November 16, 2012

The Sucking Sound of (At Least Some) Skilled Workers Leaving the US

Defenders of the Obama Administration’s indifference to high levels of unemployment often claim the problem isn’t readily remedied because the US suffers from “structural unemployment”. That’s really wonkese for blaming the victim. No sirreebob, the problem isn’t that there aren’t enough jobs, but that the workers are no damned good, as in they don’t have the right skills for our new super duper information based economy! In mainstream media outlets, claims like this are usually followed by a business owner saying there clearly aren’t enough skilled employees, he can’t hire any good machinists for $13 an hour. Generally speaking, Mr. Complaining Boss is offering below the going rate, but why let pesky details spoil a good narrative?

You don’t have to look hard to find evidence against this argument. Unemployment is high among new college grads, normally one of the most sought after types of job candidates. Unemployment is also high across pretty much all job categories; you’d expect to see pockets of strength if there was a skills mismatch. Revealingly, you’ll hear Obama administration types say we need more engineers, when engineers will tell you the pay is too low relative to the cost of getting educated these days (unless you decide to get a law degree too and become a patent lawyer). If engineers really were scare, you’d expect pay scales to reflect that fact. Both the Economic Policy Institute and CEPR have published more rigorous debunkings.
Earlier this year, Australia started looking to hire skilled workers from the US. From Newsmax:
Australia has made a plea for American plumbers, electricians and builders to move downunder to fill chronic shortages of skilled workers as the economy struggles to keep up with a resources boom fuelled by demand from China.
Industry projections from Australia’s employment department show Australia will need 1.3 million extra workers over the next five years, including almost 200,000 more workers for the construction sector.
Australia will also need around 320,000 more health care and social assistance workers.
Australia has been running immigration seminars in India and Europe to attract skilled workers, and will now target the United States for the first time, with a skills expo set for Houston in Texas on May 19 and 20.
These are the sort of “middle class jobs” that people like Gene Sperling of the National Economic Council say they want to create. At the same time, when I once saw Sperling speak about “middle class job”, it was hard not to see that he viewed the “middle class” as a remote, but important object of concern, as opposed to a group he was part of.

Although Australia is at risk of being pulled down by slowing growth in China (the indicators are mixed), Canada has also started looking for experienced workers, in its case, in the oil industry. From OilPrice:
Canada is predicting a doubling of oil production by the end of this decade. This means it will have to secure its workforce to the tune of tens of thousands of new laborers. So if you want a job in the energy sector, try your northern neighbor.
Since 2010 alone, Canadian officials say that some 35,000 US laborers have obtained permits to work in Canada, and there are plans in the works to make permits even easier to obtain. In the meantime, Canadian head hunters are stepping up their efforts at recruitment—taking advantage of the number of jobless in the US.
Oh, and these jobs tend to come along with an attractive salary, free healthcare, stability and bonuses.
In other words, America’s continuing push to treat workers as disposable puts US companies at a disadvantage relative to employers in economies where for legal and cultural reasons, employees are treated better than in US. Now admittedly, this trend is taking place only in certain job categories, but twenty years ago, you would have been laughed out of the room if you had suggested that laborers like electricians and plumbers would have a better financial future if they left the US. And with college costs skyrocketing, you can expect to see more American students get their degrees overseas and that will increase the odds that some of them will wind up working abroad. American exceptionalism allows America’s leaders to keep pretending we are number one and use that as an excuse for inaction, when the evidence on the ground calls that into question.

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