Skills Gap Proponents Keep Moving the Goalposts

LITTLE need to rehash much of what I have said about the skills gap (see here, here, here, and here), but a recent article from the Harvard Business Review titled Employers Aren’t Just Whining – the “Skills Gap” Is Real.  In this article, James Bessen picks up where other skills gap proponents leave off in their argument.

If there were a skills gap (i.e., labor shortage), then wages should be accelerating.  However, skills gap proponents will counter that you cannot look at economy wide wages, and instead you need to look at wages within specific industries to find evidence of a skills gap.  Fair enough, but when we look at wages within specific industries, we don’t see wages rise.  This is where Bessen picks up the baton:

The wages of the median worker tell us only that the skills of the median worker aren’t in short supply; other workers could still have skills in high demand. Technology doesn’t make all workers’ skills more valuable; some skills become valuable, but others go obsolete. Wages should only go up for those particular groups of workers who have highly demanded skills. Some economists observe wages in major occupational groups or by state or metropolitan area to conclude that there are no major skill shortages. But these broad categories don’t correspond to worker skills either, so this evidence is also not compelling.

To the contrary, there is evidence that select groups of workers have been had sustained wage growth, implying persistent skill shortages. 

Basically, within an industry, we should see wages at the higher end of the wage spectrum rising.  So which industry does Bessen suggest is experiencing this?

Some specific occupations such as nursing do show sustained wage growth and employment growth over a couple decades.

“Sustained wage growth and employment growth over a couple of decades” is a little vague, and the lack of numbers to support his argument is telling.  And sure enough, I checked the BLS’s data, and as I noted in the comment section of Bessen’s article, here are the 90th percentile real hourly wages for registered nurses in the U.S. from 2006 – 2013 (in 2013$):

2006 – $52.06

2007 – $47.15

2008 – $47.99

2009 – $48.92

2010 – $48.87

2011 – $48.12

2012 – $46.21

2013 – $46.31


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.