Labor Shortages Ahead - No Kidding
IT seems odd to hear about labor shortages in the midst of high unemployment and a stagnant economy.Nonetheless, manufacturers in the United States are complaining about a shortage of skilled workers. And two economists, Malcolm Cohen and Donald Grimes, are forecasting labor shortages later in the 1990s. A survey of 400 manufacturers, released earlier this week by the National Association of Manufacturers (NAM), found that US factories were turning away 5 out of 6 job applicants. One-third of the companies regularly reject applicants because of poor reading and writing skills. About one-fourth reject candidates because of inadequate communication or calculation skills. But to Mr. Grimes, a research associate at the University of Michigan's Institute of Labor and Industrial Relations, that shortage is something different than what can be expected in the mid-1990s. The results of the NAM survey reflect the large number of people looking for work and applying, even if not fully qualified, at any plant with a job prospect. It means employers must weed through more applicants to find a suitable worker. But the manufacturer will fill the job openings with qualified people. In perhaps two years or so, the shortage of workers in some fields could be more real, suspects Grimes. A company might find, say, only 800 of the 1,000 employees it needs for a new facility. Mr. Cohen was to present a paper at the University of Michigan's economic outlook conference in Ann Arbor yesterday in which he picks out the occupations where labor shortages are likely to develop. Most are in health, science and engineering, and computers. With a rapid rise in expenditures on health care, demand for workers in that field grew enormously in the 1980s; and with a population that is becoming older on average, that demand should continue to grow, Cohen figures. More specifically, Cohen lists physical therapists, registered nurses, veterinarians, electrical and electronic engineers, computer scientists and systems analysts, physicians, dieticians, and other therapists as jobs where supply could fail to meet demand. Slightly lower on his scale of potential shortage areas are chemical engineers, other natural scientists, other engineers, biological and life scientists, pharmacists, dentists, and counselors. Down another notch are architects, surveyors, mapping sci entists, legal assistants, college teachers, lawyers, and management analysts. All of these occupations require an education. "The payoff for getting more education is growing all the time," notes Grimes. That payoff is not only in better pay; it is in keeping a job. In Michigan today, only 2 percent of those with four years of college or more are jobless. The unemployment rate for those with less than high school graduation is 20 percent for Michigan - and only slightly less nationwide, says Grimes. Cohen finds that some jobs are in decline, including butchers (machines are doing much of the job), telephone installers or repair workers (customers install their own and throw out broken phones or take them to a telephone company office for repair), typists (replaced by workers doing their own word processing or by machines that read), rail and water transportation workers, and so on. Despite all the business-page stories about layoffs of executives and managers as a result of corporate restructurings and the merger boom in the 1980s, the unemployment rate for such "bosses" has risen from only 2 percent before the recession to around 3 percent now, Cohen says. And that rate will decline with a few quarters of economic recovery. Another change Cohen points to is that only about 11.6 percent of the net growth in the civilian labor force this decade will be white males. That's a net figure: It takes account of more retirements among white males in those years. Similar net figures for white women are 35.7 percent (because women entered the labor force in greater numbers only in more recent years, fewer will be retiring in this decade); Hispanics 27.4 percent; blacks 15.7 percent; and Asians 9.6 percent. Out of all this, Cohen has a policy recommendation: "We as a nation have to be investing more in education to provide the kind of skilled and educated labor force we need by the year 2000." And, he adds, the minorities can't be left out.