Most people agree that the U.S. economy has been characterized in the past decade by extreme wage inequality and persistent unemployment. Yet, there is debate about the causes.
Two interpretations have been very influential: that inequality is driven by demand for skills that are out of reach of many workers and, in a similar vein, that persistent unemployment is caused by a mismatch between what firms seek and what potential employees can provide.
Given manufacturing's prominence in the U.S. economy and in the skills-mismatch debate, examining industry trends offers a solid way to assess the skills-mismatch hypothesis. Assessing the truth behind this debate is particularly important for black and Latino workers, who continue to suffer incredibly high unemployment rates.
In a recent report, my colleague Andrew Weaver and I assess the claim that the manufacturing industry is experiencing a shortage of skilled workers by using an original, nationally representative survey of manufacturing establishments that directly and concretely measures skills needs as well as the level of job vacancies. It showed that the reality is considerably more complex than often described.
The claim that a shortage of skilled workers has exacerbated inequality has gained traction but it is not supported by the data. While skill requirements are real and have increased over time, the knowledge and abilities manufacturers seek are well within the reach of the vast majority of Americans. For instance, while 38 percent of manufacturing firms require math beyond simple addition, subtraction, and multiplication, the type of math employees need to be able to handle are standard features of a good high school education and part of the curriculum for most community-college students.