Unemployment: A Jobs Deficit or a Skills Deficit?

Millions of Americans remain unemployed nearly a year and a half after the official end-date of the Great Recession, and the nation’s official unemployment rate continues at nearly 10%.

Why? We are being told that it is because—wait for it—workers are not qualified for the jobs that employers are offering.

Yes, it’s true. In the aftermath of the deepest downturn since the Great Depression, some pundits and policymakers—and economists—have begun to pin persistently high unemployment on workers’ inadequate skills.

The problem, in this view, is a mismatch between job openings and the skills of those looking for work. In economics jargon, this is termed a problem of “structural unemployment,” in contrast to the “cyclical unemployment” caused by a downturn in the business cycle ...

First published in January-February issue of "Dollars and Sense Magazine" (dollarsandsense.org). Used with permission.