Here are the top posts from 2013 that YOU found most interesting.
Skills DO Pay the Bills

You need skills, not just high pay, to properly hitch the cart to the horse.
You need skills, not just high pay, to properly hitch the cart to the horse.

We paid attention!
With over 20,000 views, we adjusted to your interest by creating a new blog focused solely on careers:
Second most popular  was Multiple Solutions about the lesson I learned at Paul Horn Company about optimizing for product output and quality rather than lowest cost- over 14,000 views:
Yep Two solutions! Which one is right?
Yep Two solutions! Which one is right?

Accuracy and Precision in your Machining Shop
Accuracy describes 'close to true value;' Precision describes 'repeatability.'
Accuracy describes ‘close to true value;’ Precision describes ‘repeatability.’

Our post explaining accuracy and precision has had over 10,000 views.
We had two posts in our top ten addressing Safety and Lift Trucks:
OSHA Emphasis Lift Trucks
Inspection Compliance ForkLifts
And the balance  at 5000 views or less each addressed Metallurgy and it’s impact on our processes and products:
Hardness vs Hardenability
5 Benefits of Cold Work 
Blue Brittleness
5 Reasons to Anneal Steel
Seams on Steel Products
We started this blog to provide knowledge retention of important concepts that impact our precision machining businesses.
But you keep this blog going with your interest,  forwards to colleagues, and comments on group discussion on LinkedIn where we share.
What will be 2014’s most important posts? We suspect regulatory topics to garner a lot of attention, but there is always the economy…
What would you like us to blog about in 2014?

The New York Times gets it wrong on  the skills gap, confusing cause and effect, ignoring facts, and making a false analogy.

We’ll give you the link to their misleading article at the end of this post. It made a couple of erroneous points:

  1. Supply and demand dictate that wages should rise if their is a shortage of machinists;
  2. Wages for McDonald’s managers are better than those for skilled machinists;
  3. Demand for skills isn’t real.

In this post we’ll deal with the supply and demand wages  issue.

Supply and demand dictate that wages should rise if there is a shortage of machinists

In the NYTimes piece, economist Mark Price argues that “It’s basic economics…If there’s a skill shortage, there has to be a rise in wages.”

If only economics were so basic, Mark. Actually supply and demand is the wrong issue; the issue is actually the Elasticity of Labor Supply to an Occupation.

In “basic economics” terms this means Where jobs require specific skills and lengthy periods of training, the labor supply will be inelastic. Inelastic means that  it is not possible to expand that specific labor force in the short term; ‘raising the wages won’t just create them out of thin air…’

The NYTimes and economist Price have confused cause and effect.

You need skills, not just high pay, to properly hitch the cart to the horse.
You need skills, not just high pay, to properly hitch the cart to the horse.

Higher wages are a consequence of having skills that add value by increasing the value and or quality of the employee’s work. Raising wages does not of itself add any tangible benefit or skill to the employee’s work product. It does however raise cost. Why the wages “don’t has to rise”  is because, unlike the inelastic  supply for skilled labor in an occupation, the supply for manufacturing work  is elastic.

China and other low wage economies around the world provide lower cost often government subsidized alternatives to  U.S. manufacturing that becomes more expensive but not more productive if the wages just increased because Mr. Price thinks they should.

Precision machining is an occupation with inelastic labor supply. It requires specialized skills, ability to do math, and training and experience to safely perform the work to zero defects (Zero PPM) standards. The anti-lock brake, airbag, and aircraft parts our machinists make need to work.

Bottom line:  Skills are what is demanded, and are in short supply. Higher wages are determined by the value add of the skills obtained, and held in check by low cost competitors across the globe.

NYTimes Skills Don’t Pay the Bills

Cart before the horse

Next post, we’ll look at the false analogy of a Mc Donald’s Manager somehow being comparable work to that of an entry level precision machinist.