Researchers find little evidence to support skills gap claims

A shortage of skilled workers is often the reason many employers say they struggle to find qualified employees to fill vacancies or expand their business. It's become such a concern that public officials in many states are looking for solutions to grow a skilled workforce to meet these needs.

However, an Iowa State University economic analysis of national and statewide employment, education and population data finds that some of the evidence used to support the debate is weak. Researchers Dave Swenson and Liesl Eathington say there are several factors contributing to hiring challenges, but a widespread lack of is not one.

"First, when employers say there's a skills gap, what they're often really saying is they can't find workers willing to work for the pay they're willing to pay," Swenson said. "If there was a skill shortage people would be working longer hours and workers would be getting higher wages. Researchers have yet to find that evidence in several categories where people are arguing that there's a skills gap."

Additionally, the economists say there has been a long-term shift of skilled labor moving to or other states, which makes it difficult for businesses in small, rural communities to find labor. Still, many business and state leaders tend to blame the shortage on a failure of the educational system or deficiencies in the .

Comparing apples to oranges

Accurately measuring the skills of the workforce is difficult to do and creates a challenge in assessing a skills gap, Eathington said. Data collected by the Bureau of Labor Statistics don't offer a complete picture of the skills required for a position. As an example, Eathington explained how similar positions at two manufacturing firms – one more traditional, the other more modern – may look the same on paper, but in reality have little in common.

"The traditional firm may still do things the old way, while the modern firm is adopting new technology. How each firm defines the same occupation and the skills needed for that job might be very, very different," Eathington said.

Simply comparing educational attainment statistics to employment data does not work to measure the skills needed by the workforce over time, she added. Using the two datasets to define a skills gap is like comparing apples to oranges.

Many studies compare certificate or degree completion statistics with the educational requirements for specific occupations, even though many of those jobs can be staffed by a range of people with apprenticeships, on-the-job training or incremental skill building within a firm. Without better metrics, and by relying only on educational completion data, on paper there appears to be a supply shortage relative to occupational demands when in reality there is no shortage, Swenson said.

Changes in workforce demand

To fully understand the forces at work, it's important to look at how recent recessions have changed the demand for workers. To provide a more in-depth look at the job loss, Eathington split middle-skills jobs into two groups – lower, middle-skills (jobs requiring a and minimal experience) and higher, middle-skills (jobs requiring some formal education beyond high school). She found a noticeable shift before and after the recession, and the biggest job losses occurred in the lower, middle-skills jobs.

Eathington also looked at enrollment and completion of community college programs that offer training for middle-skill positions. If there was a shortage or skills gap, she would expect enrollment in these high demand programs to increase. She found no correlation.

What she did find was that Iowa actually has more people with the education and training required for middle skills jobs than the national average given its occupational distribution. On paper, Iowa looks comparatively good.

"Understanding all these factors is important so that public officials don't overreact or try to fix a problem that doesn't exist," Eathington said. "It's taken as a given that we have an enormous backlog of unfilled skilled positions, but there really is no credible evidence that is so in Iowa."

"The term skills gap implies a deficiency in either the workforce or educational system or both. It is a sloppy term for a very complex set of issues related to employers and workers," Swenson added.

The findings of their analysis do not diminish employers' claims of hiring challenges. Swenson says rural areas are losing human capital as more people move to urban areas, but that is not a skills gap. And that means some businesses in Iowa and across the country will face some tough decisions.

"There's no evidence of market failure, social failure or any other kind of failure," Swenson said. "If employers can't find the resources to fill the need, they may need to move where more labor is available."


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More information: Exploring the Skills Gap in Iowa: www.icip.iastate.edu/sites/def … 0Gap%20in%20Iowa.pdf
Citation: Researchers find little evidence to support skills gap claims (2015, June 11) retrieved 21 May 2019 from https://phys.org/news/2015-06-evidence-skills-gap.html
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Jun 11, 2015
"First, when employers say there's a skills gap, what they're often really saying is they can't find workers willing to work for the pay they're willing to pay,"
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EXACTLY!!

Jun 11, 2015
They are willing to pay the least they can get away with given legal constraints, and do whatever they can to brink legal constraints. That's what they really mean.

There's another side to the story though. Apparently America's poorest aren't hurting all that bad though, because we still pay a football quarterback 20 million per year now in some cases, not to mention baseball and basketball players, and even if you don't watch professional sports, most of your cable bill eventually ends up in the hands of a professional athlete or team owner. It's not even possible to get cable internet (which is the best) without paying for the cable television service, which again the majority of it goes to things you don't even watch, and goes to people who make more money in a year than you ever will in your life, "He who robs from the poor and he who gives to the rich shall both come to lack."

You want fiscal equality? Start by restricting salaries for the wealthy.

Jun 11, 2015
Minimum wage laws fuel inflation, which doesn't solve the problem because the insanely wealthy have tax loopholes, and they just increase their prices in a cycle that drives the inflation even worse, and after it reaches a new equilibrium the cost of living is just increased and the new minimum wage is just poverty level again.

How do you stop that?

Tax and distribute really is the only actual solution to that. However, the U.S. is so far in debt at every level of government that realistically the only thing they could do with the money from the taxes is pay Russia and China (communists) the money we owe them since Capitalism is a failed system and always was failing from the start. The only way it has stayed afloat this long is the U.S. government cooks the books to make it stay afloat.

Guess what? Kim Kardashian just threw a multi-million dollar party, and plans on throwing one again in a few days. I think they Kardashians and Jenners of the world can afford to pay tax.

Jun 11, 2015
The concept of Civilization is supposed to benefit everyone, not turn 90% of people into defacto servants for the other 10%.

Guess what? Bill O'reilly thinks that's unconstitutional.

Who gives a 2 bit damn what the constitution says? It's immoral for one person to earn so much money for doing something like being a whatever they are, reality stars? Bimbos? I don't even know what to call them, or an athlete, and then blow it on senseless bullshit while other people have to work for a living and barely get by.

Envy? No. See Envy is a selfish emotion.

I could never live with myself if I made that much money and then blew it all on myself. I'd have to give most of it away to somebody that actually needs it. Them? No way, they blow it all on booze and parties.

Rationalism dictates that extremely wasteful spending is immoral, particularly in such cases where a person's income is itself based in stupidity to begin with.

Jun 11, 2015
Not getting what you believe is your fair and equitable share, eh?

And once you've "taxed and (re)distributed" everything so that everyone has the same amount of everything, those with ambition, drive, creativity and intelligence will feel sooooooo motivated to keep out-producing all the slackers and leeches that they'll just keep slaving away for nothing.anyway.

You're what happens when they teach Das Kapital as the ideal economic system from kindergarten and up. So what if you might have to kill a few billion people who don't agree with your philosophy? The remainder can all starve to death in perfect social justice with rainbows and unicorns because you've eliminated all the producers.

Jun 11, 2015
"Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as "bad luck."

― Robert A. Heinlein

Jun 11, 2015
Selfishness is not a virtue. Greed has not been sanctified.

And you are not "independent", but dependent on Nature and the rest of us, so stop the posturing.

Jun 14, 2015
@returners - "Minimum wage laws fuel inflation" Not quite correct. Doesnt help I agree, under the current system. Its really the current economic banking situation the fuels inflation and has done for decades. All governments have done is swept the affects of the banking industry under the carpet and hopefully someone else will deal with it. Guess what, we are the ones dealing with it. Fractional reserve banking is the main factor for inflation, and it is still going on. Used to be that a man could earn enough to have a housewife and children and adequately get by. Even here there was FRB. So then the wife needed to got to work. And FRB continued. Then there was cutting back. FRB continued. ETC... Until we have what we have now. Simplistic I know, but less is more, Oculms razor and all that.

Jun 14, 2015
@returners -
Minimum wage laws fuel inflation
Not quite correct. Doesnt help I agree, under the current system. Its really the current economic banking situation that fuels inflation and has done for decades. All governments have done is swept the affects of the banking industry under the carpet and hopefully someone else will deal with it. Guess what, we are the ones dealing with it. Fractional reserve banking is the main factor for inflation, and it is still going on. Used to be that a man could earn enough to have a housewife and children and adequately get by. Even here there was FRB. So then the wife needed to got to work. And FRB continued. Then there was cutting back. FRB continued. ETC... Until we have what we have now. Simplistic I know, but less is more, Oculms razor and all that.

Jun 15, 2015
"First, when employers say there's a skills gap, what they're often really saying is they can't find workers willing to work for the pay they're willing to pay,"
-----------------------------------------

EXACTLY!!


All this does is point to to the fundamental issue, which is that too many people are competing for the same jobs. People are flocking to cities, lured in by the promise of services and business opportunities, and end up lining themselves up to work for the same few greedy companies who find no trouble in hiring the next one down the line if you think the pay isn't enough.

It's got nothing to do with high CEO salaries - those are simply the result of the oversupply of labor.

And there's under-supply elsewhere: where there's actual work to be done, all the people have left for the cities in hopes of nicer living, and so the cost of labor is dispropotionately high for the employers in the rural areas.

The two versions are both true at the same time.

Jun 15, 2015
Fractional reserve banking is the main factor for inflation, and it is still going on.


The fractional reserve banking is simply producing the amount of money that people are trading with.

The real reason for inflation is that the amount of real value in the system is not keeping up with the amount of business going on. People are simply trading money for money - or services for services - and for that the banks create more money, which ends up inflating because nobody's producing more real value to back it up.

Having full reserve banking, or going back to Bretton-Woods and metal money, wouldn't help the situation because the fundamental problem is in the distribution of the labor in the marketplace: more people spend while fewer people make.

It would perhaps slow it down by limiting credit, but it wouldn't stop the overall shift of people from productive to unproductive occupations, and it would severely cripple the economy by making it inflexible.

Jun 15, 2015
"If employers can't find the resources to fill the need, they may need to move where more labor is available."

Or they may have to do what basically everyone else in the world is doing: train their own.
Get apprentices in there. Train them to the job Increase knowledge transfer from the old hands and also allow tiome for further studies outside (e.g. finance enrollment in unversity courses for one day of the week). Give them incentives to stay on afterwards.

It might not sound very lucrative at first if your company has never done this - but for companies that continually do this it pays in the long run.

Jun 15, 2015
@antialias_physorg -
...it would severely cripple the economy by making it inflexible.


And a centrally planned economy by comparison is flexible?

more people spend while fewer people make.


And why is that? Trade deals which send/allow manufacturing jobs abroad.

Jun 15, 2015
And a centrally planned economy by comparison is flexible?


I was comparing the inflexibility of full reserve banking or metallism to fractional reserve banking (FIAT), not central planning to the free market.

And why is that? Trade deals which send/allow manufacturing jobs abroad.


That certainly has a part, but the main effect comes from people trying to get off easy by moving into the cities, which decreases the cost of labor and wages in the cities, while increasing the cost of labor and wages - therefore making manufacturing more expensive - outside of cities where the majority of the industry is.

People move into the cities in search of nice easy desk jobs, and then get stuck there on minimum wage or government aid.

Jun 15, 2015
Or they may have to do what basically everyone else in the world is doing: train their own.
Get apprentices in there.


How are you going to get apprentices when all the young people are moving out of town?

All this represents extra cost to the industry, which is fixed in place to where their source of income is. A farm, a mine, a manufacturing plant, cannot arbitrarily relocate to find labor because they have logistics and resources to consider. Some family owned manufacturing business can't just uproot and buy land nearer to some city to relocate for cheap workforce, because the land prices up there are too high, because everyone else wants to be there too.

People can move, to a much greater extent than businesses. The fact that overall they don't is just an indication that they're finding or believing it easier to vote themselves more money than work for it.


Jun 15, 2015
Basically, the whole Banksters or 1% arguments are one huge red herring when 80% of the US population is working in the services sector, which exist mainly in the cities. The majority of people are trying to make a living by serving each other coffee or foot massages, or whatever.

The banksters and the high-paid CEOs are a result of this irrationality - not the other way around. They're skimming the money off the top when people compete with one another on who does the work on the cheapest just to have a job.

In the US, 2/3rd of the population is packed into thin slivers of land on the east and west coasts, all fighting each other over who gets to flip burgers on minimum wage. It's completely ridiculous. Get out of there. There's the entire middle of the country with forests and fields and open spaces to make a living.

Jun 15, 2015
@crass:
@antialias_physorg -

...it would severely cripple the economy by making it inflexible.

Not my quote. Please attribute quotes to the correct author.

Jun 15, 2015
In theory, no-reserve banking should work just as well as anything as long as there's control over what counts as money.

Banks don't own the money the create, even after the debt is paid back, because the money technically dissapears. The banks don't actually create the maximum amount of money they could even as it is, because in order to create money they have to lend it to someone, and in doing so they take a risk that they'll default, and in doing so the bank is left with a negative balance that they have to pay off through selling any collateral, or paying from their own money that they've accumulate through interest.

If they try to create more and more money by lending out more, the inflation just results in people paying their old debts back faster and faster, and they collect less and less interest.

The reserve portion in banking is simply so that the state can print money by releasing IOUs to the market, because the banks use them to shift the risk onto the gov.

Jun 15, 2015
Point being that since the government can't or isn't allowed to default, having the government IOUs in your bank is a means to fill up the negative balance you've accumulated by lending out money. That's the point where money is created from nothing - by the state and not by the banks.

In no-reserve banking, all of the money is created for the economy by the economy itself with the state taking part as a simple agent such as anyone else.

Fractional reserve banking means that some of the money on the market is issued by the state, and some by the banks, and the amount of money in circulation is controlled partially by the state.

Full reserve banking means that all of the money on the market is issued and controlled by the state. It's effectively pure chartalism.

https://en.wikipe...artalism

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