Does the Skills Gap Explain All These Job Vacancies?

Does the Skills Gap Explain All These Job Vacancies?

The skills gap—a systemic disconnect between the skills available in the workforce and those employers need—is commonly cited as a major reason why many jobs in the US are going unfilled. Now more than ever, organizations need talent in increasingly critical areas like digital technology and data science, the conventional wisdom holds, and US colleges and universities aren’t producing enough graduates with the right skill sets.

But not everyone buys that explanation, or the accompanying solution of introducing better on-the-job training and making sure higher education is aligned with the needs of the labor market. At the Pew Charitable Trusts’ Stateline blog, Sophie Quinton calls this solution “too simplistic”:

It’s true that over the past 30 years, education and skill requirements for jobs have been rising, as a Pew Research Center study recently found. … But that long-term shift doesn’t totally explain why jobs have been sitting open since the Great Recession ended. The U.S. hasn’t experienced the massive wage growth you’d expect from a shortage of workers, although wages did start rising last year. Many economists say that if there were a shortage of workers, wages would be going up more.

They say the lack of wage growth proves the U.S. has a demand problem — not enough good jobs — rather than a supply problem — not enough skilled workers. The idea that all we need to do is train workers is “fundamentally an evasion of a profound social challenge,” former U.S. Treasury Secretary Larry Summers said during a panel discussion hosted by the Brookings Institution last year in Washington, D.C.

“Training is very important and indeed necessary,” Summers told Stateline. “But it is not sufficient to meet either the near-term challenge of assuring demand and preventing recession or the longer-term challenge of the structural loss of jobs for less-skilled workers.”

The challenge of creating good jobs for American workers was starkly illustrated in a labor market analysis Indeed released this summer, which found that only 16 percent of US jobs paid enough to keep up with the rising cost of living between 2012 and 2015. In addition, one economist has theorized that the main reason the US faces a shortage of STEM talent is that employers are paying below-market salaries for employees with these valuable skills.