Who Makes More: A McDonalds Manager Or a Skilled Machinist?

Who Makes More: A McDonalds Manager Or a Skilled Machinist?

November 25, 2012 1:00 pm 0 comments

Adam Davidson writes for the New York Times:

Throughout the campaign, President Obama lamented the so-called skills gap and referenced a study claiming that nearly 80 percent of manufacturers have jobs they can’t fill. Mitt Romney made similar claims. The National Association of Manufacturers estimates that there are roughly 600,000 jobs available for whoever has the right set of advanced skills.

Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.

The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.

Full Story: New York Times: Skills Don’t Pay the Bills

Good comment from someone on Hacker News:

I think it is important to note that the fast-food jobs with comparable pay are low level managerial positions, not entry level ones. You can start working for minimum wage at a fast-food job without any previous experience and/or skills. These jobs require very little training, and allow employees to add value almost immediately (and well before promotion to the $15-$20 an hour positions).

Contrast this to the skilled manufacturing jobs which require up front experience. Though many blue collar fields offer entry-level positions with on the job training, apprenticeships, and opportunity for advancement, this doesn’t appear to be common practice in manufacturing. Why not? I think the main reason is that it is very hard for a low skill worker to add value to a manufacturing company. There aren’t any comparable entry-level positions that allow the employee to learn while still being productive.

Because of this, hiring an unskilled employee for the purpose of training them is a huge risk, since it requires a significant investment. And since this industry is already very unstable with razor-thin margins, it’s not something many employers seem willing to do, which is unfortunate.

So maybe the solution is coming up with better training programs, so that manufacturers can hire new employees without taking on such large risks?

Other commenters discuss the paths from low-skilled labor to high skilled careers within a company that have been followed in the past. Are those days truly gone?

Previously: Even (Relatively) Low-Skilled Jobs Are Going Unfilled

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