Fake Skills Shortage: Workers Have Skills But Lack Jobs & Fair Wages

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Fake skills shortage: American business is finding it harder to hide behind the excuse that there simply aren’t enough workers with certain skills.

Writing in the New York Times Magazine, Adam Davidson (founder of the Planet Money podcast and NPR radio show) deconstructs the so-called “skills gap.”

Fake skills shortage.Skills and education aren't enough if there are no jobs and pay is low.
Skills and education aren’t enough if there are no jobs and pay is low.

Turns out it’s a fake skills shortage.

Reasons Behind The Fake Skills Shortage

Most businesses simply don’t want to pay fast-food level wages for high-skill jobs and experience. Others have found that they can push “efficiency” – making existing employees work ever harder – rather than hiring new employees.

Some major corporations have hundreds of millions in cash on hand and reporting record profits. But the cash sits on the sidelines. Very little of the profits seem to be reaching those do who have jobs.

Microsoft recently opted to switch its highly skilled workforce to consumer-driven health care insurance. This type of insurance costs the company less but places heavier financial burdens on employees.

Apple is reporting record profits and a healthy cash reserve, yet the folks working in Apple’s stores staffing its Genius Bars aren’t getting any real raises.

Skills and education are of no help when there are no job openings and wages are stagnant or declining for many skilled jobs.

Below is Economic Policy Institute research spelling out how the lack of jobs affects workers at all educational and skill levels.

Workers Don’t Lack Skills, They Lack Work And Decent Wages

By HEIDI SHIERHOLZ, Economic Policy Institute— We often hear the claim that hiring remains so low in this economic recovery because employers can’t find workers with the education and skills they need.

A look at the data, however, shows that this is not what’s driving today’s labor market weakness.

The figure below shows there is a massive job shortage right now relative to before the recession started at all levels of education.

While workers with higher levels of education face substantially lower unemployment rates, they too have seen a large percentage increase in unemployment.

Workers with a college degree or more still have unemployment rates that are close to twice as high as they were before the recession began.

At 7.8%, the unemployment rate is still more than three percentage points higher than the 4.6% average of 2007.

Unemployment is high not because workers lack the right education or skills, but because employers have not seen demand for their goods and services pick up enough to need to significantly ramp up hiring. It is not the right workers we are lacking, it is work.


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