Commentary | Jobs and Unemployment

It is not the right workers we are lacking, it is work

This piece originally appeared on U.S. News & World Report’s website

These days we often hear the claim that one of the reasons hiring remains so low in this recovery is that employers can’t find workers with the education and skills they need. For example, in his State of the Union address last week, President Obama said that he hears from many business leaders who “want to hire in the United States but can’t find workers with the right skills.”

While there are always changes taking place in any labor market that will create a degree of mismatch between the workers employers need and the workers who are available, the relevant question given the current crisis in the labor market is whether this mismatch is a key part of today’s unemployment. And the answer a resounding no. The unemployed currently far outnumber job openings; even if every job opening were filled immediately, there would still be more than 10 million unemployed workers in this country. Further, if employers’ inability to find suitable workers were a significant part of today’s unemployment problem, you would expect to find labor shortages in some sectors. But there are no major sectors where that is happening—unemployed workers dramatically outnumber job openings across the board, as can be seen here.

It’s thus clear that the main story isn’t that the economy is lacking the right workers, it is instead, across the board, lacking sufficient job openings. But could there nevertheless be a within-industry shortage of workers with high levels of skills and education? It is true that workers with high levels of education have much lower unemployment rates than other workers. But there has been a dramatic drop in demand for workers with even the highest levels of education. The figure below shows unemployment by education in 2007 (before the recession began) and in 2011, showing that while workers with higher levels of education do have substantially lower unemployment rates, these workers too have seen a large percentage increase in unemployment since before the recession started. Over the last four years all education categories have seen their unemployment rates roughly double.

The low demand for workers across industries and education levels underscores the fact that while job training programs can help specific individuals and communities they are not going to solve our national unemployment crisis. For that we need to boost demand so that employers have a reason to hire. Again, it is not the right workers we are lacking, it is work.