Posted: November 02, 2012

The Economist: The need for OJT

Tom Binnings

 When I was about 20 years old, I spent a few months as equipment manager for my father’s unionized construction company. The semi-truck drivers who hauled the heavy equipment were Teamsters.
I, being naïve about the protocols of union contracts, became outraged one day when Jimmy, a Teamster driver, refused to move his big rig 50 yards because he was on break. An entire heavy crane crew was sitting idle, costing the company lots of money every minute of delay. After jiving humorously with Jimmy, expecting him to give in, I told him, "Well hell, then I’ll move the damn thing." I knew just enough about driving a big rig 50 yards to be very hazardous to the truck’s health, and possibly Jimmy’s livelihood, if I ended up sending it to the repair shop. After watching me grind a few gears, Jimmy acquiesced and moved the truck.

That experience, combined with a later understanding of the monopolistic tendencies of labor unions, led me generally to dislike the unions and favor right-to-work laws. So I was initially pleased to read recently that, according to the Bureau of Labor Statistics and labor historians, private sector union membership has fallen to 6.9 percent of the work force – the lowest level in more than a century. But some bad comes with the good.

On the surface, the American economy and businesses have done well with the demise of unions. After all, government legislation and regulation have made the workplace far safer and fairer by some standards. On the other hand, it may well be that it was the historic union support for politicians that brought many of these safety, health and fairness issues to the forefront.

My real concern about the demise of private sector unions is much more pragmatic. In many of the traditionally blue collar trades, unions provided the training ground for future generations of skilled and semi-skilled workers. This was especially apparent in the construction industry where aspiring young plumbers, electricians and carpenters got some basic training in classrooms at the union hall and a lot of OJT (on-the-job training). Labor contracts accommodated this method of training.

OJT has a long history in the professional sector as well. In the 19th century, aspiring attorneys studied law under the mentorship of a practicing attorney. Even today, classroom education is not enough to become a competent doctor, nurse or school teacher.

We seem to have lost sight of the need for OJT in most of the labor market. A young person needs a family member or friend to show them the trade. Some argue that unions and even the American Medical Society attempted to curtail the supply of new tradesmen by restricting education and training programs or by making initiation into the profession too costly. Whatever the reason, we are relying more heavily on foreign workers to come to the U.S. to help us meet demand in the construction and health-care industries.

At the same time we are failing to produce enough semi-skilled and skilled workers in key areas, we are running amok in educational programs run by schools funded by easy-to-obtain student loans. There are many stories about unemployed graduates from these programs, as the demand for their skill is just not there. Some colleges and universities are beginning to do a better job by advising students to pursue dual degrees – one major you love and one that will get you a job.

At the end of the day there is no substitute for educational and training systems that provide OJT simultaneously with the classroom exposure or even in lieu of the classroom. Perhaps we need to rethink the future role of unions. We definitely need to rethink expected outcomes from community colleges and trade schools, as well as high schools and colleges. In the meantime the older generation needs to be bolder in working with tomorrow’s young aspiring workers, and politicians need to re-engineer labor laws to accommodate and incentivize OJT.

Tom Binnings is a senior partner at Summit Economics in Colorado Springs. He has more than 30 years of experience in project management, economic and market research, real estate development, business analytics and strategic planning. He can be reached at (719) 471-0000 or tbinnings@comcast.net.

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