Bringing the Economy Home

A Weak Economy Or Inadequately Trained Workers: What’s To Blame For Joblessness?

Emilie Ritter Saunders / StateImpact Idaho

Western States CAT, which sells and repairs Caterpillar equipment, has established its own training program to make sure it has enough qualified workers.

For years now, labor economists and many of us who have felt the recession’s effects have puzzled over the U.S. jobless rate.  When will it come down, and why hasn’t it fallen more already?  One explanation is the so-called skills gap.  That’s the idea that employers are ready to hire, but they’re having a hard time finding workers with the training to meet their needs.

It’s an argument that has generated quite a few counterarguments.  Are there actually not enough machinists or welders out there?  Or are employers simply holding out until they find the perfect employee, someone they won’t have to train and bring up to speed?  Are the wages they’re offering too low to attract skilled job seekers? 

That discussion plays out in two pieces in today’s Wall Street Journal.  One article describes the plight of small businesses struggling to find qualified workers.  A WSJ survey of small-business leaders turned up this result:

About 31% of 811 small-business owners and chief executives said they had unfilled job openings in July because they couldn’t identify applicants with the right skills or experience… – The Wall Street Journal

An even higher percentage of surveyed manufacturing companies said they couldn’t find workers with the skills to match their needs.  What the piece can’t offer is a definitive view of whether or not there is truly a skills gap.

Enter another WSJ piece published today.  This one sums up the recent findings of a Federal Reserve Bank of San Francisco economist.  Most people who get jobs today are switching industries to do so, the economist’s working paper says.  That undermines the idea that a mismatch between workers’ skills and employers’ needs is to blame for the persistently high unemployment rate.

The research lends support to the view that much of today’s unemployment reflects inadequate demand in the economy, and thus susceptible to government stimulus, rather than a mismatch between the skills of unemployed workers and the needs of employers that will persist. – The Wall Street Journal

StateImpact recently reported on a training program here in Idaho that readies workers for “middle-skills” jobs.  Last month, a Georgetown University report found that vocational certificates have greater value in Idaho than in many other states.  It also found that relatively few Idahoans have that vocational training.


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