Vocational Training

The booming economy needs more skilled labor. That means wages are going up.

"Pressure is building for employers, and both hard data and anecdotal reports indicate that wage pressures are building,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, said in a note. “With the economy still humming, employers are able to justify stronger wage increases to retain or attract talent, but it’s becoming a more challenging proposition.”

A 'skills mismatch' is exactly what we have been told to expect for decades as automation changes which jobs do or don't need to be filled with people. So you need to retrain people for the jobs you have now, not the ones they did before. There are a number of ways to address that challenge. Labor unions do a lot of training, in spite of the negative press they tend to get on the right. So one option for companies who need electricians (say) is to go to the IBEW. In return for a collective bargaining agreement, the union can make sure that skilled labor is available as needed. Of course, that means higher wages and benefits -- but from my perspective, higher wages and benefits for US workers is an ideal outcome.

Alternatively, a company may decide it doesn't want to bargain with a union. It can then invest in its own training program. Workers who come to work for such a company won't necessarily receive higher wages or benefits, but they will receive marketable skills. Once they have satisfied whatever contractual obligation the company puts on them in return for their training, they can compete for higher wages and benefits using those skills.

And of course, vocational schools can allow workers who have access to some capital to invest in themselves, recouping their training costs by competing for wages directly. Companies can also ally with such schools, covering the costs for training (and probably bidding for a lower tuition rate in return for regular business) in return for a worker's commitment to work for them for a period of time.

These are all solvable problems. They're good problems to have. All the solutions -- except one -- point to a more skilled, better paid American worker. The only thing to avoid is allowing these companies to import labor at higher rates, so that they can avoid paying higher wages, higher benefits, or for training more skilled American labor. If we can do that, our working men and women will begin to see their lives getting better.