The Power of the Skills Gap Myth

Toni GilpinOne of the things you’ll see repeated often is the 600,000 skilled jobs in manufacturing that are going begging because we can’t find the right workers to fill them. And that figure comes from a National Association of Manufacturers report from a few years back. It’s based on the fact that when they surveyed manufacturing employers, about 5% of them indicated that they couldn’t find the workers they wanted to fill jobs in their plants. And so from that, the report extrapolated to declare that there were 600,000 jobs that were going begging.

The reality, though, is that when economists and academics have looked at the actual job market data they find that to be simply not true. Studies from Illinois, from the Wharton School in Pennsylvania, from Wisconsin, have found that this is simply a oft repeated meme that doesn’t have much basis in reality. If there were this terrific lack of skilled workers in manufacturing, we would expect to see wage increases for those workers — we would expect to see rising wages. When there’s a shortage of something, we expect to see prices go up. We would expect the value of that particular item to increase. In fact, however, wage rates for skilled workers have remained stable or have declined through this recession. So that’s a real problem in terms of the fact that it seems to defy market realities.

The CEOs and manufacturing executives who are promoting the notion of a skills gap — and that has become generally accepted, I’m afraid — find it very convenient because it helps in the general effort to devalue the cost of labor. It also allows them to offload the kind of on-the-job training they used to provide themselves onto the public. We’re seeing workers themselves absorb the costs of retraining — desperately trying to reequip themselves with the skills that are supposedly needed for jobs that really aren’t there. We’re seeing community colleges strapped for funds that are trying to figure out which are the best training programs they can offer. It’s very handy for business executives because it allows them the luxury of keeping wages low while also not having to offer the kind of training that they used to offer themselves in their own plants. So this serves them quite well and also helps to tap down workers who are looking to increase their own wages.

—Toni Gilpin
Interview of CounterSpin

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