The findings of this study probably apply to Albuquerque and Bernalillo County as well.

University of Wisconsin Center for Economic Development

The Skills Gap and Unemployment in Wisconsin: Separating Fact From Fiction, February 2013, by Marc V. Levine

Executive Summary

The ‘skills mismatch,’ it is argued, is the central reason why unemployment remains high, even as job vacancies remain unfilled.

This widely held view, however, is incorrect.

• The consensus among top economists is that the skills gap is a myth. High unemployment is mainly the result of a deficiency in aggregate demand and slow economic growth, not because workers lack the right education or skills
• This conclusion, rejecting the skills gap/structural unemployment theory, has been confirmed in numerous recent studies
• Even if every unemployed person were perfectly matched to existing jobs, over 2/3 of all jobless would still be out of work. And this calculation understates the jobs shortage, as it does not include discouraged workers or those involuntarily working part-time.
• Beyond the anecdotes of local employers, the Wisconsin and Milwaukee labor markets show no statistical evidence of a skills shortage:
  • Wages:  Wisconsin wage “growth” lags the national rate, another sign that there is no labor shortage here.
  • Hours: Average weekly hours worked in Wisconsin are down 4.3 percent compared to 2000.
  • Occupational Projections: Occupational projections for the state reveal that 70 percent of projected openings through 2020 will be in jobs requiring a high school diploma or less.
  • Underemployment and Workforce Over-qualification is the inverse of the one commonly put forward: it is a mismatch of too many highly educated workers chasing too few “good jobs.”
• The study concludes with a brief analysis of: 1) why the “fake” skills gap, as The New York Times‘ Adam Davidson has called it, holds so much sway over policymakers in Wisconsin; 2) how the skills gap meme deleteriously diverts attention from other, more salient factors explaining joblessness here; and 3) why new workforce development policies, responding to an imaginary skills gap, will do little to improve the jobs situation in Wisconsin and in Milwaukee.

Anthony Carnevale of Georgetown, whose research is often cited
by skills gap proponents, put it this way: “Training doesn’t create jobs. Jobs
create training. And people get that backwards all the time. In the real world,
down at the ground level, if there’s no demand for magic, there’s no demand
for magicians.”

The complete report (1.7mb) is available in Adobe’s Acrobat format. Acrobat Reader is required to view the file. Use Adobe’s web site to download a free copy of Acrobat Reader.