers.”) ”
Back in the days when one might be soldering transistors to a circuit board, yes.
Now, not so much.
@john personna:
state and local employees hired during a recession never seem to be laid off later when the economy recovers. The budget deficit is worse today because of ratchet spending in the past.
Also, how do progressives reconcile their giddiness of laying off healthcare, defense, and energy workers in the private sector with their support for increasing the number and the pay of public sector workers. If you want all healthcare workers to take a severe pay cut, then why should’t the public sector take pay cuts and cut backs.
I think “severe” is overstating it. But yes, I’ll own a desire to see more cost-control in healthcare, which will result in a paycut for at least some workers in that sector. How do I reconcile this with my understanding of macroeconomics? The same way I reconcile my general desire to move slowly closer and closer to budget balance with my understanding of macro. You take baby steps, when possible. Phase things in. Be cautious.
This isn’t actually the big gotcha you think it is. It’s a fair point, don’t get me wrong. But you overplay it, as you often do.
The core problem with the US government & economics is that they’ve practiced a bastardized Keynesianism: spending too much in relatively good times and, at least recently, being too cautious in bad times. Countercyclical policy would be much better, but it hasn’t been done properly for a while. Unfortunately, the 2002-2008 period involved a reduction in revenues and an increase in spending which made a mess of our government’s finances, which had been steadily improving for about a decade (repairing the fiscal damage from the Reagan era). And *then* we had a massive financial panic. It’s like a perfect storm.
I see us having basically two realistic options: 1) spend more, which will result in better GDP growth and lower unemployment but some more debt than the second option (exactly how much depends on the “multiplier” from the gov’t spending); or 2) the present path of holding down spending growth to reduce the deficit, resulting in sluggish GDP growth but less debt relatively to option 1 (again, how much less depends on how bad the GDP growth is, which impacts revenue). Either way, there are negative consequences (though not necessarily equally negative consequences, which is why the debate is important). We cannot escape that in the end.
I recognize that you and others like you think there is a third realistic option. Behind door #3: deep cuts, now (possibly with tax cuts too. For “job creators”). Since I hold that such a policy is insane, I’ll leave it to you to game out the results.
@Barry:
You aren’t really tracking “modern” hobby electronics are you?
The kids have pick and place machines.
Update: follow the Adafruit blog for a month.
@superdestroyer:
I suppose traditional American Liberals want to hire as many people as possible for government, while Conservatives want to fire as many as possible.
That has nothing to do with your weird claim that local governments are totally self-funding, and do not enjoy federal transfers.
@john personna:
Say what? I don’t know any liberals who want to “hire as many people as possible for the government.” Literally none.
@KariQ:
I say “traditional” because I kind of mean “before they became moderate.”
The answer to a great many questions used to be “sure, pay for it, raise taxes.”
I’d say we only see that attitude in niches now. Liberals are more likely to think that the answer to any education problem is to hire more teachers, always more, as an example.
(Not to say that we shouldn’t raise taxes, I think we must for the services we all demand, but I think that we should also be seeking savings across the board. Perhaps that even means supporting MOOCs and firing state college instructors.)
@KariQ:
I thought JP’s point is that even if you assume a charicatured view of liberals, sd’s argument has problems (transfers from the feds can mean that state/local gov’ts don’t necessarily need to jack up taxes *right now* to pay for an increase in spending. IF the feds borrow more and provide more aid).
@john personna:
I see. Thanks for the clarification.
@Rob in CT:
That could be. I have gotten so used to sliding right on by his arguments that I’m not sure what he was responding to, to be honest. I should have taken the time to check that.
@KariQ:
Gosh, even if you read carefully you won’t find anything that unkind.
As an aside, I think that any argument I put up is an argument to be tested. If anyone has a solid rebuttal, I’d love to hear that.
Otherwise I’ll assume my argument was uncomfortable but not falsifiable.
If you have an investment capital glut, yes you can. The problem is not so much that (that’s pretty established) but rather recognizing the right circumstances in which to start and getting off the drug when they are over.
@john personna:
I meant, I slide right on by superdestroyer’s posts. Yours I read. I may not agree with you, but at least you’re worth reading. SD, not so much.
@john personna: john personna says:
“@KariQ:
I say “traditional” because I kind of mean “before they became moderate.””
In other words, the political positions from over a quarter-century ago.
@Barry:
Well, just yesterday I did face another discussion in another thread that actually accused me of being heartless, because I did not support generalized increase in spending.
The argument there was that Keynes applied, and if you had sympathy for the unemployed, you’d spend more.
But as I noted, that kind of linkage is asserted more on the far left than the middle.
(Put another way, if the left are “natural” spenders, it becomes easier for them to believe in spending as a solution to a slump.
As we’ve noted with amusement, the right is only a natural spender when it comes to the military, and that is the one area where they think Keynes applies!)
Yes. While I understand the desire to push back on unfair caricatures, lefties are generally more into higher levels of spending. Come on. Of course we are. We think spending money on things via the gov’t actually sometimes works.
John, regarding that last bit: I’ve seen many a lefty snarkily suggest inserting national security language into any stimulus measure. After all, it worked for the interstate highway system…
@HelloWorld!:
So what you’re saying is not that there’s a lack of skilled workers, but that the skilled workers want more than you want to pay. Isn’t that the way the market economy is supposed to work? You make an offer of pay, the workers decide if its adequate.
I think what you want is not “enough” skilled workers, but “too many”, so that you can drive the price down by offering less. Right now the supply and demand of IT workers seems to be pretty much in balance overall, and the folks complaining that there aren’t enough workers usually just mean they want to pay a lot less than what those workers can find in other companies. Again, that’s exactly how the market is supposed to work.
Now in a planned economy, you could make a case that there should be an excess of workers with a given skill set, to keep the price down for the benefit of the industries.
@Rob in CT:
I think people who think spending sometimes work would be really, really, happy to embrace program-by-program review, and ROI analysis 😉
@john personna:
Indeed! Of course, such rigor is hard and folks will avoid hard when they can (also, ROI analysis is surely dependent on the assumptions. Make a bunch of 21st Century “Conservative” assumptions and every program has a negative ROI).
@Rob in CT:
Are you sure? You might not have really considered the looming Chinese threat to the Pacific!
(sarc. – for those who do not know me)