Whitmer wants to close ‘skills gap,’ but some experts call it ‘a lie’

Gov. Gretchen Whitmer has been vocal about wanting to “close the damn skills gap.” The Democratic governor tends to use the line almost immediately after her signature campaign slogan of “fixing the damn roads.”

Since taking office, Whitmer has overhauled the existing state workforce development department and advocated for more K-12 and community college funding as part of her skills gap effort. Whitmer also has pushed for universal community college access.

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This isn’t a new theme in Michigan. Whitmer’s predecessor, Republican Gov. Rick Snyder, aimed for a similar accomplishment with a heavy emphasis on workforce development as part of his “Comeback State” message.  

The “skills gap” theory supposes that a mismatch in the state’s labor economy means workers are ill-equipped to perform the jobs needed in Michigan, which has an unemployment rate hovering around 4%, slightly above the national rate of 3.6%, according to the U.S. Bureau of Labor Statistics.  

But the notion that the state has the ability to solve the skills gap — or that one even exists — has no shortage of skeptics across the ideological divide. Vox writer Matthew Yglesias was blunt in his assessment earlier this year of the theory, in general, although he did not specifically write about Michigan: “The ‘skills gap’ was a lie.”

To Brad Hershbein, a senior economist focused on labor economics at the W.E. Upjohn Institute for Employment Research in Kalamazoo, politicians talking about a skills gap are largely referring more to gaps in the state’s educational system.

“We shouldn’t care about a skills gap, per se. We should care about [whether] people are doing well economically,” Hershbein told the Advance.

“Are they having enough to get by, are they being fulfilled at work? Those are the fundamentals we care about and drive people to vote,” he said. “You need to work on those fundamentals rather than being so concerned with this aspect of the skills gap, which by the way, we can’t even define very well.”

To Hershbein, the skills gap, as it is talked about by many policymakers and business leaders, focuses too much on whether people are being taught specific skills such as coding, rather than on more fundamental issues: namely, critical thinking skills, the ability to operate in teams and the ability to solve problems.

“We need to do a better job of teaching those and then we can worry about more specific problems,” he said, noting that politicians and business groups have long worried about the notion of a skills gap.

“This isn’t a fad,” he said.  

The Whitmer administration, for its part, views an educated workforce with a broad skill set as perhaps the most valuable commodity the state could possess if it wishes to have a valid economy.  

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“We’re trying to change the culture, which is the stories we tell ourselves about what it means to be successful,” said Doug Ross, Whitmer’s senior advisor for Michigan prosperity. “Because the evidence is overwhelming that for an individual to be successful and a community to be successful, it needs its people to be educated beyond high school.”

Ross stressed that the governor’s various workforce development initiatives don’t involve the state implementing specific training programs. Instead that’s up to educational institutions and the private sector.

The notion of a skills gap, Ross said, comes from the business community and what they view as their projected workforce needs versus what’s currently available based on educational outcomes.

“At this point the education systems in the state are not producing an adequate number of people with that education level or those skills. So they’re saying there’s a gap between demand and supply,” Ross said.

Michigan, like most states, is experiencing a dynamic in which large amounts of Baby Boomers will be exiting the workforce in a broad swath of industries in the coming years and officials worry there’s not enough skilled labor to replace them.

Whitmer has stated a statewide goal of seeking 60% postsecondary attainment — either with certificates or four-year degrees — by 2030. In 2016, 43.7% of Michigan residents had any post-high school credentials, according to the state.

Whitmer’s workforce development initiatives

• MI Opportunity: scholarship for helping Michigan high school graduates obtain postsecondary credentials either through free tuition at two-year community colleges or financial assistance at four-year institutions
• Michigan Reconnect: provides tuition-free pathways for two-year certificates or four-year degrees for adults 25 and over seeking employment in “in-demand” career fields

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For those who focus on workforce development and skilled trades training as a matter of practice, especially in the construction sector, some form of worker shortage is all but assured when unemployment is low and demand is high.

“The troubling part about the skills gap is that construction is cyclical. Compound that with the aging demographics, and you’re going to have a worker shortage — it doesn’t matter what the skill set,” said Tom Lutz, president of the Michigan Regional Council of Carpenters and Millwrights, one of the state’s largest construction unions.

The union just opened a new training center in Wayland south of Grand Rapids that it hopes will attract more dues-paying members in the West Michigan area.

Business community backing

Whitmer, for her part, has made education and workforce development a core part of her first six months in office. The Democratic governor has pushed bipartisan legislation — with the support of much of the state’s business community — that seeks to implement her core workforce development initiatives.

In a joint opinion piece published in the Detroit News in May, Sandy Baruah and David Hecker, presidents of the Detroit Regional Chamber and the Michigan chapter of the American Federation of Teachers, respectively, praised two of Whitmer’s initiatives. Those initiatives — MI-Opportunity and Michigan Reconnect — would go a long way toward fulfilling employer’s workforce needs.

Indeed, students enrolled in a welding program at Grand Rapids Community College told the Advance that they expect a host of opportunities upon completing a four-month certification program.

Kiara Contreras and Michael Bos, both 20, say that by following the certification route into skilled trades rather than a traditional degree, they expect to save money and eventually have the skills to open their own businesses further down the road.

“I think going to a trade school rather than going to college is a great decision if you don’t know what you’re going for at the time,” Contreras said, noting that her father works as a welder and that helped bring her into the trade. “Because you can spend a lot more on that than going into a trade.”

Bos said that before entering GRCC’s welding program he was working in tree removal and wanted to do something different. He said he wants to go into metal fabrication in the auto industry and eventually open his own shop.

“More importantly, we get the knowledge of what to do and then we can go out and get our own certificates,” Bos said of the trade school experience.

Budget battles

Whitmer’s first budget in March included a more than $500 million boost for public education, much to the pleasure of teacher’s unions in Michigan.

The Legislature, however, has not appropriated any funds for Whitmer’s proposed skilled trades initiatives in its proposed budgets. Those budgets give much smaller increases to education funding than proposed by Whitmer.

Speaking to thousands of education union members on the steps of the state Capitol this month, Whitmer laid the blame for Michigan’s poor educational outcomes squarely at the feet of the GOP-led Legislature, which she said has consistently underfunded public education.

“Our outcomes and our challenges are because of a failure in [the state Capitol],” Whitmer told educators attending a Lansing rally. “You cannot build an economy to last if you don’t support the education of children.”

Still, there’s ample debate about just how well equipped the state actually is to be able to address the skills gap.

Lutz, the head of the Carpenters and Millwrights union, notes that the state has long tried to make workforce development a priority, but has a less-than-stellar track record.

“Historically, [the state has] never been able to show those results,” Lutz said. “You can’t build skilled tradespeople in a classroom.”

Whitmer has previously acknowledged a similar sentiment.

Ross, Whitmer’s senior advisor, said that the administration views its role as ensuring comprehensive and affordable access to educational opportunities and to leave the specifics up to educators and business leaders.

“The role the state is taking … first is leadership to indicate that part of [Whitmer’s] commitment as governor is to help lead the state to become more prosperous, a higher-wage place to live and work in the 2020s,” Ross said.

Finding solutions

A report released in late-May by the Midland-based, free-market think tank Mackinac Center for Public Policy also threw some cold water on the notion that state government will have much success in closing the skills gap.

Rather, the Mackinac Center report argues that any skills gap that may exist is largely a natural market function and should be treated as such.

“In a labor market where multiple firms compete for a supply of workers, wages will increase and potential employees will respond accordingly by investing in the skills needed to qualify for those higher-paying jobs,” wrote the report’s author, Sarah Estelle, an associate professor of economics at Hope College in Holland.

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Kate Birnbryer-White, executive director of Michigan Community Action, recently wrote that as state lawmakers craft their next budget, boosting the Earned Income Tax Credit (EITC) could help employers fill their needed jobs. The tax credit, which is widely regarded as a key support mechanism for working people, was slashed in Michigan during the Snyder era.

“A boost in the EITC from 6% to 12% over two years would help Michigan residents better afford workforce training, transportation to jobs, housing and child care that would make it easier to juggle work and family life,” Birnbryer-White wrote in the Grand Rapids Business Journal.

Whitmer told the Advance at last month’s Mackinac Policy Conference that she’s seen more buy-in from the private sector to provide more training opportunities for potential employees. But she also says the state needs to play a role to ensure those opportunities are widely available.  

“Those are positive things,” Whitmer said of the private sector efforts. “But I think as a state, we have to have a much more robust, coordinated effort so that that’s true for all students.

“So they can see the different paths of prosperity in the state,” Whitmer said. “There is integrity and prosperity in a lot of different lines of work, and that’s a strength for a state when we have more people with skills in various venues.”

Hershbein, the Upjohn Institute economist, also acknowledged that natural market forces will play a role in solving any skills gap. But he also stressed repeatedly that the state’s education fundamentals remain off-kilter and a correction there is needed.

Unless that “systematic reform” is undertaken he said, Michigan’s workforce development initiatives will largely go the way of the state’s infrastructure woes.

“[Students] have to have the fundamentals so they can build upon skills they already have,” Hershbein said. “Otherwise, we’re basically [doing it] like the roads. We’re patching them rather than fundamentally designing them in a way that makes them more durable and robust.”

Advance Editor Susan J. Demas contributed to this story.