There is a durable belief that much of today’s unemployment is rooted in a skills gap, in which good jobs go unfilled for lack of qualified applicants. This is mostly a corporate fiction, based in part on self-interest and a misreading of government data.
A Labor Department report last week showed 3.8 million job openings in the United States in April — proof, to some, that there would be fewer unemployed if more people had a better education and better skills. But both academic research and a closer look at the numbers in the department’s Job Openings and Labor Turnover Survey show that unemployment has little to do with the quality of the applicant pool.
We’ve looked at the skills gap myth here before. I was wary right from the start, because the skills gap story is extremely beneficial to employers, at the expense of employees and the public. Too, the skills gap story has been used to justify everything from privatizing public schools to union-busting to unpaid internships to employers just blatantly shoving the cost of training their employees off on the public. No one ever says “there’s a skills gap! let’s extend unemployment benefits!” No, it’s all privatizing and union-busting and public subsidies to private employers.
I trace the skills gap myth to one Mr. Scott Walker of Wisconsin, but I’m sure he didn’t come up with it all by himself:
Sit in at any economic development conference in Wisconsin these days and you’re bound to hear talk about the “skills gap.”
The term is popular with employers who complain they can’t find enough qualified workers to fill open positions — despite a stubbornly high unemployment rate.
Earlier this month, a top executive with Marinette Marine Corp. warned that “manufacturing would cease to exist” in the state unless Wisconsin addressed its skilled worker shortage.
State officials — including Gov. Scott Walker — have jumped on the issue too, saying there are loads of great jobs out there if workers could improve their skills. The Legislature with near bipartisan support recently approved $15 million in grants to private-sector companies to train new workers and Walker wants to target some higher education funding to schools that will focus on teaching needed skills.
The New York Times helped spread the “durable belief” they’re so upset about, actually. The completely clueless Tom Friedman was one of the main salespeople. But why didn’t statements like this from the skills gap myth sales force cause people to question this story?
The blame-the-worker mentality lurking behind the “ skills gap” thesis was more explicitly laid out by PIMCO hedge fund owner Bill Gross, who declared, “Our labor force is too expensive and poorly educated for today’s marketplace.”
This is from an interview with one of the skills gap debunkers:
Peter Cappelli (PC): These stories have been kicking around for a long time – about problems associated with the labor force that are causing employers headaches … they have all been wrong frankly, so far. But, there are a lot of them. So at some point, people keep hearing all these stories and they start to think that there must be something to them. So I think where it started this time was of course during the Great Recession, and people started hearing these stories, and wondering what’s going on.
The mainstream view is the intersection of a couple of different arguments. One argument is that employers can’t find what they want and the other argument is that schools are failing – and the conclusion from those two arguments is that employers can’t find what they want because students don’t have adequate skills when they graduate because the schools are doing such a lousy job. So that’s the dominant view.
We know that’s not true – first, schools are not getting worse. In fact, student performance is going up and it’s been true for quite a while that the average American is more educated than the job they’re doing requires. There’s actually a whole line of research about the excess supply of people being over qualified, so I knew that part of the story wasn’t true. So you start asking yourself about the other parts. Like if you really have a shortage of some kind, you’d expect labor markets to get tight and you would expect wages to go up. But, that hasn’t been happening. So that suggests that something is wrong, because if wages are not going up, how can you have a tight labor market?
And then we know that employers are basically not paying very much, so if you are the least bit economically oriented, then you say ‘ok, they can’t find what they want, but they’re not willing to raise their prices (wages in this case) so gee, that’s not a surprise.’ The point is there is not a single part of that conventional wisdom is true. And it’s amazing how popular it is. But, it’s popular because first, the employer is off the hook.
Why do we have to go through this over and over? Wouldn’t it be easier to look at these claims critically right from the start before just blindly repeating them over and over until they become “durable beliefs”?