People Love to Talk About the Skills Gap. But What About the “Productivity-Pay Gap”?

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

A couple of stories caught our eye last week.

First, there’s this piece in the Wall Street Journal on how employers “feel the pinch” because of an “increasingly tight labor market.” There were 650,000 available jobs in the United States in July, the highest level on records back to 2000, according to the article.

The story mirrors what we often hear about the “skills gap” in manufacturing, the idea that there are many advanced manufacturing jobs out there but not enough workers with the know-how to fill them.

Remember that — we’ll come back to it.

We also came across this devastating story in the New York Times on Wednesday about how so many of the jobs out there — especially for workers without a college degree — simply do not pay enough to live on. Here’s an excerpt:

“In recent decades, the nation’s tremendous economic growth has not led to broad social uplift. Economists call it the ‘productivity-pay gap’ — the fact that over the last 40 years, the economy has expanded and corporate profits have risen, but real wages have remained flat… American workers are being shut out of the profits they are helping to generate.”

That NYT piece profiles Vanessa Solivan, a mother-of-three who, when times are good, makes about $1,200 a month as a home health aide. The 33-year-old spent almost three years as part of the “working homeless,” holding down a job but not making enough money to afford a place to live.

Vanessa finally secured a spot in public housing in May. But she still struggles to find the money for basic necessities like food; the federal government estimates she needs to bring in at least $29,420 a year to take care of her family (she earned $10,446 in 2017). Matthew Desmond writes:

“We might think that the existence of millions of working poor Americans like Vanessa would cause us to question the notion that indolence and poverty go hand in hand. But no. While other inequality-justifying myths have withered under the force of collective rebuke, we cling to this devastatingly effective formula. … [R]ather than hold itself accountable, America reverses roles by blaming the poor for their own miseries.”

Oof. That’s heavy stuff.

Let’s break things down a bit. There are solutions at hand, including increasing opportunities in manufacturing. Which brings us back to that first story and the skills gap.

It’s time to shift the narrative. We need to go deeper than stats about how many job openings there are and examine exactly why companies are having such a hard time filling positions. We must stop allowing companies (and policymakers) to pin the blame on the poor and working class when companies can’t find people for those jobs.

More needs to be done to bring poor and working class Americans into good-paying, middle-skill jobs, which often require education beyond high school but not always a four-year degree.

There are people out there who want these jobs. But as Vanessa’s story shows, many of those same people are struggling to get by. They don’t have the ability to seek out job training programs, figure out how to pay for them, and then actually take the time to finish them. They’re just trying to make sure their kids are fed.

It’s up to policymakers and the private sector to put systems into place to create better opportunities for people like Vanessa.

The National Skills Coalition recently took on this problem, recommending that the United States provide more pre-employment training opportunities to prepare workers for apprenticeships that offer a pipeline to good-paying, middle-skill jobs.

But the coalition also pointed out that for those programs to be successful, more must be done to provide affordable childcare for participants.

Many of the potential participants for these training programs have kids. But since childcare costs are typically more than they can afford, they are often forced to bow out.

Instead of gaining the skills they need to move into a good-paying career path, they continue to scrape by, working in jobs that don’t pay enough to live on.

The good news is that once people make it through these sorts of training programs and are hired, they often have a pathway to the middle class.

Take manufacturing. Factory jobs still pay a wage premium compared to jobs in similar private-sector fields, especially for those workers without a college degree. Manufacturing workers also enjoy an advantage in benefits like health insurance and retirement.

ArcelorMittal’s Steelworker for the Future program, for example, trains participants for advanced manufacturing jobs that can see them making $90,000 a year by their third year of employment.

There are other reasons for the pay gap that go beyond the skills gap, of course. As the NYT notes, the decline of labor unions is a big driver of growing inequality, as it emboldened corporate interests and disempowered rank-and-file workers, creating the imbalanced economy we’re dealing with today. Wages are growing too slowly, if at all.

It’s going to take a whole lot of work on a whole lot of different fronts to turn the tide.

But one way to start is to stop blaming poor and working class Americans for jobs that are unfilled. Instead, it’s time that policymakers and the private sector do more to ensure that people like Vanessa are provided with achievable pathways to begin to close these gaps.


Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work