for anyone "looking for a job", the following equation will almost certainly drive the decision about how much pay will be offered:
(fees/expenses) + ((skill-sets+need)/availability) = rate x (duration of project)
or some variation thereof. in shorthand: the rate's driven by a combination of the fees and expenses (direct costs) of a project, combined with what skills are needed and the availability of people who possess those skills. in classical economics, if the skill-sets are rarer and in higher demand (say, someone who can design a BL-4 lab in their sleep, combined with a sudden rise in the number of BL-4 labs needed to combat the coming zombie apocalypse), the pay that worker can obtain will be higher than someone who possesses more common, average or less quantifiable skills.
at least, that's the longstanding theory.
over the past 10 years (but acutely over the past 3 or so), manufacturing sectors have lamented the so called 'skills gap' between what they've looked for in a worker and what's available. adam davidson, of planet money, laid waste to that myth in a recent editorial:
"Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour. (emphasis mine)
The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages."
this kind of shift isn't limited to traditionally 'blue collar' jobs, at least within the advanced industrial economies. in short, a confluence of vastly improved technology infrastructures have opened up a truly global market for skilled workers, especially in white collar jobs (outsourcing for the professional set). i've lived this with my software project - we've hired programmers from vietnam, india and the phillipines, all online, all remote, all without ever having met them. and, all for about 1/10th the cost of hiring someone here.
now, there's no absolutes here: highly skilled workers are hired all the time and paid handsomely for it. and manufacturing isn't the same as a service industry. but if this is the canary in the coal mine, it begs a few questions:
does this kind of extreme push (more specialized skills for less pay) translate between industries/professions?
is there any long term correlation between fees/income and the operating costs (salaries predominantly) in terms of rising/falling amounts?
most importantly: what skillsets are truly driving value in the service economy? ie, what's truly creating rising income in terms of fees?
have we truly replaced lower skilled labor (draftsmen) with entry level professionals? (i'm contending it's been this way for the last 20 years at least but still asking the question) if so, is this because we've sold ourselves that way? ie - we're selling ourselves as the raw production instead of something with a higher value?
how do we avoid the race to the bottom?
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