Monday, December 19, 2011

Asserting What Needs to be Argued

Rahm Emmanuel offers a rationale for yet more government spending, albeit state and municipal spending, though undoubtedly of federal monies via stimulus funding, a jobs bill, or whatever expedient the next transfer of red-state money to over leveraged blue states is called.  
The Chicago area has near 10% unemployment, but more than 100,000 unfilled jobs. Like the rest of the country, Chicago suffers from a skills gap that undermines our economic competitiveness and threatens our future prosperity.

Noman has heard Democrats make this claim, and wonders why there is not a migration to Chicago by those with the requisite skills.  There is so much unemployment, and so many skilled professionals who have given up looking for work since 2008.  Americans are a highly mobile people.  Chicago is an attractive destination for professionals.  Is something impeding operation of this market?
Despite stubborn unemployment, we have companies offering well-paying jobs that have to go begging for skilled applicants. This is because our community college system, which was a worker's ticket into employment and the middle class during the postwar boom, has failed to keep pace with today's competitive jobs market. Consequently, in a 21st-century economy, our workers still have 20th-century skills.
Stripping these claims from their shiny packaging, they reduce to the following: (1) companies are dying to pay skilled applicants; (2) there are too few skilled applicants for them to pay; (3) the cause is that government doesn't spend enough money training skilled applicants in community colleges.

For more on the supposed skills gap, see Noman's writeup entitled How Not to Address the Deficit, Aug. 16, 2011, regarding Senators Patty Murray and Mary Landrieu's op-ed on the topic.

Noman has a novel suggestion.  Granting the state of affairs that Democrats depict, ad arguendo, perhaps companies should train their own employees, and not expect government to train them with public money.
For example, AAR Corp., an aviation-parts manufacturer in the Chicago area, has 600 job openings for welders and mechanics but can't find skilled workers to fill them. As mayor of one of America's largest cities, I find it unacceptable that at a time of high unemployment, more than 80% of manufacturers say they can't find skilled workers to hire.
Horsefeathers.  Noman can't even believe that there are not 600 skilled welders and mechanics in the Chicago area, let alone in the country that would be willing to relocate to Chicago.  Moreover, these skills can be learned in garages and small shops by hobbyists and apprentices.  Does the government really need to insert itself into this alleged problem?

Moreover, what are companies supposed to say?  That they are not hiring because it doesn't pay them to hire in this economic and political environment--read, taxes and regulation.  How do people that don't play ball with the machine fare in Chicago?

But, even if it were true, AAR Corp. could profitably train 600 workers in whatever peculiarities the airline industry requires.  If government must help, which it generally shouldn't, why wouldn't tax credits suffice?

What do community colleges have to do with it?
This situation will only get worse. In the next 10 years, the Chicago area will need 9,000 additional computer-science workers, 20,000 new transportation workers and 43,000 new health-care workers, including 15,000 nurses.
Ditto.  There are 10 million people in Chicago.   65% of them are aged 10-65.  They must be pretty sheepish if they need Rahm Emmanuel's, or Barack Obama's, government to help them take advantage of such opportunities.  How did the people of Chicago become so dependent, helpless and incapable?  How did the government become their only hope?
In order to fill these jobs, we need to modernize our community colleges so that Americans no longer regard community colleges as a last ditch effort for a remedial education, but as their first choice for high-skill job training.
Why?  What's wrong with letting corporations fill their own training needs, and maintaining community colleges as what they are: transfer institutions to four year colleges, holding tanks for the undecided, and last ditch weigh stations for remedial education?

The rest of the op-ed goes on to paint an idealized public-private partnership--another Democratic Party obsession--in which corporations design the relevant college curricula.
Chicago already enjoys a dynamic work force, not only because we have some of the world's best universities, but also because we're a magnet for the brightest students from across the Big Ten states. By modernizing our community college system, we are matching that dynamism at every level of the jobs market. Whatever skill level employers need, from the boardroom to the shop floor, they can have confidence that Chicago's work force has the skill and depth they need to start a business and expand.
Since when did it become the purpose of college to train people for the shop floor?

Note that Mayor Emmanuel is talking out of both sides of his mouth.  Chicago has a dynamic workforce.  But, it cant find 600 mechanics for AAR Corp.  It is a magnet for best and the brightest in the Big Ten.  But there is insufficient in-migration to find 9,000 new techies, 20,000 train drivers, 43,000 health-care helpers or 15,000 nurses over the coming ten years.  Which is it?  Because, it can't be both.

William McGurn recently offered an alternative explanation for Chicago's employment problems: Crony Capitalism, Chicago-Style.  He describes the new economy, which operates to perfection in Democratically controlled Illinois: tax hikes for all, tax relief for the well-connected, and campaign contributions for the politicians.

In January, the Illinois legislature approved state's largest tax hike in history.
Alas, equal treatment is not the Chicago way. Maybe that's why we heard little from corporate Chicago when Mr. Quinn [IL's Governor] was campaigning for his tax hikes. To the contrary, back in June the Chicago News Cooperative reported that CME [Chicago Mercantile Exchange] donated $50,000 to Mr. Quinn in the general election and $40,000 in the primary, $200,000 to Rahm Emanuel (a former CME board member) during his run for mayor of Chicago, and $150,000 to the man who really runs Illinois, House Speaker Mike Madigan. 
According to a soon-to-be released study of IRS tax filings from the free-market Illinois Policy Institute, between 1995 and 2008 Illinois lost 345,891 tax filers. All in all, that works out to a $188 billion loss in net income. That loss is remarkable, especially given that one in four of these taxpayers moved to a bordering state.
This is the fruit of Chicago politics. That much should be clear from the governor's election in 2010, when Mr. Quinn won office despite losing 98 of the state's 102 counties—all but Chicago's Cook County and three others in the southwest. These days the governor is highly unpopular for his tax hike, so Democrats such as Mayor Emanuel have become the face of the special relief bill. The constant is that the machine remains intact, here taxing all, there doling out favors to a well-connected few.
Perhaps this explains Mayor Emanuel's zeal for a public-private partnership in the community college sector, and corporations willingness to play along.  In return for offering Democrats protection in their push to augment the big government scam, they not only get taxpayers to pick up the tab for staffing their shop floors.  They also receive special favors at tax time.

Regardless, the mayor has proven neither that community colleges are the cause of the the problem he invokes, nor that they are underfunded.  He has asserted the former and implied the latter.  One might have thought that he could come up with something better given the prestige of the forum that allowed him to make his pitch.

What is it about Chicago that draws organized crime, including the legal variety?

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