Jobs and Stuff

A couple of weeks ago I spoke with Timothy Aeppel of the Wall Street Journal. He called me to get some comments about my participation in the YPO Global Pulse, a business survey of the 17,000 CEO members of YPO. The survey measures economic growth and business success by getting a perspective from a large group of CEO’s. Job growth is on everyone’s wish list right now, but slow sales growth, anemic margins, and high productivity are conspiring to thwart any reduction in unemployment rates. Aeppel wrote about the survey results and quoted me in his blog post.

People always ask me, “How is business?” Well, in 2010, it is a little better than 2009, but still a heck of a lot worse than 2008 and 2007. We are clawing our way back, but business will likely never be the same. Of course, it always changes, but 2009 was a major change. The fundamentals are different now. The search for skilled manufacturing labor is even more challenging. Customer pressure is extraordinary. Costs are rising again. Manufacturing companies, especially those in New England, who survive and thrive, will have to reinvent themselves again.

A lot has been written about middle skill jobs. These are jobs that require more skills than a high school diploma, but don’t require a college degree. Examples are machinists, quality assurance inspectors, computer technicians, welders, etc. We have more than 60 positions like this at Horst Engineering. These jobs are viewed as more secure than low wage jobs and easier to obtain than jobs requiring college credentials. This is where the greatest skill gap lies. Our economy needs a lot more people with better than average skills who are willing to make a strong contribution for fair wages. Higher education needs to reform itself. We are over-educating people in areas that have no practical relevance to the needs of many businesses. Arguably, academia is doing what it can to protect academia jobs and keep their own wages from shrinking. What a shame.

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