Monday, November 26, 2012

Last Call

What a surprise!  Adam Davidson's article on the so-called "skills gap", that employers are unable to find enough people to fill highly skilled manufacturing positions, has found a very definite reason behind it:  near minimum-wage pay rates.

Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour

The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages. 

To recap, manufacturing jobs in 2012 consist of people with engineering and computer programming skills with 2-year college degrees who end up making about thirty, thirty-five grand a year.  McDonald's pays more and you don't need a degree.  Think about that.

Now tell yourself the problem is unions and that manufacturing jobs pay too much, and if only those awful unions were gone, America could be more "competitive" by paying workers even less.  And indeed, as a result, wages for manufacturing jobs are going down, not up.

College or trade school educated workers are making $15 an hour, and that's too much money in 2012.  But let's cut taxes on the rich.  That'll solve the problem, right?

One Barak Who Won't Be Back

Former Israeli PM and current Defense Minister Ehud Barak is calling it quits, saying he won't seek another ministerial position after January's elections.

Israeli Defense Minister Ehud Barak announced his resignation Monday, saying he will quit politics in January to spend more time with his family.

His resignation comes at a highly delicate time for Israel, which is observing a fragile cease-fire with the militant Palestinian group Hamas after an eight-day conflict that killed more than 160 people -- the overwhelming majority of them Palestinians in Gaza.

The Palestinians are not exactly sad to see the guy go, either.  And speculation that Barak would try to revive the center-left Kadima coalition, well that's right out too.

Some Israeli political commentators had speculated ahead of the announcement that Barak was planning to quit the government of Prime Minister Benjamin Netanyahu to form a new center-left party.

But Barak told reporters that new faces in leadership roles would benefit Israel.

"I feel it is important that other people should take leading positions in Israel. Changes in the position of power are a good thing. There are many ways to contribute to the society and the country, and not necessarily through politics," he said.

Barak served as defense minister under former Prime Minister Ehud Olmert between 2007 and 2009, and retained the post under Netanyahu from 2009 until the present. He also held the title of deputy prime minister for both administrations.

I'm thinking anyone who ends up in the post after Barak at this point is most likely not going to be less militant or less "blow up Palestinians every couple of years to make a point".  We'll see where this goes.  Barak will stay on through January, but he's out after that.  Considering we're back into "Iran is only months away from a nuke" mode, whoever does replace him will have a pretty full plate, especially if Netanyahu retains his office as I expect he will.

The Exchange Of Makers And Takers

When the conversation next turns to "makers versus takers" again, keep track of the states who have simply refused to implement health insurance exchanges, keeping their own citizens uninsured longer and forcing the federal government to set up the exchanges for them at federal taxpayer expense.

Since different states have different insurance markets and different eligibility requirements for Medicaid, Obama’s Health and Human Services Department can’t simply take a system off the shelf as a one-size-fits all failsafe.

"You can't simply deploy one federal exchange across the board," said Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation.

"Each state is different — their eligibility systems are different, their insurance markets are different. [HHS is] going to have to build these exchanges to fit into the context of each state."

Every state must have an exchange by Jan. 1, 2014, meaning HHS doesn’t have a lot of time to do a massive amount of work. The department could quickly run through a $1 billion fund designated for implementing the exchanges.

Experts have predicted that the department will soon have to tap budgets from its other programs to cover exchange costs. Other have said it might charge fees on the insurance purchased in its exchanges once they are launched. 

So yes, Republican governors (and even a couple Democrats, looking at you, Missouri's Jay Nixon) are trying to do everything they can to break the system.  The same people saying "Give us control of Medicaid because states can do things more efficiently" are trying to make state insurance exchanges as inefficient as possible in order to harm as many people as possible, believing they will then rise up and demand an end to Obamacare.

Sure worked for Mitt Romney, huh guys.  And let's not forget there are actual lives at stake here, too.  It doesn't seem to bother these governors much, either...and with blue states where federal taxpayers foot the bill like California, New York, and Illinois, it's interesting to note that it's the poorer red states who are expecting federal handouts here to build their exchanges for them.

Which side has a problem with "takers" now?


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