According to this narrative, the problem is not an inadequate supply of family-sustaining jobs; it’s a workforce lacking in skills, training and education. The skills gap thesis has been spread by influential pundits like the New York Times‘ Thomas Friedman, top CEOs like Caterpillar’s Doug Oberhelman, and PIMCO hedge fund owner Bill Gross, who declared, “Our labor force is too expensive and poorly educated for today’s marketplace.”
In my home state of Wisconsin, the Milwaukee Journal Sentinel has repeatedly given lavish coverage to a November 2011 comment by Tim Sullivan, former CEO of Bucyrus International and special advisor to Gov. Scott Walker on workforce development: “We don’t have a jobs crisis in Milwaukee, we have an education crisis.”
But in a study released this week called “The Skills Gap and Unemployment in Wisconsin: Separating Fact From Fiction,” urbanologist Marc Levine, a professor of history and economic development at the University of Wisconsin-Milwaukee, applies a data-laden sledgehammer to this notion. And while Levine’s report focused primarily on Wisconsin, his critique of the “skills gap” notion has national implications.
Levine’s report decimates the skills gap thesis one point at a time:
- False: The skills of the workforce somehow dropped sharply between 2007 and 2009. Numerous studies by Nobel laureates, highly regarded economics institutes, and two former chairs of presidential councils of economic advisers all conclude that a sudden dropoff in workers’ skills over two years is utterly implausible as an explanation for massive unemployment. In the words of economist Heidi Shierholz of the Economic Policy Institute, “It is not the right workers we are lacking, it is work.”
- False: There is a vast pool of high-skilled jobs waiting to be filled. As Levine commented in the report, “Even if every unemployed person were perfectly matched to existing jobs, over 2/3 of all jobless would still be out of work.”
- False: Employers are trying in vain to attract skilled workers. If a “skills shortage” truly existed, employers would raise wages to attract workers with the special skills they seek. Instead, wages have fallen in Wisconsin since 2000, including in occupations like welding, where there is a supposed shortage of workers, Levine pointed out.
- False: Understaffed employers must make do with the skilled workers they have. A shortage of sought-after workers would lead employers to increase these workers’ hours. However, the report says, “average weekly hours worked in manufacturing have remained unchanged since 2000, while the average weekly overtime hours have actually declined by 12.8 percent since 2000.”
- False: New high-skill jobs have been created. Overall, Wisconsin retains a jobs deficit of 243,000, based on job losses since the Great Recession plus new positions needed for entrants into the labor market, according to a study by the Center on Wisconsin Strategy. Though Scott Walker came into office in 2011 famously promising the creation of 250,000 jobs during his four-year term, Wisconsin has ranked 42nd in job creation out of the 50 states. (more…)