Skills gap, real or not, could put long-term dent in California economy

150 150 John Guenther

Welder on a San Francisco highrise. (Photo credit: Greg Younger via Flickr)

Over the past year, there’s been an ongoing debate on if the skills gap is a mythical beast or real.  The statistical battle is over whether or not there is a gap between the amount of available highly skilled manufacturing workers and what the industry needs now.

Adding to the conversation, a study released today by the Boston Consulting Group says the shortage amounts to only 1 percent of the 11.5 million total manufacturing workers in the U.S., or 80,000 to 100,000. Hal Sirkin of the BCG told USA Today, “There’s a relatively small skills gap that can be managed.”

Earlier this year, analysts from the Atlanta Fed delved into a survey of CEOs to conclude there is scant evidence that a skills gap has contributed to difficulty in hiring during the recession.

Yet, an executive at a California steel manufacturer told us that his number one problem, among all that could be given by a California manufacturer, was finding trained-up workers and preventing them from being poached after being trained.

Many will point out that any skills gap that may exist is being caused in part by companies that have been cutting their own training programs as shown in a recent survey of employee benefits.

The California Community Colleges are not waiting around to find out and are making a push to form partnerships so that technical education programs will line up with labor market needs now and in the future. They are holding forums around the state to connect business groups, workforce boards and colleges.

And everyone, from the BCG report to the Fed analysts, seems to agree there is a long-term danger of the skills gap becoming a real problem. Manufacturing in California has been slow to make a turnaround compared to other states. A lack of workers in the coming decade will only exacerbate what many consider a tough business climate.

The BCG authors acknowledged that, as the huge Baby Boomer population in punches the time clock for the last time, there needs to be a concerted effort to replace those workers through education and training partnerships between schools, companies, governments, and nonprofits.

“In the years ahead, it will be critical to find ways to extend these programs to reach a broader population,” said Michael Zinser, a BCG partner, in their press release.

The report also points out that the “re-shoring” movement could make the skills shortage worse if manufacturers look to return operations to the U.S. as labor costs in China increase.

Because it can take a long time to adjust curriculum and also because the economy can change overnight, it’s vital California makes a real effort to better align technical education with industry needs. We can’t afford to wait and find out that the skills gap is a real thing and is here now.

The California Economic Summit is tackling this significant workforce hurdle along with several others through our SMART Workforce Action Team. Keep tabs on our progress on this issue and the others on the Progress Tracker site.


John Guenther

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