Friday, September 28, 2007

Erie's Talent Crunch

Outside Erie cites an article in the Erie Times-News about a local labor shortage. I'm struggling to understand why regions are framing this problem as both a lack of local talent and non-competitive wages. I did discover another piece to this labor mobility puzzle:

When GE Transportation advertised for manufacturing jobs early this year, about 5,000 applications were filed for 100 jobs.

The story was different when the company went looking for engineers, GE Transportation Chief Executive John Dineen said earlier this year.

"I needed 100 engineers, and I could only find 10 in Erie," he said. "We have to find them elsewhere."

First, there is evidence of an over-supply of manufacturing labor. But where are the engineers? The problem is that local talent isn't in step with local demand. As a result, Erie-based business must import expertise. Waiting for the retraining of locals is inefficient.

Another issue is the cost of labor. The story lurking below the surface is the ceiling on wages for businesses that compete in a global marketplace. They cannot afford to offer more money in order to attract the talent they need. One solution is business assuming the task of training, hiring under-qualified workers who fit better into the wage structure. This approach highlights the indirect subsidy that labor and the community typically shoulder, education.

I would guess that the cheapest solution for Erie is to subsidize the importing of needed talent.

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