Given the responses of the employers in our four labor communities, the most serious deficiency of the existing educational system is the preparation in basic academic skills--math, reading, and writing--of new employees. The volume of complaints about basic skill deficiencies has been deafening, and the anger and bewilderment of employers finding themselves with unprepared employees is unmistakable. As we have seen, employers often lump together cognitive skills with motivation; persistence; the ability to work cooperatively; and other personal characteristics that are more difficult for educational institutions to impart in the way they teach reading, writing, and arithmetic. Still, the deficiencies in basic academic capacities are unmistakable and for many employers constitute the most serious threat to the future of the labor force.
A second problem with the effectiveness of the current education system for employers is simply that employers do not rely on it much. Overwhelmingly, where they have choices, they hire on the basis of experience, and preferably experience specifically related to their own production methods and processes. In part, this occurs because of the enormous variation among firms in the nature of production, making it impossible--as some employers acknowledged--for any educational institution to provide specific enough training to satisfy any particular firm.[107] In part, the reliance on experience reflects the value they place on motivation, persistence, interpersonal skills, and other personal characteristics which are better reflected in job histories than in formal schooling. In part, the reliance on experience rather than formal education suggests a fundamental mismatch in the sub-baccalaureate labor market: Community colleges and technical institutes are busy developing technical skills in their occupational programs while employers are looking for quite different characteristics when they decide whom to hire. Again, the exceptions to this pattern come in organized labor markets like health occupations, in occupations like electronics where community college preparation has become common (at least in some labor markets), and in co-op programs like those of Cotooli--all special circumstances that could be extended to a broader range of occupations.
A third problem for employers in the sub-baccalaureate labor market is that the incentives that education providers face are inconsistent with the incentives employers can provide. Community colleges and technical institutes provide programs and courses when their marginal benefits--state reimbursements and tuition--exceed their marginal costs. Therefore, programs with high costs are more difficult to expand than are low-cost, high-demand programs--ESL, for example--and programs in high demand by employers will still not operate if student demand does not materialize--as happens with low-status programs like machining, for example, or with poor information about long-term benefits. Thus, shortages in particular occupations can materialize because education providers are enrollment-driven rather than demand-driven.[108]
A somewhat different kind of mismatch between demand and supply involves the timing of decisions. Employers complain about the sluggishness of educational bureaucracies and about their inability to change educational programs to keep up with changing technologies and changes in the mix of occupations. Community colleges also complain that employers do not provide them the right information or could not forecast their employment needs adequately or kept their employment requirements secret for competitive reasons. While there may be blame on both sides, then, the fact remains that the sub-baccalaureate labor markets cannot respond to changes very well unless employers provide the relevant information and educational institutions respond in reasonable periods of time.[109]
Other complaints about education providers focus on the obsolescence of education and equipment. In a period of rapidly changing technology, it may be impossible for community colleges to afford to change their equipment to keep pace with employers, and a cooperative program may be the only solution. But in other cases, obsolescence seems to be caused by educational institutions failing to keep abreast of changes in work, and closer relations between employers and providers would be appropriate as mechanisms of information sharing.
There are, then, several ways in which the supply of skills to the sub-baccalaureate labor market is inconsistent with demand by employers. With some exceptions--the cases of electronics programs which are widely used by employers, organized labor markets like health occupations, and the co-op programs prevalent in Cotooli--the dominant image is that of two nonintersecting worlds in which providers of education and training and the employers of sub-baccalaureate jobs have little knowledge of each other.
[107] There is a conventional economic argument that public institutions should not provide such specific training but should provide only general education that individuals can use in many jobs, including the basic academic skills which appear to be so deficient (see Becker, 1975, Ch. 2).
[108] There are other complaints about shortages that appear as a result of employer policy rather than educational institutions: The complaints about shortages of machinists--where employers pay little more than the minimum wage for entry-level machinists and where layoffs over the business cycle are common--are good examples, where students do seem to respond rationally to the lack of long-run benefits within this occupation.
[109] The problem of response time is also a problem in baccalaureate-level labor markets, of course, since it takes so much time to educate a cohort (see Freeman, 1971). This kind of lag should be less serious in the middle-skilled labor market since programs take one or two years rather than four years or more.