The airlines’ crippling pilot shortage: another bogus “skills” crisis

Summary: Our major media tell the news from the perspective of the 1%, no matter how bogus. For example, in stories about “skills shortages” we see the New America in which employers refuse to pay market-based salaries. They assume that the reserve army of the unemployed — refreshed by immigration — will keep wages down. So they play a game of chicken with workers, assuming that the game is stacked in their favor. Here we look at this contest in the market for commercial airline pilots, one of increasingly common stories about “skills shortages.”

Corporate journalsim

This article in Forbes nicely shows the modern CEO’s view of the world (that’s what Forbes does).

Pilot Shortage Threatens To Slow U.S. Airline Growth
by Brian Prentice and Philippe Gouel, 28 Jan 2016

“Unless airlines find ways to work with partners to cultivate a pilot pipeline, they could face difficult, even volatile, competition for experienced pilots because the current regulatory and industry situation can only yield about two-thirds of the pilots the U.S. will need in the next 20 years. … Leading airline executives are considering a new approach to the problem by forming partnerships with operators, training providers, and even regulators to shape the pipeline of pilots in training.”

“Leading airline executives” have more sophisticated tools than microeconomics 101. They do not see a pilot shortage as market signaling that they do not pay pilots enough to produce the needed supply. They have “new approaches.”

Tanya Powley at the Financial Times explains some causes in “Shortage of trained pilots could keep jets on the ground” , 9 March 2016 — “Challenge of keeping the cockpit staffed as passenger demand for flights surges.”

“It’s all I’ve wanted to do since I was about 11 but it’s not without its challenges,” says Mr. Audlin… “You’ve got the stress of pilot training, which is incredibly intense, coupled with financial stress.” … The cost of training is substantial: it can exceed £100,000 for those who undertake a full-time 18-month course. If they go on to train on a specific aircraft, such as the Boeing 747 or Airbus A320, they have to find another £30,000.

Twenty years ago, airlines mostly paid for training, or pilots would join from the military. However, as cuts have been made across an industry that often struggles to be profitable, the financial burden has gradually shifted to the trainee, and most have to cover the cost with bank or family loans.

That sounds like quite a challenge. But like the Forbes article, she doesn’t mention wages. The journalists at The Economist explain modern capitalism’s problem-solving methods: “America is running out of people to fly its planes“, 9 March 2016.

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Education is not a solution to automation

Summary: We’re on course to repeat the mistakes of the first 2 industrial revolutions in the 3rd. The wonders of increased productivity benefit the 1%, while the middle class seeks easy but chimerical ways to preserve their way of life. Anything but the work and risk of collective political action. Today we examine the favorite recommended cure to automation: more education. It works as well as frogs climbing over each other to escape a pot.  {1st of 2 posts today.}

Frog Pile
Without growth, education doesn’t help the group. Just a lucky few.

More education is the most common response to the job losses and wage stagnation caused by automation. People, young and old, frantically train and retrain themselves for jobs in the ever-shrinking pool of jobs supporting a middle class lifestyle. Only lately has the futility of this become obvious, as experience shows its flaws.

Nick Bunker (Washington Center for Equitable Growth) gives a summary of the fallacies: “Is higher education the answer to reducing income inequality?” — The money paragraph, undercutting the key assumption of more education as a solution:

Intuitively, then, increasing the supply of educated workers should reduce inequality as it would increase wages among a broader supply of more educated workers. But that assumes the demand for educated workers will continue to rise. Problem is, recent research finds that the demand for skilled labor appears to be on the decline.

See this article for more about this, and links to research. It’s true even for advanced STEM degrees. That’s the bad news. Now for the worse news.

Education puts workers on a new kind of boom-bust cycle.

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The shortage of STEM workers: another bogus crisis crafted to benefit the 1%.

Summary: Another day, another astonishing bogus crisis (the STEM shortage) in which well-meaning Americans labor against their own interests to further enrich the 1%. The true nuggets of insight in the news media reveal so much, but accomplish nothing unless they spark action.

Better days are here, for some of us.

“Big industry constantly requires a reserve army of unemployed workers for times of overproduction. The main purpose of the bourgeois in relation to the worker is, of course, to have the commodity labour as cheaply as possible, which is only possible when the supply of this commodity is as large as possible in relation to the demand for it …”
— Marx (1847, unpublished work)

“Taking them as a whole, the general movements of wages are exclusively regulated by the expansion and contraction of the industrial reserve army …”
— Marx, Das Kapital (1867)

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This is a tale of the New America: the mythical STEM crisis:

  1. The STEM Crisis Is a Myth“, Robert N. Charette, IEEE Spectrum, 30 Aug 2013 — “Forget the dire predictions of a looming shortfall of scientists, technologists, engineers, and mathematicians.”
  2. The STEM Crisis: Reality or Myth?“, Michael Anft, The Chronicle of Higher Education, 11 November 2013
  3. The truth about the great American science shortfall“, Karin Klein, op-ed in the Los Angeles Times, 24 February 2014
  4. The Tech Worker Shortage Doesn’t Really Exist“, BusinessWeek, 24 November 2014 {update}

It’s an example of how America works in the 21st century: well-meaning but foolish people serving the plutocracy:

  1. Plutocrats (e.g., Bill Gates) see a need for more cheap workers.
  2. Create fake scare: a shortage of workers trained in science, technology, engineering, and mathematics.  STEM! Some seed money, mostly for marketing.
  3. A thousand organizations — Federal to local schools, charities (e.g., Boy Scouts), businesses — rally to action.

That the shortage of STEM workers was bogus was quite obvious from the start, as Klein explains. It is Econ 101:

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Do we have a shortage of workers, or just cheap employers? Part two of two.

Summary:  So much of our consensus thinking results from full-spectrum propaganda from well-paid shills working for our ruling elites, well-funded institutions of disinformation and propaganda. This is one reason why we’re losing, and the Republic dying. Here we examine one issue of importance, important both by itself and as an example of a larger phenomenon:  do we have structural unemployment?  See part one here.

“Anyone who is willing to work and is serious about it will certainly find a job. Only you must not go to the man who tells you this, for he has no job to offer and doesn’t know anyone who knows of a vacancy. This is exactly the reason why he gives you such generous advice, out of brotherly love, and to demonstrate how little he knows the world.”
― From The Treasure of the Sierra Madre by B. Traven (1927)

Contents

Part one (yesterday):

  1. Introduction, about propaganda
  2. Some quotes
  3. Simple rebuttals to claims about worker shortages
  4. For more information about employment patterns

Contents of part two:

5.  More quotes
6.  More evidence these claims are bunk
7.  What about employers paying fair wages, but unable to find skilled workers?
8.  For more information

(5)  More Quotes

“…when you hear an employer saying he needs immigrants to fill a ‘labor shortage,’ remember what you are hearing: a cry for a labor subsidy to allow the employer to avoid the normal functioning of the labor market.”
— Dr. Michael S. Teitelbaum of the Alfred P. Sloan Foundation, quoted in “How and Why government, universities, and Industry Create Domestic labor Shortages of Scientists and high-Tech Workers”, Eric Weinstein, National Bureau of Economic Research, 14 December 2001

“…the problem may not be that there are too few STEM qualified college graduates, but rather that STEM firms are unable to attract them. Highly qualified students may be choosing a non-STEM job because it pays better, offers a more stable professional career, and [are] perceived as less exposed to competition from low-wage economies.”
— “Steady as She goes?:Three generations of Students through the Science and engineering pipeline”, B. Lindsay Lowell et al, presented at Annual Meetings of the Association for Public Policy Analysis and Management, 7 November 2009

“If a genuine labor shortage existed, wages in these fields would have risen dramatically in ways they have not. In addition, unemployment rates in this sector have increased dramatically over the past year, with engineers reaching their highest unemployment rate since 1972. Graduation rates in the STEM fields also indicate that the United States is producing enough graduates to meet the employment needs of the industry.”
— “Review of vulnerabilities and potential Abuses of the L-1 visa program”, Office of the Inspector General, January 2006

(6)  Broader Evidence that these claims are bunk

More broadly, look at actual evidence — not the anecdotes usually cited (ie, employers complaining, as they always do, about workers’ wages):

(a) Jobs Americans Can’t Do? The Myth of a Skilled Labor Shortage” by the Federation for American Immigration Reform, November 2011 — This report contains the following findings:
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Do we have a shortage of workers, or just cheap employers? Part one of two.

Summary:  So much of our consensus thinking results from full-spectrum propaganda from well-paid shills working for our ruling elites, well-funded institutions of disinformation and propaganda. This is one reason why we’re losing, and the Republic dying. Here we examine one issue of importance both by itself and as an example of a larger phenomenon.  See part two here.

Contents

Part one:

  1. Introduction, about propaganda
  2. Some quotes
  3. Claims about worker shortages, & rebuttals
  4. For more information

Contents of part two (tomorrow):

5.  More quotes
6. Broader Evidence that these claims are bunk
6.  What about employers paying fair wages, but unable to find skilled workers?
7.  For more information

(1) Introduction, about propaganda

Our ruling elites have constructed institutions that manufacture lies at a greater pace and disseminate them more widely than we can provide rebuttals. Lies about the progress of our foreign wars, about their fake debt-reduction plans (eg Ron Paul’s), bogus analysis of economic theory and the economy. We’re not only playing defense, but doing so unsuccessfully.

I have a two foot high pile of 2012’s news articles which can be broadly categorized as “lies”. I’d like to write rebuttals, but could not do so even 24-7. I would like to list them for your review, but that would be a full-time job. Here we examine one, of importance both by itself and as an example of a larger phenomenon.

Here we’ll discuss some specific claims; tomorrow we’ll review research about the broader economy.

(2)  Some Quotes

“Employers are very quick to raise the specter of a labor shortage, but often it’s another way of saying they can’t find the workers they want at the price they’re paying … they are unwilling to meet the price signal the market is sending, so they seek help in the form of a spigot like immigration.
—Jared Bernstein, former Chief Economic Advisor to Vice President Biden, quoted in BusinessWeek, 6 August 2007

“No one who has come to this question with an open mind has been able to find any objective data suggesting general ‘shortages’ of scientists and engineers.”
—Dr. Michael S. Teitelbaum of the Alfred P. Sloan Foundation, testimony before Congress on 6 November 2007

(3)  Specific claims about worker shortages — and simple rebuttals

The claims of skill shortages are almost entirely anecdotal.  Worse, most of the specific stories are bogus. Asking employers if they’d like cheaper workers is good for an easy story and a smile from the publisher, but little but fiction.  Here is a sampler of this swill.

(a)  ‘Skills gap’ leaves employers without workers in pipeline, Boston Globe, 3 July 2011 — demolished with this simple rebuttal:
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