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Report: No Skills Gap in Wisconsin or Beyond

There’s no skills gap holding back recovery in the job market or the broader economy, despite contrary claims from some politicians and CEOs. At the University of Wisconsin-Milwaukee, History, Economic Development and Urban Studies professor Marc V. Levine reviewed scientific literature on the skills gap concept and found no evidence to support it.

The skills gap claim is common:

According to this narrative, the problem is not an inadequate supply of family-sustaining jobs; it’s a workforce lacking in skills, training and education. The skills gap thesis has been spread by influential pundits like The New York Times' Thomas Friedman, top CEOs like Caterpillar’s Douglas Oberhelman and PIMCO hedge fund owner Bill Gross, who declared, 'Our labor force is too expensive and poorly educated for today’s marketplace.'

Levine also found that Wisconsin politicians and business executives supported the idea that the skills gap was the reason for the jobs crisis in the state. He then examined major academic studies and data from the United States, Wisconsin and Milwaukee labor markets.

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. The skills of the labor force did not suddenly erode between 2007 and 2009, when the unemployment rate more than doubled, so it makes no sense to claim that high unemployment in 2009 and through today has been caused by a soaring number of “unqualified” workers.

Most tellingly, more than three years after the official end of the Great Recession, there remain over three times as many unemployed workers as job openings in the U.S. Even if every unemployed person were perfectly matched to existing jobs, more than two-thirds of all jobless [workers] would still be out of work.

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