What ails the American worker? Republicans and Democrats, chief executives and certain academics all say they see a mismatch between workers' skills and employers' needs. The data see something different.
A specter haunts the job market. You've witnessed it on the campaign trail. You've seen it on TV. It is the idea that the skills of U.S. workers don't match the needs of the nation's employers.
This "skills mismatch" is routinely held up to explain why the unemployment rate is still at 8.2% three years after the Great Recession officially ended, and why nearly half of those out of work have been so for more than six months. The Romney campaign affirms that the skills mismatch "lies at the heart of our jobs crisis." In his State of the Union speech, President Obama quoted conversations with businessmen who can't find qualified workers, and then proposed "a national commitment to train two million Americans with skills that will lead directly to a job."
It is heart-warming to see Democrats and Republicans agree, but unfortunate that the thing they agree about may not be true.
In recent months, researchers from the Federal Reserve Bank of Chicago, the University of California-Berkeley, and the Wharton School have expressed skepticism about the existence of a national skills mismatch. A larger body of work, stretching back decades, paints a murky picture about how broad-based a problem worker skill level is. Despite this, policymakers have fretted about the issue for 30 years, in periods of high unemployment and low. If the research is far from certain, why does the skills-mismatch narrative stay with us? And by fixating on mismatched skills, are we ignoring a far bigger problem for the economy?