Three million open jobs in U.S., but who's qualified?
The following script is from "Three Million Open Jobs" which aired on Nov. 11, 2012. Byron Pitts is the correspondent. David Schneider, producer.
60 Minutes Web Extra
The balance of power in Washington didn't change this week as President Obama and most members of Congress kept their jobs. They'll go back to work and face an unemployment problem that also hasn't changed very much. Every month since January 2009, more than 20 million Americans have been either out of work or underemployed. Yet despite that staggering number, there are more than three million job openings in the U.S. Just in manufacturing, there are as many as 500,000 jobs that aren't being filled because employers say they can't find qualified workers.
It's called "the skills gap." How could that be, we wondered, at a time like this with so many people out of work? No place is the question more pressing than in Nevada. The state with the highest unemployment rate in the country. A place where there are jobs waiting to be filled.
Karl Hutter: Yeah, we hear way too much about the United States manufacturing, we don't manufacture anything anymore. Not true. Not true.
Byron Pitts: Sure, it's Mexico, it's in China--
Karl Hutter: Yeah, yeah, that all went to China, that all went to Mexico. Not true, whatsoever.
Karl Hutter is the new chief operating officer of Click Bond in Carson City, Nev., a company his parents started in 1969.
Karl Hutter: We're still technically a small business, but we're growing quickly.
Byron Pitts: So, you're hiring?
Karl Hutter: We are hiring. We're hiring and we need to find good people. And that's really what the challenge is these days.
Three hundred and twenty-five people work at Click Bond, making fasteners that hold cables, panels and pretty much everything else inside today's planes, ships and trains. Their customers include the Defense Department. The F-35 has 30,000 Click Bond fasteners.
The workhorses in this factory may look old, but they're computer controlled machines that make precision parts, accurate to a thousandth of an inch; the thickness of a piece of paper. Click Bond needs employees who can program the computers, operate the machines, fix them and then check to make sure the results are up to spec.
Ryan Costella: If you look at the real significant human achievements in this country a lot of them have to do with manufacturing or making something.
Ryan Costella is head of Strategic Initiatives at Click Bond. That's another way of saying he's looking ahead to both opportunities and problems facing the company.
Byron Pitts: Sure. So the skill gap, is it across the board? Is it at all levels? Or is it the entry level?
Ryan Costella: I would honestly say it's probably an entry level problem. It's those basic skill sets. Show up on time, you know, read, write, do math, problem solve. I can't tell you how many people even coming out of higher ed with degrees who can't put a sentence together without a major grammatical error. It's a problem. If you can't do the resume properly to get the job, you can't come work for us. We're in the business of making fasteners that hold systems together that protect people in the air when they're flying. We're in the business of perfection. .
Costella says Click Bond ran into trouble when it expanded production and went to buy these machines from a factory in Watertown, Conn. The company didn't have enough skilled labor back home in Nevada to run them, so it bought the entire factory just to get the qualified employees and kept the plant running in Connecticut.
[Conn. worker: You just have to be careful that you don't hit the side.]
Nationwide, manufacturers say the lack of skilled workers is the reason for hundreds of thousands of unfilled jobs; a number Ryan Costella says is about to get bigger.
Ryan Costella: You have a massive wave of baby boomers who are leaving the workforce very soon.
Byron Pitts: Folks retiring.
Ryan Costella: And we have to replace those folks. And that's not even talking about growth.
Karl Hutter: We can't find enough students who are interested in pursuing these trades. Because it seems hard? I don't know. Because it seems like you have to do math? I don't know.
Byron Pitts: Do you think you've done an effective job looking for them?
Karl Hutter: I think we have. I think we really have.
Byron Pitts: How is that possible in this day and age when so many people are looking for work, need work, and you're telling me you can't find people who have the skills to do the job that you need done?
Karl Hutter: And that's the thing that seems like a stumper, right? Of all times, you should be able to find them now.
In the five years before the recession, Nevada had the fastest growing job market in the country. But when the bottom fell out of tourism, real estate and construction, it went from best to worst. In 2010, the unemployment rate here shot to 14.9 percent - highest in the country. And today, Nevada is still struggling with a jobless rate well above the national average.
Ryan Costella says, with so many people unemployed, manufacturers must play a larger role in training workers.
Ryan Costella: I think far too long we've had our heads in the sand, you know. We make our parts. We just hoped that the education system would produce what we need. And I think the recession, I think a lot of things have taught us, "No, you have to engage."
So last year, Costella convinced other manufacturers to design a training program with local community colleges. The plan was straightforward: take unemployed people, test them for aptitude, interview them for attitude, and then train them for open jobs.
[Instructor: Grab the tool, hit the button, to release the tool.]
The 20 handpicked students have different ages, backgrounds and work experience. For them, the training is free and they can still collect unemployment. Ryan Vre Non gets to school an hour early for a study group.
[Ryan Vre Non: So you've got three to the five right here, so it's point oh-two.]
He's been working in warehouses and fast food, but mostly not working at all.
Byron Pitts: How many jobs have you applied for in the past four years?
Ryan Vre Non: I would say in the last year that I've worked, I applied for over 200 jobs.
Byron Pitts: Really?
Ryan Vre Non: Two hundred jobs.
Byron Pitts: And how many callbacks did you get?
Ryan Vre Non: Two.
Jamie Pacheco is married with two young girls and a child on the way. He was a commercial painter, but those jobs dried up with the downturn in construction.
Jamie Pacheco: I like the fact that I have to put my brain to work to be able to apply myself to do this kind of stuff.
The program focuses on the machines found in today's factories. Students are taught to operate the computers, read blueprints, and learn trigonometry to make precise measurements. Almost a year's worth of training packed into 16 weeks.
Most of the students here will start at jobs paying 12 dollars an hour. Skilled machinists can earn upwards of $60,000 a year. For Ryan Vre Non, with a wife and a newborn, it's exactly the kind of job he was hoping for.
Ryan Vre Non: To get the call to actually be accepted into the class was-- right when I hung up the phone I was just like, (CLAP) "Yes."
Byron Pitts: What did your wife say?
Ryan Vre Non: "Oh my God, baby." You know? "You're gonna go to college." It's just like - wow.
Byron Pitts: Life-changing it sounds like.
Ryan Vre Non: Yeah, very. Very life-changing. My whole day is going to be different now.
Byron Pitts: Different how?
Ryan Vre Non: I don't have to wake up and go, "What am I gonna do now?" You know? "Okay, I fed everybody yesterday, but I don't have enough money to feed people today." Or, "I don't know where to step next, you know. What's my next move?"
Click Bond is having trouble finding entry level employees. For manufacturing giants like Alcoa, the challenge is retraining people already on the job to keep up with advances in technology. Alcoa is one of the largest and oldest companies in America. It's been hiring skilled workers since 1888 and, today, has factories around the globe.
At its aerospace plant in Whitehall, Mich., 2,100 employees are working three shifts a day, seven days a week. German born CEO Klaus Kleinfeld says Alcoa's competitive edge is innovation, backed up by a skilled workforce. They're producing parts that make jet engines 50 percent more fuel efficient.
Klaus Kleinfeld: I would love to show you how the air flow goes inside. But that's part of probably the best kept secret that this industry has. That's the innovation I'm talking about.
Byron Pitts: And a person just can't walk off the street and put that together for you--
Klaus Kleinfeld: Impossible.
Kari Belanger came to Alcoa with an engineering degree. The company trained her to program robots to do the work that 50 years ago was done by hand. Alcoa also helped pay for Rod Coley to go back to school and get his engineering degree. He X-rays parts to make sure they're perfect before they leave the factory.
Byron Pitts: What do you say to friends and relatives who may be looking for a job?
Male Voice: Well, me personally, I say, "Get your education."
Klaus Kleinfeld: The environment is changing all the time. And if you don't stay on top of things, you know, somebody will eat your lunch.
Despite its efforts to retrain and recruit, Alcoa has 27 job openings at its Michigan plant alone.
Byron Pitts: Who do you blame for the skills gap in this country?
Klaus Kleinfeld: I don't blame anybody for that.
Byron Pitts: Who bears responsibility for you?
Klaus Kleinfeld: I think it's more an educational aspect. It's-- I think it's a sensitivity to understand what makes a country and a business competitive.
Byron Pitts: I would imagine if you had a parts gap, you'd close it right away, right?
Klaus Kleinfeld: If we had a parts gap, we'd try to close it right away, yes.
Byron Pitts: Then why can't that occur with the skills gap?
Klaus Kleinfeld: Don't get from this that we're sitting together here because our-- because Alcoa is complaining that we can't fill the skills gap. That is absolutely not my message. We can absolutely fill that. Absolutely. I mean, the-- for Alcoa, we can do it. We are doing it. And many of my colleagues or other CEOs are doing it.
Byron Pitts: But if manufacturing is doing all that it can to close this skills gap, then why is there still a skills gap?
Klaus Kleinfeld: Well, this is not a society where you can tell somebody what-- where to go work, or where to-- what education to get, right?
Byron Pitts: Do you think if manufacturing paid more, could that be part of the issue? Part of the equation?
Klaus Kleinfeld: I don't think that manufacturing is not paying well. In fact, I think manufacturing is paying very, very well.
Peter Cappelli disagrees.
Peter Cappelli: This is a market. And so, you know, if you're not willing to pay more, don't expect to get better quality people.
Cappelli teaches management at the University of Pennsylvania's Wharton School. He says -- with supply and demand -- a shortage of skilled workers should lead to rising wages.
Peter Cappelli: One of the things we know now is wages are not going up. In fact, they've been stagnant and some cases even declining over time. So where is the shortage?
Byron Pitts: What's changed in the way that American companies hire workers compared to a few decades ago?
Peter Cappelli: I think there are big changes. And I think this is the heart of what is new. What's new now is that employers are not expecting to hire and train people. If you turn the clock back a generation ago, there really was none of this discussion about skill gaps and skill problems.
Byron Pitts: Because companies provided the training.
Peter Cappelli: Companies did it themselves. Companies are now saying, for all kinds of reasons, "We're not going to do it anymore." And maybe they're right, they can't do it. But what they probably can't do is say, "We're not going to do it, and it's your problem. It's your problem to provide us with what we need, Mr. and Mrs. Taxpayer. You need to pay for this for us."
Taxpayers are paying for training in Nevada, where it costs about $60,000 to prepare 20 students for jobs. Karl Hutter from Click Bond plans on hiring people from the program.
Byron Pitts: If there's something that you want, that you need for your company, then why don't you pay for it?
Karl Hutter: I can't afford to develop every worker that I need from scratch. One, that's not my core competency. I'm-- we're not a school, we're a company. We can't do that well. Two, we can't afford to do that. If we actually had to do that from scratch, even if we could, the jobs would have to go somewhere else, because it's simply not economically tenable to do that.
As part of the training program, Hutter and other manufacturers are willing to pay students for two-day a week internships. Ryan Vre Non and Jamie Pacheco did theirs at Click Bond. Their training, says Ryan Costella, is paying off.
Byron Pitts: Has it saved money? Has it saved time?
Ryan Costella: Well, we have two machine operators who have a ton of potential. They're not requiring major training to make sure that they can do math or problem solve. They came ready to work day one.
Byron Pitts: If you'd hired them off the street how long would it have taken the company to get them up to speed?
Ryan Costella: That question was asked to one of our folks on the plant floor and he said, "Anywhere from a year to two years.
For Vre Nan and Pacheco, it's more than the promise of a job or a career. It means being of value and having a place in society.
Jamie Pacheco: It's expensive machinery and it needs to be treated with respect. And-- you know, I-- myself would feel very privileged to be sitting in that setting and be happy to be a part of what they're doing.
Byron Pitts: You think you'll have a full time job when this is over?
Ryan Costella: Yes. I'm almost 100 percent sure on that. Just because I'm not going to stop. I'm-- I am going to keep going until I get this.
And he did. At the end of the 16 weeks of training, Click Bond offered Ryan Vre Non and Jamie Pacheco full time jobs at $12 an hour with benefits.
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