I’ve been writing about this subject for years. In “The Next American Economy,” I wrote about how the creation of new industries is creating demands for entirely new sorts of workers. San Diego is enjoying a boom in genomics, for example, but finding people to interpret the results of what genetic testing machines find is so difficult that employers are literally flying people in from China and India. There are not enough Americans who are “bioinformaticists.”
I also have written extensively about disruptions in the labor force caused by increasing sophistication in manufacturing processes. As more computerized machines and robots and software are introduced into manufacturing, people with only high school educations cannot do those jobs. There is a gap between what they know and what is necessary to do the work. There are an estimated 600,000 to 1 million jobs in the industrial sector that are now open today because manufacturers can’t find the right people.
So for Krugman to argue that the skills gap is a complete fabrication just takes my breath away. It reveals a complete isolation from what is really happening in America today. I don’t care if he won five Nobel Prizes for economics, or even 10, he lacks even the most basic comprehension about what is taking place at the ground level in the American economy.
Jobs and Skills and Zombies
A few months ago, Jamie Dimon, the chief executive of JPMorgan Chase, and
Marlene Seltzer, the chief executive of Jobs for the Future, published an article in Politico titled “Closing the Skills Gap.” They began portentously: “Today, nearly 11 million Americans are unemployed. Yet, at the same time, 4 million jobs sit unfilled” — supposedly demonstrating “the gulf between the skills job seekers currently have and the skills employers need.”
Actually, in an ever-changing economy there are always some positions unfilled even while some workers are unemployed, and the current ratio of vacancies to unemployed
workers is far below normal. Meanwhile, multiple careful studies have found no support for claims that inadequate worker skills explain high unemployment.
But the belief that America suffers from a severe “skills gap” is one of those things that everyone important knows must be true, because everyone they know says it’s true. It’s a prime example of a zombie idea— an idea that should have been killed by evidence, but refuses to die.
And it does a lot of harm. Before we get there, however, what do we actually know about skills and jobs?
Think about what we would expect to find if there really were a skills shortage. Above all, we should see workers with the right skills doing well, while only those without those skills are doing badly. We don’t.
Yes,workers with a lot of formal education have lower unemployment than those with less, but that’s always true, in good times and bad. The crucial point is that unemployment remains much higher among workers at all education levels than it was before the financial crisis. The same is true across occupations: workers in every major category are doing worse than they were in 2007.
Some employers do complain that they’re finding it hard to find workers with the skills they need. But show us the money: If employers are really crying out for certain skills, they should be willing to offer higher wages to attract workers with those skills. In reality, however, it’s very hard to find groups of workers getting big wage increases, and the cases you can find don’t fit the conventional wisdom at all. It’s good, for example, that workers who know how to operate a sewing machine are seeing significant raises in wages, but I very much doubt that these are the skills people who make a lot of noise about the alleged gap have in mind.
And it’s not just the evidence on unemployment and wages that refutes the skills-gap story. Careful surveys of employers — like those recently conducted by researchers at both M.I.T. and the Boston Consulting Group — similarly find, as the consulting group declared, that “worries of a skills gap crisis are overblown.”
The one piece of evidence you might cite in favor of the skills-gap story is the sharp rise in long-term unemployment, which could be evidence that many workers don’t have what employers want. But it isn’t. At this point, we know a lot about the long-term unemployed, and they’re pretty much indistinguishable in skills from laid-off workers who quickly find new jobs. So what’s their problem? It’s the very fact of being out of work, which makes employers unwilling even to look at their qualifications.
So how does the myth of a skills shortage not only persist, but remain
part of what “everyone knows”? Well, there was a nice illustration of
the process last fall, when some news media reported that 92 percent of
top executives said that there was, indeed, a skills gap. The basis for
this claim? A telephone survey in which executives were asked,
“Which of the following do you feel best describes the ‘gap’ in the
U.S. workforce skills gap?” followed by a list of alternatives. Given
the loaded question, it’s actually amazing that 8 percent of the
respondents were willing to declare that there was no gap.
The point is that influential people move in circles in which repeating the
skills-gap story — or, better yet, writing about skill gaps in media
outlets like Politico — is a badge of seriousness, an assertion of
tribal identity. And the zombie shambles on.
Unfortunately, the skills myth — like the myth of a looming debt crisis — is having
dire effects on real-world policy. Instead of focusing on the way
disastrously wrongheaded fiscal policy and inadequate action by the
Federal Reserve have crippled the economy and demanding action,
important people piously wring their hands about the failings of
American workers.
Moreover, by blaming workers for their own plight, the skills myth shifts attention away from the spectacle of soaring profits and bonuses even as employment and wages stagnate. Of course, that may be another reason corporate executives like the myth so much.
So we need to kill this zombie, if we can, and stop making excuses for an economy that punishes workers.
