How did the Skills Gap descend so quickly?

“The structure of a modern economy does not change that quickly. The demographic composition of the labor force, its educational breakdown and even the industrial mix did not differ much between 2007 and 2009.”

-Edward Lazear

WHILE doing some research on a post re: the skills gap in Maine, I came across something rather interesting.  Both nationally and at the state level, policymakers have addressed the skills gap–the mismatch of skills supplied by workers and skills demanded by workers.  This often occurs when one industry sheds employment and those recently laid-off workers do not have the requisite skills to find employment in another industry.  For instance, someone recently laid off in the manufacturing industry cannot simply turn-around and gain employment in nursing.

While structural shifts in our economy occur, and undoubtedly there are businesses and even industries finding it difficult to fill positions, there is little evidence of an economy wide skills gap; either at the state or national level.

What’s really interesting, however, is the speed at which the skills gap argument came about.  For instance, the following is from the 2014 Manpower Talent Shortage Survey.  The graph, according to proponents of the skills gap argument, would evidence a skills gap:

http://www.manpowergroup.us/campaigns/talent-shortage-2014/assets/img/ts_chart1.jpg

 

There is a clear downward trend from 2007 to 2010, undoubtedly the result of the economic downturn of 2007-2008, but then an almost unbelievable spike from 2010 to 2011.  While unemployment can erode the skills of workers, and structural changes in an economy require workers (employed or unemployed) to change, these changes do not occur that quickly.

Moreover, the U.S. economy just recently recovered jobs lost during the 2008 recession:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=EkT

So the obvious question is who did these changes occur so quickly, particularly when the potential worker pool (unemployed persons) swelled?

In Maine, the evidence is a little less scientific but suggests that the skills gap is of a post-2008 vintage.  Running searches for “Maine Skills Gap” on Google for 12/31/2010 and earlier and 1/1/2011 and later yields a dichotomy of coverage and discussion about the skills gap in Maine. In fact, the policy discussion vis-a-vis demographics that dominated debates was the brain drain; substantively different than the skills gap and even contradicts the skills gap.  Succinctly, the brain drain is the result of over-supply (grads/young people seeking greener pastures elsewhere), the skills gap suggests under-supply (we have the green pastures but no one looking for them).

Moreover, the composition of the Maine workforce has improved in terms of educational attainment.

So the question remains; how did the Maine economy shift so suddenly and bring on the skills gap?

John Haskell

About John Haskell

John graduated from the University of Southern Maine with a degree in Political Science, and from the University of Maine School of Law. He has worked in both the public and private sectors, and currently, works with a small business services company in the Mid-Coast area.