Education and Underemployment


It took a German to speak truth to power.

Eric Spiegel, CEO for German engineering giant Siemens’ US operations, was talking with reporters while waiting for Treasury Secretary Tim Geithner to visit a Siemens facility in Ohio late last month. Spiegel caused considerable consternation when he bluntly asserted that Siemens and other high-level manufacturers were having trouble finding adequately skilled workers, despite America’s high unemployment rate.

As Spiegel put it, “There’s a mismatch between the jobs that are available . . . and the people who are out there. There is a shortage [of workers with the right skills].”

Spiegel went on to say that the hidden problem of finding qualified employees among the hordes of the unskilled and unemployed exposes the weaknesses in the American system of education and job training. He noted that Siemens has had to turn to over 30 “headhunters” (professional job recruiters) to find qualified American workers, and is also trying to hire workers from abroad.

Now, with an unemployment rate that just went back up to 9.2%, and an anemic recovery that created only a laughable 18,000 jobs last month (with a pathetic 500,000 net new new jobs in the past two years of “recovery”), it may seem strange to say that there is a shortage of trained people.

But a recent survey by the major employment agency Manpower shows that over half of all the top American firms are having trouble finding key staff. It’s a dramatic increase from as recently as 2010, when only 14% reported recruiting difficulties.

Ironically, the need for skilled workers is greatest in an area of the American economy that has long been considered defunct: manufacturing. The number of manufacturing jobs available for the high-skilled has risen from 98,000 in early 2009 to 230,000 today.

The Obama regime has of course responded — by proposing to expand the “Skills for America’s Future Program.” That is, throw more money at the problem.

So far, this government program has miserably failed to provide correctly skilled workers in the requisite numbers. The idea of dramatically increasing school choice, so that schools could spring up that would work with various industries to give them what they need, and what is profitable for the students, seems like a better place to start. But that’s not likely to happen.  To speak an absurd understatement, this regime shows little stomach for free markets in education — or anything else.

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Perhaps education standards are the problem? Rather than throwing money at public institutions, private schools seem to have the right idea: invisible hand competition. Ideally, only the school that produces results that society demands would get funding. Admissions standards help curve this better than no standards at all, and it's also the students responsibility to get as much, or as little, out of college at all. And their jobs later on will reflect that effort, which of course is pretty much in line with libertarian thought.


So what would the free market alternative be? People aren't willing to take the road of education to become qualified enough to get employed by companies such Siemens therefore the free market solution would be for companies to leave the U.S. or not set up in the U.S.? It takes a great deal of investment to convert people from being unskilled to suitably skilled- so who's going to pay for it? Would Siemens offer "on the job training" to unskilled workers? Or do Siemens simply want people to appear out of nowhere and be magically qualified at their own expense?

Downsize DC

One suggestion is apprenticeship-style training. Start at a company to sweep the floors half the day, learn the ropes the other day so that one can acquire more training and more responsibility over time. Schools, students, and companies should all be free to work together to see this come about.

J Eyon

Gil -

check out the original article linnked at the beginning of this one - Siemen's CEO mentions the companies investiment in training and apprenticeships

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