After referring to David Brooks as the “Bard of the 1 Percent,” I was assaulted with a barrage of threatening letters and phone calls from representatives of Thomas Friedman who insisted that he holds this title. I will let the two NYT columnists slug it out between themselves and deal with the substance.
In Sunday’s column Mr. Friedman inadvertently warns us about the potential economic risks this country suffers from being run by incompetent CEOs. Friedman recounted a conversation he had with Chicago’s new mayor, and former Obama chief of staff, Rahm Emanual. Emanual reportedly told him:
“I had two young C.E.O.’s in the health care software business in the other day, sitting at this table. I asked them: ‘What can I do to help you?’ They said, ‘We have 50 job openings today, and we can’t find people.’ ”
Friedman then goes on to add:
“Doug Oberhelman, the C.E.O. of Caterpillar, which is based in Illinois, was quoted in Crain’s Chicago Business on Sept. 13 as saying: ‘We cannot find qualified hourly production people, and, for that matter, many technical, engineering service technicians, and even welders, and it is hurting our manufacturing base in the United States. The education system in the United States basically has failed them, and we have to retrain every person we hire.’”
While Friedman favorably quotes Emanual describing this as, “staring right into the whites of the eyes of the skills shortage,” the most obvious shortage of skills in this story is with the CEOs. Competent CEOs know that in a market economy you attract good workers by offering higher wages.
This is known as the principle of “supply and demand.” If the demand exceeds the supply, then the price of the item in question is supposed to rise. In this case the item in question is labor. If these companies were run by competent CEOs then they would be offering higher wages in order to attract the workers that they say they need. If they offered high enough wages people would leave competitors to work for their companies. They would also move from other parts of the country or even other countries to accept their job offers. In the long-run more people would train to get the skills needed to fill the positions these employers are offering.
However, there are no major occupational categories that show large wage gains at present. This means that if employers really are having trouble attracting good workers then it must be due to the fact that they don’t understand the basics of a market economy. Unfortunately nothing in Friedman’s column indicates that Emanual or anyone else is educating CEOs on how they can raise wages in order to attract the workers they need.
It is also worth noting that Friedman implies that the Chicago school system is desperately in need of the reform that Emanuel plans to give it. Emanuel’s predecessor as mayor, Richard Daley, also placed an emphasis on reforming Chicago’s schools. From 2001 to 2009 he installed Arne Duncan, currently President Obama’s Secretary of Education, as head of the Chicago school system. If Friedman and Emanual’s complaints about the current state of Chicago’s schools are accurate, this would imply that Duncan must not have been very successful in his tenure even though he was widely acclaimed as a reformer at the time.



56 Comments

TomDavid FriedmanBrooks is an imbecile
Oberhelman is full of shit. Caterpillar dodn’t have such a “need to retain everybody we hire” when it was hiring scabs and putting UAW people out of work. If his workforce blows it’s because they got rid of the skilled union employees.
Believing anything that comes out of Scahm Emmanuel’s mouth is the foundation for serious problems. I feel confident that he will prove to be a greater crook than either of the Daleys who preceeded him as Lord Emperor of Chicago.
Friedman is proof the NYT is incapable of embarrassment.
Utter fucking credulity is apparently the hallmark of a good reporter in whatever Bizarro Flatlandia J-school Tom Friedman attended.
Why does this dimwit still have a job again? Are there really people in responsible, decision making positions who read this shit and STILL think that’s a good idea?
I know, I know — dumb question.
Sorry, Bard of the 1% title belongs to Obama.
He takes nearly 16 million from Wall Street (50% more than McCain), hires Wall Street guys in his cabinet, enacts their policies and then pretends to be against Wall Street.
One figures that his latest rants about taxing the millionaires and Billionaires is geared to sound so insane that it is guaranteed to keep it from ever happening.
All those speeches clearly qualify him as the Bard of the 1%.
And Just(ly) WHY (other Than GREED) should price rise, if a commodity is in short supply? JEJUNE Without rejoinder!
Look,
I have heard the same thing from many small businesses. They simply cannot find the basic skilled labor that used to be the mainstay of manufacturing. It isn’t wages. Welders make a good wage. But nobody wants their kid to grow up to be a welder. Nobody goes to college to learn how to be a welder, they all want to be graphic designers and Comparative Lit majors…and who is to blame them? We have told them this is the upwardly mobile path in America. Whoops! And as manufacturing leaves our shores there are fewer and fewer skilled journeymen (once a title of pride) to teach them. So we have PhDs. flipping burgers.
Very good post, and long overdue.
The real critical shortage of good CEOs and political leaders in the US is killing us right now. Labor costs in most manufactured good is a low percentage of the total cost, typically about 7% of the product. Thus outsourcing for lower labor costs was almost always a loser for the company in the long run (but a good looking talking point in a screwed up Wall St that rewarded short term thinking). China is very good at stealing technology such that most companies that outsource to China can almost count on creating a state sponsored competitor that will ultimately steal the market.
But then, most current CEOs are not in it for the long run, they’re figuring out how to loot the most money out of the company, and if that ends up killing the company and screwing the shareholders, well, too bad.
Combine all this CEO raiding and pillaging with a leaders in government that kills government R&D (the largest driver of innovation in the US by far), kills our public education system, and drives the cost of our public universities out of middle class reach, and you could have easily seen that our CEOs have been killing our industrial base for a long time now.
Bottom line is these people really don’t give a shit about the future of this country as long as they get a big pile of loot.
PBS and NPR have been shilling for the `structural unemployment’ crowd for months.
The latest.
The ‘Public Education system is broken’ meme is a lie meant to enable those in the private sector who would over its budget, but won’t really improve anything for our students. It also provides cover for those who outsource our jobs to countries with less environmental regulation and low-wages for workers.
The ‘our kids can’t compete because of lack-of-skills’ meme is a lie meant to enable those in the private sector who would take over its budget, but won’t really improve anything for our students. It also provides cover for those who outsource our jobs to countries with less environmental regulation and low-wages for workers.
The lack-of-skills meme is also meant to reinforce the fallacy behind the necessity of providing more H1-B visas that allow American business interests to import foreign workers who they can pay less than their American counterparts.
All so-called bards of the 1% are in reality, useful idiots, and/ or frauds of one sort or another.
Friedman fits the bill in every category.
This whole article misses the point. It’s not about the money. It’s about the POWER. The CEOs running this country now don’t care about skilled workers; they want the power to be able to control everyone else. They want, in short, feudalism.
Paying workers good wages is a sure fire ticket to workers gaining more power at the upper class’ expense. That is the lesson that class of people learned from the New Deal through the Seventies, and that is what they have been applying for the last generation.
And that is why OWS was born.
I live in a region of the country dominated by Navy bases and the ONLY nuclear certified Navy shipyard. They have very good programs to make welders, millwrights, machinists, toolmakers, electricians, technicians, even engineers. These programs are extremely popular (the kid across the street is in the welding apprenticeship). Why? Because they will pay them a real living wage when they graduate. There are very few other industries in the local area because “these jobs pay too much”.
If you want good people – pay them good wages.
News flash, Bucko, you’re supposed to train your employees. You plan and budget for it. Now they want people to pay for their own training, on their own time. And take the risk that the training they get isn’t what is wanted when they finish.
Anyone remember companies paying for you to get a graduate degree? I do.
Oh pshaw. Expecting pols to make sense or tell the truth, or even recognize either if they saw it. Shame on you. /s
In my 30 years on Wall St., I had yet to see a manager or a CEO that had the intelligence he was born with. Stupid as rocks, all of them, including Brady Dougan, now head of all of Credit Suisse, who I had a standing “risk” (LOLOLOLOL) committee weekly meeting with when he was head of Equities at CSFirst Boston.
My description is: they got up every morning, put on blinders, and did the same thing they did the day before. When the financial markets turned down, they fired workers, patted themselves on the back, paid themselves a reward, and extorted welfare from the Treas Sec.
In regards to the truck driver shortage, note that a career change to truck driver does not suit many/most people with children where both partners have to work and share in child raising unless the position is a local delivery job where a driver can return home every evening
I think another issue is also the state of corporate human resources… they probably cant fill those 50 positions because of some BS standard HR has set and they disqualify people who might actually be excellent hires.
My own personal expeirence the last 20 years is that if I deal with the actual people I would be working for or with I nail it and get the offer. If I have to deal with an HR dept its a black hole.
My sister’s husband is a highly skilled welder and there should be absolutely no shame or stigma attached to that job. However, he cannot find work in his area (economically battered North Alabama) and has not had a job that doesn’t take him far from home for many, many years. He does make a good wage, but he has to pay for his housing at these jobs (among other things), and what little insurance coverage the jobs provide for him and his family have extremely high deductibles. And often there is a gap between these jobs during which he has to sit at home with no income until the next one comes his way. So despite making a very high hourly rate, he’s still close to the bottom economically.
The trouble you describe can be traced back to the era when corporate creeps decided to relabel their Personnel Departments as Human Resources.
The CEOs of these companies are complaining that they can’t get *cheap* qualified labor and so they want to pull the levers of government power to get access to cheap foreign labor markets, screwing us.
As for Arne Duncan, what do you expect when you put a Harvard blue blood in charge of public education? The man probably has all but never set foot on a public school campus and felt personally soiled on the occasions he has. This is one of the big complaints that can be made about the Harvard Administration er the Obama Administration – it takes its highest ranking members from the narrowest, most elitist slice of society available, and puts these members in charge of public agencies that are supposed to value and understand the mission of serving those less fortunate than Harvard bluebloods.
Good information that needs to be part of our progressive talking points. When they say they can’t find labor, remind them and the public of their beloved supply and demand claims. I hear so many middle class friends say what we heard in the Big D. “there is plenty of work, people just don’t want to do those jobs.”
I only watched a part of Fareed Zakharia’s GPS today (from nausea at Steve Forbes) but he and the other Wall Street hack were blaming the recent meltdown on government regulations, the lack of them described as too many loopholes in law and Fed monetary policy that made it easier for the (stupid) bankers to exercise bad judgement. Fortunately Krugman and Chrystia Freeland were there to dismantle some of their claims.
Reminds me of my Congressman Tom Graves whose default on a large loan brought down a small bank. “It was their fault, they should have known I was a bad risk.”
It all seems obvious to me how they are writhing trying to slip out the keyhole of logic.
As far as I know the only Immigration bill before Congress is to permit Bill Gates to import and employ more cheap technical labor from India.
When people are given bonuses even as they bankrupt the company, it is no surprise that they do not worry about making the right decisions. CEO’s who’s pay is a percentage of the workers would be sure that the whole company does well. Any manager knows that happy employees show loyalty and perform well, while overworked and underpaid employees steal and sabotage. Also many managers do not offer guidelines for what is expected of employees, with reasonable expectations, and structures to deal with problems. Many managers make vague demands and hide in the office, then act clueless when there is a problem. Others make unreasonable demands, without providing the necessary ingredients to accomplish those demands.
Incredible as it seems, Friedman has a point, albeit one of limited usefulness. I’ve had what is usually referred to as a “checkered career,” working a variety of jobs on the side to supplement my always variable writing income. And every corporate manager I’ve ever worked under has been a functional nincompoop. The extreme example came during my (mercifully brief) stint in corporate banking. I worked with several V.P.s, one of whom could not read and write. Quite literally: each morning his assistant had to read his mail to him out loud, then compose responses as directed. (I know this because once or twice when the assistant was off I had to fill in.) He was a country-club club white guy, a former college jock, and he was brilliant at talking sports with the higher-ups. That was all that was necessary to advance in that bank and, I can only assume, in others as well. With people like that running the banking industry, is it any wonder the economy’s going down the tubes?
Of course, the wider tragedy is that Obama and his fellow Republicans in Congress, as steered by their Wall St. pals, think that pumping more no-strings billions into the pockets of such people is all it will take to fix the country. To which this lifelong atheist can only respond, God help America.
On some thread a long time ago (a year or longer), CEO compensation was the subject. A general Q was asked about just how to evaluate CEOs contribution to the corp. I suggested that, as they are just employees, one might start by treating their comp as such. One might give them a grade rating (e.g., if the highest existing grade is 20, grant CEOs a grade level of 25, oh heck, be generous, give them a 30), and allocate pay accordingly.
What a quaint idea that would be.
Paying higher wages for good help only applies CEO’s. It’s akin to contracts are only enforcable when a union isn’t one of the parties involved.
hey Tommy F…it your head that is flat, not the world! I saw big Tom on the DR show a few weeks ago and he seemed lost as what is going on in the world….but the media keeps putting him on…thank god for RT
Thank you! I’ve been saying all along our PTB just aren’t that smart. This may be an extreme example, but if ANY bank hires an idiot like that and promotes him, that speaks volumes.
Freidman is a con man. He earns his living writing screeds and making guest appearances to tell anyone who might believe that up is down and hot is cold. He thinks that the earth is flat.
Freidman would have stood with the Catholic Church in the condemnation of Galileo. Friedman is attracted to power – right or wrong. Friedman lies for the one percent.
What did Friedman say about Iraq? That we should kick their asses? Or annihilate them?
He is one disgusting and sick asshole. That’s why he works for the man.
dean, much of the artilcle relies on a flawed principle and concept;
This is known as the principle of “supply and demand.” If the demand exceeds the supply, then the price of the item in question is supposed to rise.
their is no greater relationship between demand vs supply and any other mitigating factor
the only real principle is the principle of demand, supply rarely affects the price for product that is in demand
for instance, there are more nikes then anyone can buy, they cost pennies to make, yet they sell for premiums over other sneakers, even those sneakers that have a smaller supply
the demand for nikes not not overeach the supply, the reverse, yet they still sell at premium
now let’s look at instances where the greater supply actually increases demand and therefore price;
if you are buying an item that has a shelf life, you need the item, then you will pay more for the product that is in greater supply then the one you will have to search to find
now for an example where reducing supply lowers the value of the product;
I have a beutiful, incredibly high performance sportscar that commanded resale prices very high compared to other cars in it’s caatagory
the second gm announced it would not be selling the car, the resale value of the car went down not up
the point that I am making is that the principle is simply “demand” not “supply vs demand”
just like weather can affect the price of goods, for instance a bathing suit doesn’t get a good price in the winter, but do we say it’s “demand vs weather”?
no
so the age old principle of “supply vs demand” is not only flawed, it should actually be ignored almost in it’s entirety
I am in the construction industry, and I know welders are dying & begging for work.
I’ve heard that meme for some time and it does not ring true; no one was complaining about a lack of welders 5 years ago.
I’d posit even further. If these CEOs were competent then they’d be TRAINING people or paying for the training of the skill sets they need. If you need someone who is skilled in soldering or welding send folks to soldering school or welding school. Don’t expect them to be the only one to pick up the tab for it.
Since when is the education system responsible for training someone to weld? Uh, uh. Our education system is meant to train to read, write and do rudimentary math.
Pssst Mr CEO. Why not offer to send people to school with the understanding that there would be a contractual obligation of x number of years at following completion like the military? This way you recoup your money and the individual has a job guarantee.
The problem isn’t that people lack skill sets as much as it is that CEOs want responsibility to fall all on the back of labor. They truly don’t understan that it’s supposed to be a give and take relationship, not a take and take relationship.
Love the Bard of the 1%, that’s really good. When I saw Obama reading his book I knew we were in big trouble. Friedman could not be more of a drooling idiot and apologist for the 1% worldview. Hot, Flat and Crowded and other drivel he’s written that passes for astute political commentary among our moronic political class, presents the world they are designing for us as if it is inevitable and wonderful. Free trade and globalization – inevitable! Wonderful! So what if you can never find a job, you don’t deserve one because you don’t have a Harvard degree in basket weaving. Eat your peas. Eat shit and die peons. That’s their message.
Hey, let’s just go back to the Triangle Shirtwaist business model:
employees provide their own needles and thread! Because why should materials be a cost of doing business!
serfdom, here we come.
Notice the “brilliant” CEO wanted “hourly” production people.
Yeah…all those skilled people, so picky! Wanting steady full-time work that qualifies for health care coverage…
Yes this is a problem in our society, too many managers not enough people doing actual work. Top heavy with bureaucracy and make work. Why do people not want their kid to grow up to be a welder? Where did this elitist bullshit come from? The world does not need more liberal arts grads. And yes, now that the 1% have sent manufacturing to emerging nations, and exiled vocational training from our schools, there are no paths to learning trades and hands on skills. The rule of the MBA changed all that. I contend that the failure of our corporations is because the people who run them have no idea what they are managing. It’s the cookie cutter model approach that doesn’t work. Well, it’s all going down the tubes, PhD’s will be flipping burgers if they are lucky. Somehow I can’t work up the sympathy being someone who could not afford college (there were no student loads at that time) who had to work their way up from the bottom and did. If you have a degree and won’t take a real job, shame on you. Get a job and stop sponging off your parents.
Yep. Shifting the costs of business onto labor seems to be the new norm.
Your supposed to walk in with a bunch of debt and no guarantee on benefits, wages or even how long your job will remain in this country.
Boohoo, Catepillar can’t find workers because schools aren’t teaching welding sufficiently. Since when was welding even a prerequisite for passing High School?
Keep up the fight. Take a tip of the hat from a guy who crusaded nearly 50 years in the newspaper arena.
Apparently that program was taped earlier this week. Krugman complained on his blog about what idiots the “panelists” were. [Well, complained in his quiet, polite way.]
Friedman is married to a billionaire heiress.
Every one of his columns or tv appearances should note that point.
Bingo!
He has reason to complain. It was awful. I used to have some respect for Zakharia but he has turned Randoid lately. Perhaps from pressure from corporate pressures?
Raise wages?
What an old-fashioned, mid-20th century, answer to a problem that these CEOs already have a better response to. That plan is to lower wages everywhere so that even the most qualified workers eventually have no choice ut accept subistence-only wages. It’s called “Right-to-Work”, it’s called “Free Trade”.
These CEOs aren’t incompetent. Far from it. They’re winning. It’s the rest of us who have incompetent leadership. We’re losing.
I want to add to my previous post that indeed, companies SHOULD bear some of the cost of training workers to specific skills.So should society, after all, we collectively benefit from a well trained fully employed workforce. And we are quite capable of it… It is a great thing when high paying jobs drive out low paying ones. The vast majority of blame for our current dilemma cannot be laid at the feet of an ill trained workforce (though that doesn’t help). I have a stepdaughter who graduated w/ a 3.5 GPA major in English from the University of Washington. Reading her letters is a painful return to the eighth grade. When she applied for a $12/hr at-will receptionist’s job (in Seattle!) she competed against 200 others, many with master’s degrees, the HR exec assured me. Welders make twice that. I also saw kids take out $30k of loans so they could work as line cooks for about $8/hr. They all dreamt of being “Iron Chef”! Well, I hope so. But somehow we have failed in the most important task every generation has, sowing the field for the next.
Since when is a parent supposed to pick a child’s career? The whole entire meme is a false one. Parents want their children to be happy and successful-period. If parents aren’t equating welding with that I would imagine that it’s because the PTB have been touting the concept that the way to achieve success is through a college education. Furthermore, these companies have not gone out of their way to advertise that you can attain skill sets outside of college and be successful. No. Instead they’ve gone whining to the government to allow them to import labor.
I’d go further. Any company that doesn’t offer a regular employee severance ought to lose the golden parachute or buyouts and any company that offers. Companies that offer “bonuses” should be distributing them at all levels. Not just at the top. Since when should anyone be rewarded for tanking a company or making bad decisions? And why shouldn’t every person responsible for the profitability of a corp. get at least a small share of the benefits of profitability.
Regular workers have been operating under the stick method for years. Why should the CEOs subsist solely on the carrots.
If they paid them accordingly then they could “purchase” child care. I have little to no doubt that there are enterprising individuals out there that would welcome watching a child but they’d want to be compensated for it.
Too true. How many articles have we read now where they disqualified unemployed people from the hiring process? Apparently the resources people are too lazy to spend time and screen an applicant to determine whether or not someone is unemployed because of poor work habits or because of a business downturn and decreased demand where they were previously employed.
Dean, If you come back to this post, there is a wonderful article by Melvin Reder in AER (1955), about how tight labor markets caused employers not only to raise wages, but upgrade their work force by providing training, benefits, etc. It’s a classic, and goes right to the heart of the current problem. In a weak labour market, the CEO’s have no real incentive to do anything for their workers, and off-shoring starts looking like a viable alternative to investing in a work force.
Society itself has attempted to pay for it through programs like Pell grants. That being said, the highly paid CEOs then whine about having to pay taxes to support these programs.
The MOTU want it one way- they don’t want to incur any costs and they want to reap all of the profits of a well trained work force.
They really and truly are idiots. That a government sat their straight faced while they whined that the 12 years of schooling didn’t adequetely prepare a person for a WELDING career also doesn’t say much for the state of intelligence in government either. Welding? Assembly?(still shaking my head) I guess we should just drop teaching kids to read and have them pick up a blow torch earlier. Sheesh.
Bard of the 1% – I love it.
The only reason someone can’t find a qualified worker is because they won’t pay enough to hire that person.
This is really an insult to bards everywhere. I like “flunky” better.
I agree with adc14 that this is really an insult to bards everywhere. These (Brooks, Friedman, Emanual) are more like whores.
Exactly what you said on line 3
–Obama knows how to be persuasive and he hasn’t even tried to be when it comes to taxing the ppl who need to be taxed.
If he knows how to be persuasive then he also knows how to make an idea sound foolish without actually saying it.
The hidden text is why I can’t bear hearing him anymore..
all this money in the military….reminds me of the elvis costello song.
“Is it worth it,
a new hat and coat and shoes for the wife
and a bicycle on the boy’s birthday
It’s just a rumor that was spread around town,
by the women and children,
soon we’ll be shipbuilding..
I like “tools”