Betty Joyce Nash

English

Research Papers in Economics

Winter 2008 • Region Focus 23
Firms court and school a new breed of skilled worker WANTED: Brains toTrain
Instructor Ron Yancey of
Cheraw, S.C., left, trains
Northeastern Technical
College students on 
specialized machine tools 
used in products like cell
phones, computers, 
and other electronic 
components.
J
ared Sherrow powered up his future even before he
graduated from high school. Sherrow opted for a new
earn-and-learn deal that is schooling him for a career
at Santee Cooper, the state-owned electric and water utility
in South Carolina. 
“I really wasn’t interested in going to a four-year college,”
he says. “I was interested in going to tech, but I didn’t know
what I wanted to do.”  Santee Cooper recruited Sherrow in
2007 to replenish its dwindling supply of plant technicians.
And Santee Cooper’s job crunch reverberates through
other industries, too, where trained and intelligent techni-
cians appear endangered. Utilities and high-tech industrial
firms worry about who’ll run and fix the machines, weld the
seams, and fit the pipes. The South Carolina Employment
Security Commission projects that by 2014, jobs for
plumbers, pipefitters, steamfitters, and avionics technicians
will grow by 20 percent.
More than half of the nation’s aging utility workers will
be eligible to retire over the next decade, and that leaves
firms like Santee Cooper scrambling to lure high school 
students like Sherrow. 
Image Problem
Tech experts partly blame media for the dearth of skilled
labor. Few pipefitters or engineering technicians show up on
TV, they say, and so students aren’t lining up for those jobs.
Ambitious parents inadvertently add to the problem as they
press students to earn a bachelor’s degree instead of a 
technical one. Some blame that on manufacturing phobia. 
This skilled labor gap may reflect beliefs of previous 
generations, say educators and corporate recruiters. As low-
skilled manufacturing enterprises (like textiles) dwindled 
in South Carolina, parents and guidance counselors chan-
neled students to four-year colleges. While soft-skilled
liberal arts majors can’t qualify for technical jobs, their 
flexible skills might allow them to weather a manufacturing
layoff better than a technician. Employers, notes labor econ-
omist Orgul Ozturk, read the college degree as a signal of a
general ability to learn. 
Fallout from the labor shortage occupies Chris Lang day
in and day out in her work as dean for industrial and engi-
neering technology at Trident Technical College in
Charleston. Certainly there is that fear of manufacturing
losses, she says. More than likely, though,  students are unin-
formed about alternative careers. Firms get frustrated
because they can’t hire enough people, she says. Sometimes
they can’t even muster up enough students willing to train or
apprentice to be machinists or pipefitters, to name two
examples. 
Wages, Lang insists, are not the problem. 
“In South Carolina, students who graduate from techni-
cal programs often make more than people who have
graduated from college,” she says, adding that the focus on
the four-year degree has been at the expense of careers in
skilled trades. “If they [students] are never told about 
these possibilities, they are just not going to know. “I think a
lot of it is the perception,” Lang says. If the parents don’t
work in a factory themselves, “they look down on that job.” 
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BY BETTY JOYCE NASH
REGION FOCUS WINTER_08_F1  6/9/08  2:47 PM  Page 23Maybe the message is hitting
home: Automotive, machinist, heating
and air-conditioning technician enroll-
ments bumped up at Trident in the fall
of 2007.  
These jobs are not those of previ-
ous decades, but ones that require
more brain power, say people who
work in tech schools, like Cushman
Phillips. He directs training at
Orangeburg-Calhoun Tech in Orange-
burg, S.C. “In today’s world, a comput-
er-controlled system with thousands
of parts that all talk to each other —
the people who maintain and trouble-
shoot those are in high demand,” he
says. These are not jobs you can train a
monkey to do, he notes, because they
require a good head and a capable pair
of hands.
Stocking the Pond
Santee Cooper stocks its own pond.
Recruiting efforts, says senior em-
ployee relations representative Wendy
Cruce, will overcome what she calls a
“generational mindset.”
In 2007, the utility cranked up
“Power Associates,” the competitive
work and study scholarship Jared
Sherrow received. Technical educa-
tion, they tell parents of qualified
students, can forge careers with Santee
Cooper.
“I think a lot of students and 
parents don’t realize the value in these
technical careers,” Cruce says. “When
Jared finishes his program, there’s a
good chance he will be earning a lot
more than his high school friends right
off the bat.”
Expansion and retirements have
created chronic job openings at Santee
Cooper. But these jobs have changed
over the past 30 years. Auxiliary opera-
tors used to be trained on the job.  Not
anymore — it’s too technical. 
“They are on the floor, as well as the
unit operators who monitor every-
thing on computers,” Cruce says.
Those positions, incidentally, bring in
$40,000 to $50,000 annually — to
start. By contrast, a teacher (with a
bachelor’s degree) starts at about
Markets may manage the supply and demand of labor
over the long haul, but hiring decisions don’t happen in a
vacuum, so short-term labor imbalances may linger. 
“These days, with the economy and jobs and techno-
logy changing so quickly, getting enough workers trained
is hard,” says Orgul Ozturk, who is from Turkey. She
teaches economics at the University of South Carolina.
“If the global world was truly global, there would be no
such shortage, at least not as severe,” she says. “Most
countries, like Turkey, have an excess of skilled labor.” 
Immigration could move workers into vacant jobs if
policy allowed — there’s a worldwide labor surplus in less
developed countries. But U.S. immigration policies cur-
rently restrict a worldwide matchup of jobs to workers,
although special visas exist in some fields. (See the fall
2002 issue of Region Focus.)
Imperfect information about opportunities impedes
the flow of labor to some occupations. Many students
seem unaware of or uninterested in these opportunities,
and it’s hard to say why. People who seek qualified 
candidates or study the problem suspect it may have
something to do with the obsession with the four-year
degree, information asymmetries, and even inadequate
high school math and science preparation.
But increasing the quantity and quality of specialized
labor over the long term is a tricky proposition, with
accurate labor forecasts difficult to come by. Even the
Bureau of Labor Statistics projects out to only 2016, with
caveats about the changing economy.
That’s because firms can alter, fairly quickly, the way
they do business. This rapid change makes forecasting
tough, according to Harvard University labor economist 
Richard Freeman. “Projections of future demands for
skills lack the reliability to guide policies on skill develop-
ment,” he writes in a 2006 National Bureau of Economic
Research paper. The paper examines claims that the
pending baby boomers’ exit from the work force 
combined with the slow growth of U.S. labor will create a
mega-gap. He also addresses whether public policies
might sync supply with demand.
Historically, changes in technology or industrial out-
put affected labor demand more than demographics, he
writes. Economic forecasters shouldn’t expect demand in
those jobs vacated by boomers to create a labor shortage
in those occupations. For instance, Freeman points out
that in the 1950s and 1960s, analysts failed to “foresee the
changing labor force behavior of women in response to
improved employment opportunities and wages.”  
For boomers, excess labor meant worse earnings and
employment compared to older workers. Another exam-
ple comes from the high-tech boom, which opened jobs
in the computer field only to be offshored to qualified
overseas workers. Although U.S. firms might want to hire
U.S. workers, they could go out of business if they do
because willing workers abroad would do the same work
for less. 
While labor gaps can and will occur, the dramatic
shortages attributed to the mass retirements of a genera-
tion are overplayed. “The employment and earnings of
young workers depends more on macroeconomic condi-
tions, wage setting institutions, and technological
developments than on demography.” 
Freeman concludes that the market should be left
alone to raise wages, if necessary, rather than for govern-
ment to adopt policies that may keep labor costs low. 
— BETTY JOYCE NASH
24 Region Focus • Winter 2008
Plugging Holes in the Labor Market
REGION FOCUS WINTER_08_F1  5/30/08  11:38 AM  Page 24$30,000. And in a state where 
per-capita personal income ranks 47th
at about $29,700, it’s a shame 
for good-paying jobs for young 
people to go begging.
Santee Cooper snared Sherrow, and
over the summer of 2007, he helped
troubleshoot machine problems, and
earned an hourly wage of $10.  During
the school year, he attends classes
Mondays through Thursdays at
Trident Technical College, and on
Fridays (and weekends if there’s an
outage), he works at the plant. He’s
learned, among other skills, to read
blueprints. Santee Cooper foots the
bills and after two years in school, he’ll
work full-time if his grades and job 
performance hold. 
Sixteen students applied to the 
program and four were selected in
2007. This year, Santee Cooper will
take twice as many. The hardest sell,
Cruce says, is parents who cherish the
notion of that four-year degree. While
Cruces sees plenty of liberal arts
resumes, she says, “we simply can’t 
hire them.”
Sherrow spreads the word. “I have
told younger kids I know that they
need to put in for it because you learn,
you get an education, and your foot in
the door to a good company.” 
Monitoring the Gap
It’s not just power plants that need
people. Lang, the Trident Tech dean,
says welding is hot. Two Charleston-
area defense contractors “snap them
up like crazy.” And that’s left construc-
tion and metalworking firms high and
dry. Those and other companies 
also need machine tool operators,
industrial electrical techs and “people
who are multicrafted.” 
Two area firms, Alcoa and Bosch,
offer full-fledged apprenticeships.
Alcoa operates a smelting plant that
employs 600 people. (An internal
study by Alcoa indicated 65 percent of
its work force would be eli-
gible to retire over the next
decade.) Even if technology
and productivity gains
eliminate some of these
positions, it would still
require a lot of people to
make up the difference.
The apprentice program
responds to this need.
These apprenticeships vary
in length, and date from 
a 1930s-era program, and
are registered with state
labor departments. Alcoa
students work a 40-hour week and
then attend class for specific training.
To sweeten incentives for these
efforts, South Carolina legislators in
2007 approved a $1,000 annual tax
deduction for every new apprentice
that participating employers enroll.  
Louie Roberts, technical training
specialist at Robert Bosch, said find-
ing local talent for the firm’s
manufacturing operations proved 
difficult from the start, in 1974. 
“The attractiveness of the manufac-
turing sector is not as prevalent for 
the generations following the baby
boomers,” he says. Bosch counts on
signing bonuses and on-site training as
well as its apprenticeships. 
Running Rabbits
It’s one thing for a firm to recruit and
train its own people, and another for
the state to train workers. After all, who
knows which specialty will pay off? 
South Carolina has a growing aero-
space industry as well as automotive
plants and suppliers, among others.
Ready S.C. trained 6,726 people last
year. Ready S.C. is a project of the
South Carolina Technical College
System (SCTCS). Relocating firms
contract with the state for training.
The state foots the bill, but firms
promise jobs at competitive wages and
benefits.
Forecasting demand in the labor
market is a murky business. But stay-
ing ahead of labor trends remains
essential. “We also work closely with
the work by the research universities
in the state to see where research may
take us to forecast these future oppor-
tunities for South Carolina,” says
Barry Russell, president of SCTCS.
For instance, hydrogen fuel cell
research may yield developments. 
“We don’t have the resources to 
run every rabbit we see, but in this
case we have enough confidence for
this to be developed in South Carolina 
that we have several colleges right now
that develop curriculum modules,” 
he says.
Santee Cooper, Alcoa, and Bosch
are polishing the image of the trained
worker. And the community colleges
hammer away at the skilled labor
shortage too. “I can tell you South
Carolina is working to make sure that
gap is as narrow as we can make it,”
Russell says. South Carolina, since
2005, has required schools to expose
students to technical careers in 
addition to college options. Even in
high school, students declare a major, a
first step toward a career. 
Jared Sherrow’s decision was a no-
brainer. “They said they were going to
pay for me to go to school, and start
me off making good money.”          RF
Winter 2008 • Region Focus 25
Freeman, Richard. “Is a Great Labor Shortage Coming?
Replacement Demand in the Global Economy.” NBERWorking
Paper no. 12541, September 2006.
Veneri, Carolyn M. “ Can Occupational Labor Shortages Be
Identified Using Available Data?” Monthly Labor Review, 
March 1999, pp. 15-21.
R EADINGS
Automotive tech students at Piedmont Technical College build 
a replica of a 1965 Cobra muscle car as a class project. Proceeds
from the student-built car will be donated for scholarships.
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REGION FOCUS WINTER_08_F1  5/30/08  11:38 AM  Page 25

Wanted : brains to train

http://www.richmondfed.org/publications/research/region_focus/2008/winter/pdf/feature2.pdf

Wanted : brains to train

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