Sunday, September 4, 2011

Job Mismatch and Skills Shortages

Dave Nicklaus has an interesting article in today's Post-Dispatch about how many local firms have job openings but are having difficulty finding people with the right skills.  Nicklaus is certainly right that there should be "long-term thinking about the supply side" of the labor market to make sure that people have the skills demanded by potential employers.  This is true at any time, but the lack of such policies in the past make it more difficult to climb out of our current mess.  Personally, I don't really see the lack of lifetime learning discussed in the article to be that big of a deal relative to the lack of learning during the first 18 years of many persons' lives. 

On many occasions prior to the recession I would come across someone in the retail sector who was so incompetent that I was amazed that he or she was even employed.  I'm pretty sure that those people are currently among the ranks of the unemployed.  But when the economy is booming, even the incompetent seem to be in demand and firms are not as fussy as they are now.  If the economy wasn't in the toilet, imagine how in-demand the millions of unemployed-but-competent people would be. 

In short, with a strong economy skills shortages and mismatches are much less important.  The priority remains getting the economy going, which requires tax reform and a reversal of most of the regulatory burden and anti-business policies that have been put in place the last few years.  And, as always, we should be working to improve basic education.  Without the basics, no amount of targeted job retraining and continuous talent development will be enough to make much of a dent.