Why Don’t Skills Pay The Bills?

The New York Times Magazine carried an article about various manufacturing companies who are desperate for new workers. They need to have advanced math skills as well as an interest in working in a plant. Job security is poor because they can’t really guarantee that the whole plant may be moved to China next year.

Did I mention they only want to pay about $12/hour?

An unskilled laborer can earn $14/hr. as a supervisor at McDonald’s. You can virtually hear an economist, interviewed for the article, laugh out loud at the demand for more skills without any accompanying higher wage. We constantly hear about how we need better skilled labor and a better education system so we can provide business with what they need. “They” tell us there are 3 million jobs that are going unfilled in spite of the 8% unemployment rate. In fact our labor force is acting quite rationally. They are not acquiring new skills because there is no additional pay (= a negative rate of return)

The NY Times provides a case study with regard to the divide between the tradable sector and the nontradable sector. The former competes with the giant economic parasite known as China. They offer controlled peasants who accept slave wages and a currency guaranteed to stay permanently undervalued. What’s a multinational not to like? Every executive in a manufacturing company that has not yet outsourced all its labor feels pressure to pay his first world workers like Chinese slaves. McDonald’s has no outsourcing option.

And for all those politicians that keep saying “we don’t want those jobs” – you know, the ones where unskilled people do unskilled things and earn low wages. “Let them all got to the third world. We want to train our people for the next century to do creative innovative work like designing iPads” . Take a look at the average person at the food court of your local mall and tell me if they look like industrial designers with advanced degrees in science. Maybe you’ll understand why there is such a line to get a new job at Burger King.

Apparently lots of people do want those jobs.


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