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Tuesday, October 31, 2006

Work, Poverty, Labor, Unions - Professionals - an endangered species?

The law of supply and demand suggests that when supply falls below demand, prices rise. A new survey suggests that professional workers are in short supply, and as a result their wages are rising.

I report on the survey results below, but one question I have is whether this situation could be the result of problems I have repeatedly reported on access to higher education. Here and here and here and here. And more reports and stories here and here on this crisis.

The press release on the Manpower survey finds shortages in many areas. It states:

It’s a job seeker’s market for educated professionals like accountants, engineers and nurses, according to a survey released today by Manpower Professional. With 45 percent of employers reporting difficulty filling these types of positions, the United States is among countries with the most serious talent shortages. The tight supply of professionals is putting upward pressure on wages with 38 percent of U.S. employers paying higher wages for the same positions compared to the previous year.

“This is a good time to be in the job market – if you have the skills that employers want,” said Jonas Prising, President of Manpower North America. “In the U.S., we’ve been seeing shortages in specific skill sets such as IT and engineering. If you’re a job candidate, the key to taking advantage of the talent shortage is to focus on re-training or skills enhancement to ensure that your skills are in sync with the contemporary job market.”

Positions are hardest to fill in manufacturing, specifically the durable goods sector, where 51 percent of employers reported difficulty finding qualified professional candidates. Shortages in the transportation and utilities sector were reported by 50 percent of employers, while 49 percent of employers in the service sector reported difficulty filling jobs.

The lack of professional talent is spurring the greatest wage inflation for government agencies where 43 percent of employers reported paying higher wages compared to last year. Additionally, 41 percent of employers in the service, transportation and utilities and construction sectors said they were paying higher salaries to recruit professionals.

You can download the survey data here. It is a 79kb xls file.

Does this make sense? Is this what we are seeing in our lives? What about globalization and the runaway shops that ship jobs, including professional jobs abroad? How will employers react to this report?

Posted by shirah at 01:25:00. Filed under: education

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5 comments

[1]
"The tight supply of professionals is putting upward pressure on wages with 38 percent of U.S. employers paying higher wages for the same positions compared to the previous year."

Because of inflation, you'd expect 100% of employers to pay more than the previous year, just to keep up. That only 38% are paying higher wages suggests that, even in these fields, workers are falling behind inflation, in spite of the alleged skills shortage.

Posted by BobB at Tuesday, October 31, 2006 07:02:43

[2]
Great point. They just ask if they are paying more - not how much more. So if they are paying 1% more, which is below the rate of inflation and therefore a wage cut in real terms - the employer would answer yes.

And where the employers answer that they are having trouble attracting or finding professionals, is that because they have failed to offer enough money and are losing out to the employers who are paying better wages - or is it because our schools are failing to educate enough people? Or is it because employers have gotten out of the business of training their workers and encouraging them to move up through the organization?

Posted by shirah at Tuesday, October 31, 2006 09:04:18

[3]
In its recent survey on talent, the Economist said that HR managers see recruiting and retaining top talent is a major priority. It explained that the number of jobs involving "complex interactions requiring a high level of judgment" is growing, and employers have to compete for employees who can fill those jobs. Demographics and a lack of training are two reasons why the pool isn't as big as employers would like.

http://www.economist.com/op...

Based on what I see and hear about anecdotally, I think it's true that training is a problem. Companies too often seek to hire upper-level managers externally, rather than grooming internal candidates from lower levels. A lot of high school graduates also lack the skills that would allow them to get in on the ground floor and work their way up to a professional job.

Posted by DCvote at Tuesday, October 31, 2006 10:10:09

[4]
It's also important to note that employers often complain about how hard it allegedly is to hire good workers.

For example, Bill Gates whines about not being able to find enough qualified people, and that's why the country needs to bring in more foreign workers with H1-B work visas. It's just another plot to hold down our wages.

Posted by BobB at Tuesday, October 31, 2006 10:46:14

[5]
There is some evidence, though, that employers are increasingly using a degree as a mark of certain qualities they see as necessary to get the degree but that have nothing to do with the actual educational part of the degree. But it is easier to look for the degree than find out whether a candidate possesses those skills.

Posted by shirah at Tuesday, October 31, 2006 11:36:27

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