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Hey, Washington Post, Unemployment Doesn’t Equal a Skills Deficit

On Wednesday, The Washington Post found an explanation of the country’s labor woes worthy of its front page.

“Even as [Fresno] has one of the nation’s highest unemployment rates, it has thousands of job openings.” Michael A. Fletcher, a Post staff writer, said. He continued: “The dilemma is becoming more common across the country as employers report increasing numbers of job openings,but many of those jobs are not a good fit for those who are out of work.”

In Fletcher's mind, the widespread and unprecedented joblessness that has been left by the Great Recession’s wage is a disconnect, a disconnect between an excess of workers trained in one sector of the economy, and an excess of jobs in another:

Unemployment hovers at 16.9 percent, but managers at the 7,000-employee Community Medical Centers say they cannot find enough qualified technicians, therapists, or even custodians willing and able to work with medical waste.

The situation is much the same at Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week.

Educating unemployed American workers and increasing their skills may not be a bad thing, but a skills gap is not causing the sustained high unemployment around the country.

In a report released Wednesday by Economic Policy Institute, economist Rebecca Thiess looked at the labor market since the recession began three years ago. “We all know it’s been really bad,” Thiess says, “but we wanted to create a more comprehensive snapshot.”

One of the key questions Thiess asked in the report, titled “The Great Recession’s Long Tail,” was whether a skills divide—or, in economist-speak, structural unemployment—was the cause of the current 9.6 percent unemployment.

She concluded: unemployment is not being caused by a skills deficit; it is being caused by a lack of available jobs.

The labor market on a whole has 4.6 jobless workers per job opening, a statistic the Post did mention in its article. At the peak, there were over 6 Americans unemployed per job opening. Pre-recession, the jobless-jobs ratio stood at 1.8.

But Thiess’ analysis did more than look at the overall jobless-to-jobs ratio, she also broke down the numbers by industry to see if some industries had huge numbers of unemployed workers with few openings, while other industries could not find enough workers. It would have pointed to the skills deficit the Post described.

“No industry exists where there is either a balanced ratio of job seekers to job openings,” she says. (The report illustrates the point well in this graph)

Heidi Shierholz, another economist and EPI attending a press conference with Thiess, reiterates the point: “There is no industry where you see any kind of labor shortage, which is what you would need [to see] in order for this to be a structural problem. There is just a lack of jobs across the board.”

She also explains the importance of the debate: “If it’s structural, we want to do education and training to help unemployed workers make job transitions. If it’s a demand driven unemployment, we want to do stimulus, monetary policy, dollar policy and all the other things we can do to stimulate the economy.”

With the economy 11 million jobs short, “the government should be doing everything it can to get jobs back,” Shierholz says.

She adds, “You will definitely find certain firms who cannot find the workers that they need—that will always be going on to some extent." Which may explain why the Post could publish a reasonable sounding article about labor shortages, without actually being right.

So, the Post may be correct that in Fresno, Community Medical Centers cannot find “qualified technicians [and] therapists.” Jain Irrigation may not be able to find workers to run irrigation tubing machinery. But that does not mean American workers who are unemployed don’t have employable skills.

George Warner is a staff writer with Campus Progress.

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