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Is There or Is There Not a Skills Gap?

  • Is There or Is There Not a Skills Gap?

Keeping abreast of all the latest developments and progress (or lack thereof) in the community college sector is a fairly daunting task. There are numerous issues and trends that are couched inside a seemingly massive community college reform movement happening in our time, right now.  On the workforce development side, the so-called “skills gap” is one of those issues, in my opinion, that is not easy to fully understand.  The notion of employers having great difficulty with hiring qualified, high-skilled workers for a wide variety of decent jobs, primarily because there aren’t enough educated job candidates available, seems illogical in this period of  high unemployment.

Demand for Skilled Workers Not Being Met

Nonetheless, we see intelligent, well-written reports that support this notion and get repeated media attention, particularly coming out of the highly respected Georgetown University Center on Education and the Workforce. Two of these reports, for instance, relate strongly to the skills gap issue and are worth mentioning and linking to here:  

Help Wanted: Projections of Jobs and Education Requirements through 2018 – Since 1973, jobs requiring a postsecondary education have more than doubled from 28 percent to 59 percent and are estimated to increase to 63 percent over the next decade.  By 2018, there will be a need for 22 million U.S. workforce employees with college degrees.  Of that number, it is estimated that there will be a shortfall of 3 million who have not earned an associate degree or better.

STEM (Science, Technology, Engineering, and Mathematics) –  By 2018, STEM occupations will comprise only 5 percent of all jobs in the U.S., but we are still not on a solid track to produce enough STEM workers to compete successfully in our global economy.  In addition, while the manufacturing, mining, utilities and transportation industries are reducing overall employment, these industries have also experienced an increased demand for more highly skilled workers with STEM competencies.

Another Point of View

Recently I happened to catch a brief article published last month in the Atlantic provocatively headlined “Hey, That Famous ‘Skills Shortage’ You’ve Heard About? It’s a Myth.” It was actually the catalyst for this blog post. Here writer Matthew O’Brien pointed out that demand for low-skilled, medium-skilled and high-skilled workers have all remained similar to each other from May 2006 through November 2011. “If employers really couldn’t find enough high-skilled workers, we would expect the demand for them to increase substantially faster than for other workers. It hasn’t,” O’Brien wrote. 

O’Brien got that information from the recent issue of the Chicago Fed Letter, in an article titled “Is there a skills mismatch in the labor market?”. This article examined the role of this so-called skills mismatch relative to current low levels of hiring and high levels of unemployment. Basically, a skills mismatch, according to the Chicago Fed, is a misallocation between the attributes of job seekers and the attributes employers are seeking to fill job openings. A misallocation makes it difficult for job seekers to get employed as well as difficult for employers to find qualified applicants.

After using data from the U.S. Bureau of Labor Statistics, as well as data from the Conference Board, which tracks online help-wanted ads, the Chicago Fed found limited evidence of any skills mismatch actually occurring. In addition, the Chicago Fed claimed that “since the end of the Great Recession (noted as June 2009), evidence of mismatch in the labor market has been mixed. Studies suggest that the degree of mismatch has abated since early in the recession, and there is evidence that many employers appear hesitant to fully commit to hiring.”

My Gut Feeling

 The Chicago Fed stuff actually supported my gut feeling that the whole skills gap issue has been a bit exaggerated. Of course, I could also be sadly mistaken. This feeling of mistakenness hit me hard when I saw that the ManpowerGroup Annual Survey recently revealed on May 29, 2012 that “U.S. Talent Shortages Persist in Skilled Trades, Engineers and IT Staff.”  Here it was noted that “49 percent of U.S. employers are experiencing difficulty filling mission-critical positions . . . U.S. employers are struggling to find available talent more than their global counterparts. . .”

But I still could not shake off what the Chicago Fed revealed, so I am still feeling skeptical about the skills gap issue. Also, the fact that unemployment has remained high for a very long time now only contributes more to my skepticism on this topic.  It just does not add up. So, I guess I’ll have to conduct some more serious research on this topic to arrive at the truth. Or, perhaps, dear reader, you can help me out.

What do you think?  Is there or is there not a skills gap?

About the Author

George Lorenzo

George Lorenzo is president of Lorenzo Associates, Inc., and writer, editor and publisher of The SOURCE on Community College Issues, Trends & Strategies, a rich information resource dedicated to the postsecondary education sector.  He has more than 25 years experience as a professional education writer, editor, researcher and publisher. 

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