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‘High-Paying Trade Jobs Sit Empty’ – What is going on in the labor market?

A few months ago, NPR reported on a report by the Washington State Auditor which found that good jobs in the skilled trades are going begging because students are almost universally being steered towards bachelor’s degrees. As a result,

Seventy-percent of construction companies nationwide are having trouble finding qualified workers, according to the Associated General Contractors of America.

Construction, along with health care and personal care, will account for one-third of all new jobs through 2022, according to the Bureau of Labor Statistics. There will also be a need for new plumbers and new electricians. And, as politicians debate a massive overhaul of the nation’s roads, bridges and airports, the U.S. Department of Education reports that there will be 68 percent more job openings in infrastructure-related fields in the next five years than there are people training to fill them.

The article quotes a college dropout who is now an ironworker earning $28.36 an hour, or more than $50,000 a year. This is a salary an increasing number of college graduates can only dream of. The story is, apparently, the same in Minnesota.

So what is going on here? Why are kids stepping over these ‘bills on the sidewalk’? There are two possibilities.

Lack of information

First, it may be the case that the kids going to college are simply unaware of the alternatives open to them in skilled trade jobs. They might not know that with a couple of years on the job training they could be earning $50,000 or $60,000 annually as a steelworker or lineman.

If this is the case, then the solution is relatively simple. Someone – preferably the desperate employers – needs to make them aware of these opportunities.

Lack of interest

The second possibility is that these kids are aware of these opportunities but just aren’t interested in them. In this case, the kids value whatever they’re doing instead higher than they value doing one of these jobs. In this case, solving the problem is trickier.

There might be things, such as a flexible schedule or the satisfaction earned just from having a degree, which the kids in question value enough to offset the higher pay from a trade job. It might be that, socially, such jobs are looked down for some reason and the wages on offer in trade jobs are not high enough to offset that.

Either way, as with any ‘shortage’, part of the solution is to offer higher wages. But how much higher can employers go? If hiring a worker to do a given job will add $X per hour to an employer’s revenue it will pay them to hire the worker at any wage up to $X per hour. The truth is probably some combination of both. But if they cannot find anyone to work at $X or below the job will go unfilled.

The answer is probably some combination of both. The solution will lay in some combination of better information, better pay, and different attitudes towards trade jobs.

John Phelan is an economist at the Center of the American Experiment. 

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