Plenty of Factory Jobs, but Now Too Few Applicants

This is the article I was referring to earlier - worth reading

Skills don't pay the bills

 

So why isn't there a rise in wages?

 

To be fair in his example of a shift mgr at Mickey D's, McDonalds is able to run massive profit because their food items benefit heavily from govt subsidies: corn & beef. Subsidies allow all the big food corps & the supply chain to turn massive profits from the trash they sell.

Perhaps it is basic economics. MFG could benefit from subsidies. It's no wonder everybody's going off shore for labor. The govt doesn't seem willing to help these types of businesses out as much as those with deeper pockets.

 

McDonalds is more competitive in the labor market for low wage jobs than manufacturers because they don't require high skills employees to subsidize their own training. That's what you should take from that.

Actually the offshoring of labor jobs has had mixed results and the growing trend is now onshoring/lean engineering etc rather than segmenting what is largely automated production for nebulous, and negligible labor price savings that sometimes don't net out. ...there's a long article in the Atlantic monthly about this.

 

Stickiness of wages is a basic economic phenomenon.

http://en.wikipedia.org/wiki/Sticky_(economics))

 

At whose expense?

Why should my money go to some corporation when I'm struggling to get by?

 

Touche.

 

I'd say at the direct expense of the DOD's budget. Lots waste there.

 

Right, but why are wages sticky in this instance? Why doesn't the factory employer offer a higher wage?

 

How does waste at the DOD justify giving my money to a corporation?

What makes some corporations more deserving of my money than others?

 

Because he's operating off of imperfect information and doesn't appear to be very good at attracting candidates due to his unrealistic understanding of the labor marketplace. That's why he hires 25 out of every 1000 applicants, and ends up firing half of them within a year.

Perhaps if he were to offer more attractive wages, he could lower his transaction costs from trying to churn through diamonds in the rough. Or maybe he prefers it that way and would rather spend thousands of dollars on employee turnover to save a countervailing sum by simply offering higher wages.

 

Well, to counter your points, I'm philosophically opposed to most subsidies. Small MFG of America doesn't have the size business to benefit from tax breaks & loop holes like the larger MN Corps but they're probably not mobilized financially either to help their cause. I also said these jobs typically appeal to hispanic labor so maybe they're just in the wrong state & is one of the reasons that Texas based MFG is doing quite well given our blended population.

Point I also had in this conversation is that for certain jobs, especially an entry level skilled position, it would be nice if unemployment benefits were extended for a duration to an individual coming into a job like this in an effort to learn a new skill-rather than play the math game like RR said and stay at home.

I'm not a hardline libertarian like you so I don't think I'll have the answer you're looking for.

 

I don't think everyone is using the same definition of "skilled workers"

 

So the explanation for the skills gap is systemic employer incompetence?

 

If other companies are able to find employees and he's not, then yes, it's likely employer stupidity. Not all employers are efficient or intelligent.

 

Sticky wages are a very Keynesian preposition, but they're only really sticky downwards due to menu costs, unionization, etc. Indexation actually assures to some degree that they do move upwards, for those lucky to have those contracts. Sticky wages are the whole empirical reasoning behind money illusion and a huge reason why monetary policy works in a Keynesian framework (by keeping nominal wage constant, but pushing real wage down), but it's important to note that these are macroeconomic concepts that cover the economy in aggregate. Applying them to individual actors, especially agents that are not unionized, is dubious.

 

THe explanation is that there is no "systemic" skills gap.

Can you show across-the-board employer incompetence that would prove this supposition?

[my guess is that you can't, and you will disappear from the thread, as per usual]

 

Wasn't that the premise of the article (and the OP article)? That factories in general are having trouble finding skilled workers

If it was confined to one anecdotal incompetent factory, why write about it?

 

You have it backwards. If it WASN'T confined to one anecdotal factory, they would have used statistics and other examples, but they didn't.