CHAPTER 1
A “Skills Gap” or a “Demand Gap”?
Not everyone is convinced the U.S. economy can achieve full employment. In fact, many
appear convinced that it cannot. Newspaper stories quote employers who struggle to find
skilled workers to fill jobs, as in this Associated Press story from July 2011: “…the president
of Ultra Scientific Analytical Solutions (John Russo) has found himself in a vexing spot,
struggling to fill openings that
require specialized training in a
Figure 1.11 Unemployment Rates of All Workers, and Workers in
state where the jobless rate is close
STEM and Non-STEM Occupations with at Least a
to 11 percent, the third-highest in
Bachelor’s Degree, 1994-2012
the nation. ‘It’s very difficult to
find the right person. I honestly
10%
think there’s a large swath of
9
unemployable,’ said Russo, whose
8
firm manufactures and supplies
7
All workers, all education levels
analytical standards.”81
6
“They don’t have the skills,” goes
5
the refrain. Frustrated employers
4
Non-STEM workers,
such as Russo appear regularly in
3
at least a bachelor’s degree
these articles to provide a touch of
2
empirical evidence and lend an air
STEM workers,
1
of credibility to the skills-gap theory.
at least a bachelor’s degree
0
Many top officials and industry
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
executives add their voice to the
Shaded areas indicate U.S. recessions
skills gap theory. In 2011, according
to a report by the National AssociaSource: Economic Policy Institute (2012), “STEM Labor Shortages? Microsoft report distorts
reality about computing occupations.” Analysis of Current Population Survey data.
tion of Manufacturers, there were
600,000 manufacturing jobs that
could not be filled because workers lacked the right set of advanced skills.82 President Obama,
during the 2012 campaign, often invoked the skills gap to describe the challenges facing the
U.S. economy in coming decades.83
The skills gap theory is basically about supply and demand: there is an inadequate
supply of workers available to meet employers’ demand for labor. And supply and demand
is precisely why the skills gap theory shouldn’t be taken seriously.
Today, the United States has more college graduates than ever before—30 percent of the
population, up from 26 percent a decade ago.84 Yet unemployment rates for most college
graduates in the STEM fields (Science, Technology, Engineering, and Math)—the crème de
la crème of the country’s skilled workers—are still higher than they were before the recession
began in 2007.85 See Figure 1.11. If employers were having trouble meeting customer demand,
we’d expect to see them schedule more hours for their current workers. No evidence exists
for longer workweeks, according to the Department of Labor’s Bureau of Labor Statistics.86
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? 2014 Hunger Report? 55
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