In recent years the press and the manufacturing industry have been constantly writing about a supposed "skills-gap" in the American workforce. The premise propagated by the press and manufacturing executives is that there are hundreds of thousands of unfilled positions in the manufacturing sector because employers simply can't find workers with the hecessary math or technical skills to fill the positions. The press and the industry have blamed a wide variety of factors for the supposed shortages, such as blaming the public educational system for not preparing workers with the right technical skills, purporting that younger generations do not want to work in manufacturing because of a perceived stigma associated with manufacturing jobs, and they have also stated that younger generations do not want to work in manufacturing because it is perceived as highly volatile and susceptible to the ups and downs of the cyclical economy. You have read and learned about supply and demand in our textbook. If there was a dire shortage in the supply of manufacturing workers coupled with a strong demand from the manufacturing industry--what do you think would happen to wages for workers in manufacturing jobs? If you have been reading the textbook you would quickly assert that wages would be going up to equilibrate the market. Well they haven't been rising much more than inflation, in fact over the last year (2015) they only rose slightly more than 2 percent, as evidenced by the following Bureau of Labor Statistics graph which shows the percentage change of hourly manufacturing wages from the prior 12 months: FRED - Average Hourly Earnings of Production and Nonsupervisory Employees: Manufacturing 2.5 2.0 1.0 0.5 0.0 (Percent Change from Year Ago of (Doll per Hour))
In recent years the press and the manufacturing industry have been constantly writing about a supposed "skills-gap" in the American workforce. The premise propagated by the press and manufacturing executives is that there are hundreds of thousands of unfilled positions in the manufacturing sector because employers simply can't find workers with the hecessary math or technical skills to fill the positions. The press and the industry have blamed a wide variety of factors for the supposed shortages, such as blaming the public educational system for not preparing workers with the right technical skills, purporting that younger generations do not want to work in manufacturing because of a perceived stigma associated with manufacturing jobs, and they have also stated that younger generations do not want to work in manufacturing because it is perceived as highly volatile and susceptible to the ups and downs of the cyclical economy. You have read and learned about supply and demand in our textbook. If there was a dire shortage in the supply of manufacturing workers coupled with a strong demand from the manufacturing industry--what do you think would happen to wages for workers in manufacturing jobs? If you have been reading the textbook you would quickly assert that wages would be going up to equilibrate the market. Well they haven't been rising much more than inflation, in fact over the last year (2015) they only rose slightly more than 2 percent, as evidenced by the following Bureau of Labor Statistics graph which shows the percentage change of hourly manufacturing wages from the prior 12 months: FRED - Average Hourly Earnings of Production and Nonsupervisory Employees: Manufacturing 2.5 2.0 1.0 0.5 0.0 (Percent Change from Year Ago of (Doll per Hour))
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 4P
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Transcribed Image Text:Preface: The following information applies to the years 2011 through 2015
In recent years the press and the manufacturing industry have been constantly writing about a supposed "skills-gap" in the American workforce. The
premise propagated by the press and manufacturing executives is that there are hundreds of thousands of unfilled positions in the manufacturing sector
because employers simply can't find workers with the necessary math or technical skills to fill the positions. The press and the industry have blamed a
wide variety of factors for the supposed shortages, such as blaming the public educational system for not preparing workers with the right technical skills,
purporting that younger generations do not want to work in manufacturing because of a perceived stigma associated with manufacturing jobs, and they
have also stated that younger generations do not want to work in manufacturing because it is perceived as highly volatile and susceptible to the ups and
downs of the cyclical economy.
You have read and learned about supply and demand in our textbook. If there was a dire shortage in the supply of manufacturing workers coupled with a
strong demand from the manufacturing industry--what do you think would happen to wages for workers in manufacturing jobs? If you have been reading
the textbook you would quickly assert that wages would be going up to equilibrate the market. Well they haven't been rising much more than inflation, in
fact over the last year (2015) they only rose slightly more than 2 percent, as evidenced by the following Bureau of Labor Statistics graph which shows the
percentage change of hourly manufacturing wages from the prior 12 months:
FRED
- Average Hourly Earnings of Production and Nonsupervisory Employees:
Manufacturing
2.5
1.5
1.0
0.5
0.0
2011
2012
2013
2014
2015
(Percent Change from Year Ago of (Dolls per Hour)
Transcribed Image Text:research.stlouisfed.org
Assignment:
Read the following article on the supposed skills-gap shortage:
Labor Shortage.pdf
Write at least 2 paragraphs about what you think was going on in the manufacturing labor market and the difference between what the press and industry
was purporting versus what the wage data was conveying over this time period.
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