Nice column by Arthur Foulkes in the Terre Haute TribStar entitled Closing the Skills Gap: The Issue: Matching employee job skills with job openings. He notes that, among the political class, there is little doubt that the skills gap exists and that it is a significant source of unemployment. In the academic community, however, the consensus seems to be that the skills gap is a myth.
High unemployment is mainly the result of a deficiency in aggregate demand and slow economic growth, not because workers lack the right education or skills. The skills of the labor force did not suddenly erode between 2007 and 2009, when the unemployment rate more than doubled, so it makes no sense to claim that high unemployment in 2009 and through today has been caused by a soaring number of “unqualified” workers.
Wages are another pretty significant tell. If there was unmet demand for skilled laborers, you’d see wages rising to attract the existing supply. That’s not happening.
Nevertheless, it’s a pretty good bet that Indiana is going to spend money based on legislators’ unfounded belief in this myth; creating the Indiana Career Council and handing out a contract for development of a “Workforce Intelligence System.”
My sense is that the love for the skills gap myth has to do with the underlying desire to view the economy as a morality play where the hard working and clever prosper while the only ones who suffer are those who are too lazy or stupid to make money. The idea of a skills mismatch gap allows lawmakers to “do something” without disrupting that narrative too much. After all, what else are we supposed to do? You can’t just stimulate demand by giving people money to spend or having the government hire them to build infrastructure because freedom and communism. Also too, immoral.
The Republicans are far too enamoured with their Horatio Alger mythos to admit that a service economy has perpetually high unemployment and those seeking public assistance are not all before the government due to indolence or moral weakness.
It’s the myth of “a fortune is out there somewhere” and “there’s a good job for everyone” that keeps inflating the student-loan bubble. The Republicans will die before they abandon this myth and allow student-loans again to be included in bankruptcy.
Further, when did we allow this immoral cost-shifting of job education from the employer to the employee? Companies used to have on-the-job training, training programs, apprenticeships, etc. Now, a worker is expected to fork over thousands to obtain a shallow and non-transferable certification or degree for a job that he or she may well find unsuitable and intolerable a few months into employment.
“My sense is that the love for the skills gap myth has to do with the underlying desire to view the economy as a morality play where the hard working and clever prosper while the only ones who suffer are those who are too lazy or stupid to make money. ”
This is true. But another part of the story – and perhaps a larger part – has to do with company owners and managers being able, largely successfully, to deflect criticism of their own shortcomings away from themselves and onto workers.
You saw this in the late 70’s/early 80’s when Japanese imports started taking the market away from US makes. Instead of putting the focus where it belonged – on why US companies were designing cars people didn’t want to buy, were behind on innovation, and moved too slowly, most of the focus turned to “lazy, entitled workers” and unions.
As if people would be driving Chevy Novas and AMC(?) Gremlins instead of Honda Civics if only American workers were less lazy. Completely ignoring the fact that these were poorly designed underpowered unreliable automobiles…and would have been so even if Japanese workers had assembled them.
(Which is not to say that US workers were models of efficiency; it’s just that they were far, far less responsible for the state of US automaking in, say 1982, than Lee Iococca and friends were. And somehow US workers were able to be productive when making Japanese cars. And were likewise able to be productive when making trucks and SUVs).
You see the same thing with blaming unions for management failures. Not that unions are necessarily always good or wise – but that ignoring the far greater sins of management gives a skewed version of what works.
Double bonus if they get the taxpayers to subsidize the training the company would otherwise have to pay for.
Triple bonus if they can bundle the non-dischargeable loans to get the education to work at their companies as securities, collect the interest on the bundled loan traunches, write derivatives on these securities, get tax abatements and subsidies to open companies that hire the workers who paid for their own training for which you’re now collecting interest from these same workers while they pay sales and income taxes to fund their own jobs.
This is some Koch Brothers’ capitalism on cocaine, driving a hot rod running methanol.
But if you discharge your student loan debt, you’re morally corrupt, while a company needing help merely enters Chapter 11, keeps the salaries and bonuses for its employees, wipes out billions in common stockholder equity, and comes out the other side freshened from a session at the corporate spa jubilee.
You, my friend, have a future in high finance as a “maker.”
Ahem, it’s “job creator,” in FNC-speak, thank you.