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Is There Really a 'Skills Gap'?

Millions of jobs are going unfilled because U.S. employers can't find workers with the right skills. What's really behind companies' hiring difficulties? Experts debate whether a "skills gap" is the main culprit.

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It’s an ominous-sounding argument, and it’s making the rounds among policymakers: Millions of jobs are going unfilled because U.S. employers can’t find workers with the right sets of skills.

The theory that a “skills gap” is hobbling business recently led President Donald Trump to propose a massive expansion of apprenticeships to fuel the jobs pipeline and let students “earn while they learn.”

But the skills-gap argument isn’t new, and it’s vigorously debated. Theories differ about what’s causing companies’ hiring difficulties, and how to solve them.

Here are some highlights from arguments that experts commonly make about the skills gap.

Is the skills gap the main reason employees are struggling to hire workers?
YES
NO
  • 6.9 million people are unemployed while there are 6 million job openings.
  • Six in 10 workers need some postsecondary education for today’s jobs, compared to 1 in 3 in the 1970s.
  • The wage premium for workers with college degrees doubled between the mid-1980s and mid-1990s, then flattened out, suggesting a continued general shortage of workers with the skills employers want.
  • The wage premium for college degrees varies widely among college majors, suggesting particular shortages in specific fields.
  • In a small survey of companies by the Business Roundtable, 95 percent reported difficulty finding workers with the skills they need.
  • Typically, when unemployment is low, as it is now—4.3 percent as of May, a 16-year low—wages for in-demand skills rise. That’s not happening.
  • Employers are taking longer to fill vacancies.
  • Employers are using computerized hiring software that rules out more candidates based on degrees earned, criminal history, and other factors.
  • Difficulty filling positions can be a symptom of low unemployment, regional mismatches, or pockets of shortages in emerging occupations.
  • Research shows a decline in the proportion of middle-skill jobs, and job-market polarization: expansion in jobs at lower and higher ends of skills spectrum in the past three decades.
Who is responsible for the problem?
Who is responsible for the problem?
  • Workers, high schools, training programs, colleges
  • Changes in the economy
  • Business, government
  • Changes in the economy
What can be done to solve the problem?
What can be done to solve the problem?
  • Education and training institutions could redouble efforts to provide young people with stronger academic, technical and workplace skills.
  • Workers could rethink the credentials they need. Many jobs in fast-growing sectors of the economy do not require bachelor’s degrees.
  • Companies could raise wages for in-demand skills; that would increase the supply of workers.
  • Companies could invest in training, instead of seeing job skills as something applicants either have or don’t have.
  • Business could work with education to shape career-focused high school programs and postsecondary training.
  • Companies could rethink what they require and how they assess candidates’ job skills. Many demand bachelor’s degrees for jobs that don’t truly require them.
  • Government could rework economic policy so it doesn’t favor the wealthy and disadvantage workers.

For deeper dives into the skills-gap arguments:

  • “The Economy Goes to College,” Anthony P. Carnevale and Stephen J. Rose
  • “The Undereducated American,” Anthony P. Carnevale and Stephen J. Rose
  • “Skills, Tasks, and Technologies: Implications for Employment and Earnings,” Daron Acemoglu and David Autor
  • “Skill Gaps, Skill Shortages and Skill Mismatches: Evidence and Arguments for the United States,” Peter H. Cappelli
  • “Why Claims of Skills Shortages in Manufacturing Are Overblown,” Paul Osterman and Andrew Weaver
  • “Education is Not the Cure for High Unemployment or for Income Inequality,” Lawrence Mishel

Vol. 36, Issue 37, Page 8

Published in Print: July 19, 2017, as Is There Really a 'Skills Gap'?
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