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With 3.8 Million Job Openings Last Month, Is There a Skills Gap?

Last month, the Labor Department’s Job Opening and Labor Turnover Survey showed that there were 3.8 million job openings for the month of April. Groups like the U.S. Chamber of Commerce have pointed to the number of job opening as proof of a skills gap, arguing that there are not enough skilled workers to fill the available jobs, and unemployment would be lower if the workforce was better educated and more skilled.

But there are a few problems with blaming the worker for high unemployment. First, while 3.8 million job openings sounds like a lot, it is well below pre-recession levels.

3.8 Million Job Openings Still Below Healthy Levels

Source: Economic Policy Institute analysis of Current Population Survey data

And while job openings are still below pre-recession levels, unemployment is still high, and there are simply not enough jobs for everyone who is looking for one. As of April 2013, there were 3.1 unemployed workers for every job opening nationwide, and 3.86 unemployed workers for every job opening in West Virginia. While that number has been falling, it is still double its pre-recession level.

More Unemployed Workers Than Job Openings

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Source: Economic Policy Institute analysis of Current Population Survey data

Even if the economy continues its recent growth, it will be years before there are enough jobs for everyone who wants one.

Unemployment rates are elevated across education levels as well. The unemployment rate for college graduates is still double its pre-recession level, which is not what you would expect if there truly was a shortage of workers with a college education.

Unemployment Up For All Levels of Education

Source: Economic Policy Institute analysis of Current Population Survey data 

If businesses really needed workers, they would pay for them. But that hasn’t happened either. The median wage for college graduates has gone down in the past five years, when the opposite should be happening if there is a skills gap.

Wages Down For College-Educated Workers

Source: Economic Policy Institute analysis of Current Population Survey data 

In fact, low pay may be the reason why there are jobs going unfilled. And businesses aren’t trying very hard to fill them. The National Bureau of Economic Research has found that “recruiting intensity” is low, meaning that businesses aren’t trying very hard to fill their openings, like through more advertising or increased compensation.

There is no doubt that improving the education and skills of the labor force, both nationally and in West Virginia would be a good thing. But it is disingenuous to blame high unemployment on the so called “skills gap.” There are job openings, but there are far more people looking for jobs. And businesses that can’t fill their openings should try raising their wages before blaming workers.

2 Responses to “With 3.8 Million Job Openings Last Month, Is There a Skills Gap?”

  1. Patrick says:

    Your second chart should read “unemployed workers per job opening.” -patrick

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