Now along comes a new paper from Alicia Sasser Modestino, Daniel Shoag, and Joshua Ballance presented this week at the American Economics Association’s annual conference that shows the skeptics were right all along — employers responded to high unemployment by making their job descriptions more stringent. When unemployment went down thanks to the demand-side recovery, suddenly employers got more relaxed again.
Proponents of the “skills gap” theory argue that good jobs go unfilled because there aren’t enough qualified candidates to fill them. If only coal miners, factory workers, and philosophy majors learned useful skills like coding or pursue high-paying low-skill dirty jobs like shoveling pig shit or crabbing, then we wouldn’t find ourselves constantly fending off weak employment numbers and decreasing wages.
If you’ve recently spent any time applying for work that you KNOW you’re well qualified for, you also know that this is a really stupid theory. Time and time and time and time and time and time again, economists and other researchers have demonstrated that the belief that Americans lack the specialized skills and training required to participate in the 21st-century labor market is highly exaggerated, if not totally false.
Criticisms of the “skills gap” argument have essentially argued that it’s “a corporate fiction” that shifts the blame for unemployment, underemployment, and low wages onto allegedly unambitious and unrealistic job seekers. What makes Modestino, Shoag, and Ballance’s paper novel is their contention that the bulk of the blame lay with employers who exacerbated high unemployment rates by making their job descriptions more prohibitive.
Again, this is no surprise to those of us who read a million job posts for entry-level jobs that required 5+ years of experience gathering data as it relates to the mating patterns of the Mountain Pine Beetle. Lord, if only my college education imbued me with any commercially useful skills…
In other words, the skills gap was the consequence of high unemployment rather than its cause. With workers plentiful, employers got choosier. Rather than investing in training workers, they demanded lots of experience and educational credentials.
And while job skills are obviously important, when the labor market is healthy employers have incentives to try to impart skills to workers rather than posting advertorial content about how the government should fix this problem for them.
So, the bright side is that as low unemployment numbers translates to better wages and more on-the-job training. How long this will last has yet to be seen considering the fact that the Pain Caucus controls three-quarters of the Federal government.
Although it’d be nice if Trump’s inevitable recession begins before he and the Republicans get the boot, I hope it doesn’t come too soon. As Yglesias and others have pointed out, the Obama Administration’s wholeheartedly embraced the “skills gap” myth. Let’s cross our fingers and pray the crash doesn’t come until Democrats have the chance to hash out a new macroeconomic agenda during the primaries.
In conclusion, Mike Rowe can suck it.