It's not the skills gap: why so many jobs are going unfilled

I did some quick calculations to understand their stated problem of needing to higher 40 more people since it is costing them millions in lost revenue each month. &quot;The labor shortage is costing the company some $3.8 million per month, said Marty Davis, the company’s president and CEO.&quot;<p>$3.8 million * 12 months = $45.6 million per year in lost revenue.<p>Being conservative and assuming a 10% margin on their revenue figures this is a loss of $4.56 million for the firm for the year.<p>$4.56 million divided by their labour need (40) means each worker brings in $114,000 of margin. So as long as they pay below that they are ahead. If they paid $25&#x2F;hour for 2000 hours a year ($50,000) plus a 1.4 gross up for benefits they could hire people at $70,000 ($50,000 * 1.4) and still earn a positive margin of $44,000 ($114,00 - $70,000) leaving them $1.76 million of income. ($44,000 * 40).<p>What do they expect when they pay $36,000 per year (18*2000), plus any benefits?<p>I’ve heard this stated before as there doesn’t seem to be a labour shortage just a shortage of labour that you want to pay very little for. We don’t say there are too little lawyers or investment bankers or management consultants. Those jobs are or used to be the highest paid bringing in lots of supply from eager graduates.

<p><pre><code> “We always have difficulties filling this position because we require specific experience in test engineering in the electronics industry. There might be total of 150 qualified people in the Midwest!” said one employer of industrial engineers. To Hine, the focus on work experience suggested that employers were being too picky. They wanted to hire someone who could be fully productive on day one. But at the same time they weren’t willing or able to pay enough to attract that perfect candidate. </code></pre> I&#x27;ll leave the similarities between this and our industry to the reader...

&gt;In many places, employers are also setting wages too low, defining qualifications too narrowly, or not recruiting widely enough. Many people who are eager to work can’t because they lack transportation, or don’t have anybody to watch their children during the workday.<p>Well, I think that&#x27;s a perfect summary. Employers either need to pay up, or pony up taxes to local governments to pay up. A competent, polite, punctual workforce doesn&#x27;t happen all on its own, and trying to dragoon people into one through poverty mostly just leaves you with unusable, crappy labor and low productivity growth.

I was also curious that there was no mention of health insurance. I have observed that my own family is paying considerably more for health insurance while actually getting significantly poorer coverage when compared to a decade ago.<p>An employer like those described in the article wouldn&#x27;t necessarily need to offer a significantly better wage than what was indicated if they provided a higher quality health care plan and payed a greater portion of the premium. And, offer fully paid dental insurance.<p>In the end I guess it comes down to money one way or another for the employer.