After his first state budget included Filet of Technical College, Gov. Scott Walker took note of the state's badly lagging job-creation performance under his own watch and declared that Wisconsin needs to better match skills with unemployed workers. Especially unemployed workers on public assistance. So in his second budget Walker proposes to add back a tiny sliver of the millions he's already swiped from technical schools that do a lot of job training. His compass in this move is Tim Sullivan, former CEO of Milwaukee-based Bucyrus International.
Sullivan, a Walker ally who himself toyed with the idea of political office, has gone on record loudly proclaiming a jobs/skills mismatch in the state. He said Bucyrus, which he left after it was purchased by Illinois-based Caterpillar Inc., set up a plant in Kilgore, Texas, in 2009 because the firm was struggling to find welders to fill open jobs in Wisconsin. Sullivan added he couldn’t get the training programs he needed from Milwaukee Area Technical College.
Sullivan was contradicted by MATC instructor Larry Gross, who wrote that he worked with Bucyrus to create a custom curriculum to help students pass the Bucyrus welding test. In a guest Milwaukee newspaper column, Gross also noted that the city of Kilgore offered $540,000 in incentives to Bucyrus for building its Texas plant.
About a year later, Walker recruited Sullivan to come up with workforce training ideas for his new administration. Sullivan produced a report that seems to have been instrumental in Walker's most recent pronouncements on how to solve the "problem."
Only, as MATC's Gross first suggested and as it has since become more evident, the Walker/Sullivan ideas on supposed job skills mismatch in our state appear quite skewed if not wholly wrong. So says a new study by Marc Levine, a University of Wisconsin -- Milwaukee professor who focuses on economic development issues. Levine's report, issued last month, fundamentally shoots down the Walker/Sullivan position. Along with other examples and thorough statistical data, Levine focuses on Sullivan's claim of a supposed welder shortage and writes: "There are more than three times as many welders as there are projected annual job openings for welders in Wisconsin; and when jobless welders from other urban centers in the Midwest are taken account, the gap is closer to 10-1."
Short course: The claimed skills gap may actually be a pay mismatch. Many unemployed or underemployed welders are available in the Wisconsin labor market, but they're being offered substandard wages relative to their experience, training and what the market generally pays. Levine flatly states that the jobs skills mismatch idea is wrong.
Levine's full report is available at the URL in the links section below. But if you're pressed for time, you can listen onilne to a solid summary interview with Levine recently broadcast on WUWM-FM, a Milwaukee public radio station. For that stream and a summary article, go here:
http://www.wuwm.com/programs/lake_effect/lake_effect_segment.php?segmen…
Levine's arguments make sense. After all, as journalist Bruce Murphy notes in an excellent new blog post on the issue (see URL link below), it's hard to understand how there can be a skills gap and a shortage of qualified workers when the state has a large pool of skilled workers looking for jobs. Murphy's thorough reporting adds value to Levine's report, which he also ably summarizes. Excerpt:
Levine notes that real wages for welders have actually declined in Wisconsin since 2000, and in Milwaukee by 9 percent, which suggests there is an oversupply of welders, unless the laws of supply and demand have somehow been abolished. He contrasts that to states like North Dakota, Wyoming and Alaska, “where a chronic shortage of welders, driven by the boom in the energy industry… has lead to a surge in employment and real wage growth for welders” ... .
... Regarding Sullivan’s contention that a lack of “qualified, factory-grade” welders in Milwaukee led him to move the work to Texas, Levine notes that “the percentage of welders in Texas without a high school diploma is triple the Wisconsin rate” and “the percentage of welders without a high school diploma in Kilgore, Texas, the site of the new Bucyrus plant, is almost double the percentage of welders without a high school degree in Milwaukee County.”
Levine notes the package of incentives offered by Kilgore and the fact that average wages for welders in Kilgore, Texas are far lower than for welders in Milwaukee County. This suggests the jobs were moved because the company saved money.
There is much more from Murphy and I recommend his post to anyone concerned about job creation and retention in Wisconsin. Again, see the link below.
The bottom line is that lawmakers like Walker need to stop raiding funds from work training programs and then tinkering with them as if they were mysteriously broken. The state also needs to think long and hard before handing out government cash assistance to businesses that claim they'll use the funds to train their own workforce. Meanwhile, those businesses in some cases need to start offering work at market-competitive wages to the in-place, skilled workforce that's just waiting for a dignified offer.
But above all that, fixing Wisconsin's pay mismatch increasingly appears to require that voters will first have to fix the political/corporate brains mismatch.