Labor Market Statistics and Skills Gap Introduction

• 8.2 million job openings in America currently
• 7 million Americans actively job searching
• Millions more Americans gave up looking for work
• Companies complaining they can't find needed workers
• "Skills Gap" repeatedly cited as primary explanation
  • Skills of job seekers don't match job requirements
  • Presented as simple, elegant explanation for major problem
  • Actually "almost entirely made up"

Research Evidence Against Skills Gap Theory

• Harvard, Northern University, Federal Reserve study findings:
  • Analyzed 36 million job postings over 3 years
  • Skills/experience requirements directly proportional to unemployment rate
  • High unemployment = higher skill requirements, more skills gap complaints
  • Low unemployment = lower skill requirements, skills gap "disappears"
  • Companies hire "whoever they can get" when labor is scarce

Skills Gap as Wage Suppression Tool

• Companies post unreasonably high skill requirements
• Use skill "gaps" to justify lower salary offers than advertised
• Basic salary negotiation tactic disguised as market reality
• MIT report findings on IT help desk positions:
  • Most jobs require programming skills not actually needed
  • Programming equally useful in manufacturing vs IT help desk
  • Factory workers get on-the-job programming training
  • IT workers assumed to already know coding

Jobs with Alleged Skills Shortages

• Society of Resource Management report on hardest-to-fill roles:
  • Nursing, teaching, trades, social service work
  • Most don't pay enough for comfortable life in major cities
  • Entry-level positions particularly poorly compensated
• Trades apprenticeships:
  • Low pay until fully qualified
  • Need significant overtime or own business for comfortable salary
• Teachers and nurses:
  • Require college degree (unpaid training period)
  • Need additional on-the-job training
  • Extreme job stress, brutal schedules, lack of respect
  • Income hasn't risen with demand

Counter-Example: Tech Industry Success

• 2000s computer science/tech expansion
• Actual skills shortage with real rewards:
  • High paying, respected jobs
  • Good work-life balance
  • Smart people moved into career path
• Market correction occurred:
  • Now too many qualified programmers
  • Hundreds of thousands laid off in recent years
  • 5 years ago: "not enough programmers, hiring fast"

Corporate Training Industry Profits

• Allied Market Research data:
  • Corporate training market: $361 billion currently
  • Projected growth to $800 billion by 2035
• Industry relies on belief people are "one qualification away" from landing job
• Separate from traditional colleges/trade schools
• Siemens industrial equipment manufacturer example:
  • Paid for Atlantic article on apprenticeships
  • Targeted policy makers about "closing skills gap"
  • Real goal: create new pool of skilled workers to choose from

Immigration Policy Manipulation

• Skills gap used to justify skilled migration policies
• More pronounced in Canada, UK, Australia, Germany, New Zealand
• Benefits companies by:
  • Filling roles without upward salary pressure
  • More customers for products
• US H1B and EB3 skilled working visas:
  • Strict rules to protect American workers
  • Unreasonably high job requirements create artificial skills gap
  • Easier to hire overseas workers dependent on company sponsorship
  • Creates more loyal employees through visa dependency

Political and Economic Implications

• Politicians gain easy points discussing retraining programs
• Companies shift staff training responsibility to workers/government
• Skills gap myth "handwaved through" as essential policy measure
• Convenient excuse sweeping major job market issues "under the rug"
• Shifts blame to workers for not having "right skills or experience"