Rising Pay, Falling Skills: Like The US, India Faces An Employment Paradox
Young engineers avoid factory jobs for IT and government roles, leaving manufacturing with skill shortages despite rising salaries and abundant opportunities.
The Gist
Widening Skill Gap in the Workforce
- Experts point to a significant skills deficit in the U.S. workforce, particularly in manufacturing and trades.
- Rich Garrity noted that educational programs often fail to keep pace with technological advancements.
- The challenge is to enhance the attractiveness of physical jobs while improving training opportunities, especially for young graduates.
Ford Motor CEO Jim Farley told a podcast in the US last week that he couldn’t find enough skilled mechanics to run his auto plants.
Ford, Farley said, was finding it difficult to fill 5,000 mechanic jobs that pay $120,000 a year.
The Wall Street Journal quoted Farley as saying that the automaker was struggling to hire mechanics at salaries that Ivy League grads might envy.
“We are in trouble in our country. We are not talking about this enough,” Farley said. “We have over a million openings in critical jobs, emergency services, trucking, factory workers, plumbers, electricians and tradesmen.”
Clearly, the problem isn’t limited to the automotive sector.
Widening Skill Gap
Elon Musk, who is reportedly back to being buddies with US President Donald Trump, weighed in as well: “America has a major shortage of people who can do challenging physical work or who even wish to train to do so,” Musk said in a post on X.
The post made it to Indian news and social media platforms as well, with reactions split between commiseration and criticism. Some pointed out that they were willing to do any job, but were not getting the opportunity, particularly in the United States.
The problem, of course, is more nuanced. In a rare moment of candour, President Trump summed it up neatly. He told a Fox News interviewer last week that you can’t pull people out of employment lines and make them produce missiles.
In other words, just because a job involves manual labour does not mean you have the specialised skills to do it. You have to develop the skills before you can even pitch for high-skilled roles like this.
Rich Garrity, a National Association of Manufacturers board member, believes that much of the crisis stems from a skill set deficit, due to a lack of concrete foundational training courses available for students in the country’s educational system.
“We’re not just missing bodies, but we’re really missing…skill sets that can connect to 21st-century manufacturing needs,” the Wall Street Journal reported Garrity telling the New York Post. “The community colleges, the career tech programs do a solid job in providing foundational training, but we often see that they’re out of date when it comes to keeping up with how fast things are moving from a technology standpoint.”
Degrees Vs Employability
India faces similar problems. India produces about 1.5 million engineering graduates annually, but only about 10% of these 1.5 million engineers could get a job, according to several reports in recent years.
The major reason is the skills gap among engineering graduates.
Worse, most engineers have gravitated towards IT jobs, which are obviously less punishing than the shopfloor of a steel factory or a power plant.
Many engineering company leaders I speak to regularly complain that they are unable to find the right-skilled engineers.
The market is forcing a shift here with IT job hiring slowing down and many IT companies also downsizing. AI is accelerating the shift.
Still, traditional engineering jobs may not be the first choice for many young engineers, however desperate the situation might be.
Even those who are not engineers may prefer to keep studying and take up a government job or wait for years till they can land one.
The challenge, and opportunity, is to make such physical jobs more attractive and also make workplaces a little friendlier, even as we step up training, additionally via internships.
Some of this is already happening, but only in big companies.
Like in the US, compensation is steadily rising for such jobs.
For some time to come, the challenge will be less about job availability and more about employability.
