Democrats and Republicans may not agree on much, but they do agree that American workers need help closing the “skills gap.” That would be the vast gulf separating available, middle-class jobs from the unemployed or underemployed people who might be interested in filling them. According to the seemingly ubiquitous skills gap theory of persistent unemployment, jobless workers just need some better training to get themselves above water.
In fact, ameliorating the skills gap became the subject of a rare bipartisan accord on economic policy in July of this year, when President Barack Obama signed off on the bipartisan Workforce Innovation and Opportunity Act, a law intended to reform federal job-training efforts and “give communities more certainty to invest in job-training programs,” as Obama said at the bill’s signing event.
In the following months, the White House has only intensified its efforts to boost job training. Late last month, Vice President Joe Biden – the administration’s lead point person on federal job training – announced $450 million in community college grants for the purposes of job training. And last week, when the White House made its big bid for the millennial vote in 2014, “skills” factored heavily into the agenda.
It may sound nice, and it may be generally inoffensive to people of most political stripes, but whether it works is another matter. Much of the available economic data suggests that the “skills gap” is a mirage; and if that’s the case, then just providing jobless workers with new skills might have limited utility at best.
“When we’re at full employment and we’re starting to hire back ex-felons and people who haven’t worked a long time, or we’re bringing people back into the labor market, that’s when job training could make a difference,” Ross Eisenbrey, vice president of the left-leaning Economic Policy Institute, told msnbc. “But I think we’re a long way from that, except in spots.”
When jobs aren’t available, it doesn’t matter how qualified an individual unemployed person happens to be. Job training works best when there’s a large supply of jobs waiting to be filled, and managers are simply having trouble locating unemployed people who have the right skills to take on those open positions. Obama has, on occasion, mentioned that various employers have told him they “want to hire in the United States but can’t find workers with the right skills.” But data from the Bureau of Labor Statistics shows that there are still far more unemployed people – of any skill level – than there are open jobs on the market. And even in so-called STEM (science, technology, engineering, and mathematics) occupations, unemployment is high. When people with doctorates in the sciences are facing a poor job market, it suggests that elevated unemployment probably doesn’t come from a lack of scientific training on the part of the jobless.So what is perpetuating high unemployment? Jared Bernstein, Biden’s former chief economist and a senior fellow at the Center on Budget and Policy Priorities, named a laundry list of other factors in a recent American Prospect essay: “It’s the weak economy, not yet recovered from the Great Recession, it’s persistently high unemployment robbing workers at almost every skill level of the bargaining power they need to claim their fair share of the growth, it’s terrible fiscal policy, it’s large and persistent trade deficits, it’s imbalanced sectoral growth as finance booms while manufacturing lags,” he wrote.
But Bernstein does think job training programs can help under the right circumstances. Speaking to msnbc, he said “sectoral training” – identifying sectors of the local economy which do have available jobs, and matching workers up with those positions – is good policy.
“The key factor looks to be how connected [job training programs] are to the local labor markets in which they exist,” he said. “If you just impart a set of skills to job seekers that are generic and don’t link up in a pretty granular way to specific labor demands in their area, they can easily find themselves all dressed up with nowhere to go.”
The White House’s job training initiatives, spearheaded by his former boss, are a step in the right direction, he said. The $450 million being allocated to community colleges is part of a strategy to encourage partnerships between the schools and employers in the surrounding area. The hope is that those schools will train students in skills which those employers happen to be looking for, rather than imbuing them with a non-specific and unusable set of talents.
“It looks to me that they’re on the right track in terms of the sectoral employment idea I’ve been stressing,” he said. But training alone won’t bring the U.S. within shouting distance of full employment.
“A lot of commentators seem to be looking out on the American economy and concluding that the reason unemployment remains elevated is a supply-side problem, that workers aren’t bringing the right skills to the job market,” said Bernstein. “But in fact, the evidence points to demand in this case, by which I mean an inadequate quantity of jobs. So you’ve got to worry about both sides.”