Sunday's column took on the skills gap shibboleth in Minnesota. That's the belief that the unemployment rate reflects a widespread mismatch between the skills employers need and the talents of those looking for work.
In other words, job seekers have the wrong skills or they live in the wrong part of the country or world.
This notion of a skills gap is the underpinning of those who believe the U.S. is suffering from "structural unemployment" rather than cyclical. The difference? Government stimulus efforts will do little if anything to lower the rate of joblessness. The economy simply needs time to correct itself. Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, summed up this view neatly about a year ago when he said,
... the Fed does not have a means to transform construction workers into manufacturing workers.
But if structural unemployment were the cause of our current woes, we'd be seeing wage inflation, substantially lower unemployment rates, or major labor shortages in some parts of the country. This is not happening. The U.S. shed manufacturing jobs, and retail jobs and transportation jobs and hospitality jobs because demand for those goods and services fell.
A number of readers phoned and wrote in response to the column, and the dominant tone was frustration:
I want to thank you for your article. I am temporarily working in a contract job, but was unemployed for two years before that. I have an engineering degree and am up to date on my quality engineering skills, but was always rejected by employers because they found someone else more qualified. I think my being over 50 hurt me.
Some additional thoughts:
- Are individual employers having difficulty filling some jobs? Absolutely. At Gov. Dayton's jobs summit, there were repeated mentions of a company in central Minnesota that's having trouble hiring Ph.D. level scientists and engineers. Guess what. So are companies in Silicon Valley. Who do you think is willing to pay more for them? A specific need is not the same thing as widespread skills gap.
- Do the ranks of the unemployed include people who don't have the requisite skills for some/most jobs? Undoubtedly. After all, an unemployment rate of 5 percent is considered full employment. There are some people who are leaving school, with or without a degree, that will face economic insecurity most if not all their lives. If educational outcomes worsen - more people drop out, or more people graduate without having mastered basic skills, that will be bad news for local economies.
- Why are skilled manufacturing jobs going unfilled? It could be because companies are being too picky. Maybe they don't want an older worker, or maybe they don't want to invest in training that could help a worker round out his/her skills. Or maybe America's manufacturers have shrunk their potential applicant pool by shipping all manner of manufacturing work - skilled and unskilled - to Mexico or China or other low wage regimes. The message, intended or not, is that those skills are not valued.
Minnesota has lost about 100,000 manufacturing jobs in the last decade. Meanwhile, it has added about the same number of jobs in "health care and social assistance," a category that includes nursing home workers and home health aides.
If you were in high school and had no plans to go to college, which industry would look more secure to you?