Paul Krugman of The New York Times wrote this morning that our jobs crisis can't be explained by workers not having the right skills, since all industries seem to be in a funk:
[I]f there really was a mismatch between the workers we have and the workers we need, workers who do have the right skills, and are therefore able to find jobs, should be getting big wage increases. They aren't. In fact, average wages actually fell last month.
I'm not fully buying it. First, only an economist can explain the individual parts by citing the average. This is the equivalent of saying it can't possibly be cold in Ottawa because average global temperatures are rising.
There are plenty of occupations where real wages are rising, and not just over the last month, but during the three roughest years of the financial crisis. Some quick research from the Bureau of Labor Statistics shows:
|
Occupation |
Real Wage Gain, 2007-2010 |
|---|---|
| Farm product agent | 12.7% |
| Chief executive officer | 9.5% |
| Legislator | 8.6% |
| General practitioner | 8.2% |
| Petroleum engineer | 7.4% |
| Mathematician | 5.2% |
| Pharmacist | 5.5% |
| Finance manager | 5.1% |
| Civil Engineer | 4.4% |
| Registered nurse | 3.4% |
Source: Bureau of Labor Statistics.
There are many others. This is a small sample.
One can, of course, argue whether these raises count as "big." In general, they aren't, but compared with broader wage gains (or declines), certain fields are doing far, far better than others. Skills matter.
Last year, Google (Nasdaq: GOOG) handed out 10% raises to all its employees, along with $1,000 surprise cash bonuses. Why? Because its employees have skills -- skills other employers would love to get their hands on. This bit, from a recent Wall Street Journal article, was eye-opening:
Another way that Google finds candidates is through its internship program, which pays top-flight undergraduates about $6,000 a month, according to two current interns. The company has 1,000 technical interns this summer, a 20% increase from last year, said Stephanie Chenevert, a manager of engineering talent and outreach programs at Google.
Alexander Blessing, a master's candidate in computer science at Stanford, said that he turned down internships at both eBay and Facebook to work with Google's people analytics team this summer. Google will pay him $8,000 a month, more than Facebook's offer of $7,500 and eBay's $6,000.
$8,000 a month. For an internship.
All of this highlights a defining feature of our economy: The average is terribly misleading. Many people are doing terrible; many others are doing better than ever. Yes, for every Google, there are a dozen General Motors. For every farm agent, there are thousands of dwindling manufacturing jobs. But that's the point: Skills matter. Products matter. Industries matter. The economy can't be lumped into one ball of mutual misery.
