Alan Tonelson’s blog post today cites a CNBC report on alleged skills shortages plaguing U.S. employers. In an employer survey, 13% admitted that the “shortages” were due to their simply not offering a high enough wage.
Professor Peter Cappelli of Penn’s Wharton School of Business has written extensively on this point, but I’ll add some comments here in terms of the tech labor market. First, though, in order to make things concrete, here are a couple of low-tech examples.
I wonder how many air travelers noticed before 9/11 that each major airport differed in terms of the ethnicity of its baggage security screeners. If you were to fly from SFO to BWI, for instance, you would be served by Filipino immigrants on your trip to Baltimore, and then by African-Americans on the way back. That changed after 9/11, when Congress enacted legislation that (a) required the screeners to be U.S. citizens and (b) substantially increased wages for the job. At SFO, the Filipinos had previously tended to be longtime green card holders who, for whatever reason, had not chosen to naturalize. So positions opened, and lo and behold, there was a flood of applicants from the general population. So here is one job that had been wrongly assumed to be the type that “Americans won’t do,” Indeed, that should have been clear even before 9/11, by noticing the ethnic difference between (for example) SFO and BWI.
Then there is my “hamburger theory.” In California there is a popular chain of hamburger stands called In ‘N Out, in addition of course to McDonald’s and the like. A typical McD’s in California will have most of its workforce consist of (adult) Latinos, of which I am assuming most are immigrants. Yet at In ‘N Out, the workers are mainly teenage Anglos (just like it was at McDonald’s when I was a kid). Why the disparity? Last time I checked, the wage at In ‘N Out was about 25% higher.
It’s not just wages. Many jobs are filled through word-of-mouth via social networks, hence the mainly-Filipino SFO screeners and the mainly-Latino workers at McDonald’s. But as with most things, money plays a big role.
In the tech labor market, especially for software engineers, there is a rampant age discrimination problem, as noted in the congressionally-commissioned NRC report, and discussed in an excellent recent Fortune piece. Though some of this is directly age-related, in which the 20-somethings aren’t comfortable working with those over age 35 (yes, I said 35, not 55), it again boils down mainly to employers simply not wanting to pay wages normal for a 35-year-old.
And even though a 35-year-old might be willing to take a pay cut, HR will likely screen him/her out, having set the job at entry-level. The 35-year-old will then be rejected without even a phone interview, on the grounds that he/she is “overqualified.”
And simultaneously UNDERqualified. It will be claimed that this older applicant doesn’t have up-to-date skills. Let’s see now…the applicant is both overqualified and underqualified. Only in Silicon Valley would such a Kafka-esque assessment be made.
One aspect of this that I like to point out is that this notion of a tech skills shortage can lead to contradictions so blatant that even a child could spot them. The tech firms say they’re forced to hire only the young new graduates, as only they have the latest skill sets. Well, now…who TAUGHT those new graduates the modern skills? It was old guys like me! So it’s absurd to say only the young’ns know Python, to cite for example a claim made by the San Jose Mercury News last year.
Another problem with that employer survey Alan mentioned is that if managers were among the respondents, many would sincerely assert a skills shortage–without realizing that HR is not sending them the CVs of older applicants who do have the skills.