The Truth Behind the Skill's Gap

Nancy Anderson
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Unemployment is at less than 4 percent for the first time since 2000, as of June 2018, but there's more to that figure than meets the eye. Companies have as many job openings as there are people seeking jobs, a first for the labor market. The truth is, Americans are struggling to find high-paying jobs that cover all the bills. Policymakers blame the skills gap, but that assertion is a myth.

Other Reasons for Unemployment

People in the labor market face barriers to employment due to stagnant wage growth. While retail growth continues to climb and the stock market makes steady gains, wages for average workers remain the same or don't grow much at all. For employers to compete, they need to offer higher wages to lure top talent, and that has not happened in this robust hiring market yet. The caveat with rising wages is that it costs companies more money to onboard new people, which raises the costs of consumer goods, and that could lead to inflation because the average American would spend more on basic items.

Costs Not Going Down

While wages have not increases in the June 2018 labor market, costs of child care and health care either increased or remained the same. In other words, for people to transition to higher-paying jobs, they may need to pay more for the ability to even work those jobs. The costs of more health care or more child care may offset any wage gains from a high-paying position.

More Training

Refuting the notion of a skills gap stifling employment is the fact that employers are willing to train incoming workers who lack some qualifications when the labor market tightens. Again, this stems from a highly competitive atmosphere where top talent can find any job that's out there. Companies may also adjust job requirements based on the skills that people actually have, because having someone onboard who is trainable is better than having an unfilled position. Employers with lower-skilled and lower-paying jobs may not offer training as an incentive to come and work for them.

Decreased Demand

As workers settle into their jobs, it decreases demand for other positions. Workers may not want to move to another area, they may eschew dangerous work, or they simply might feel comfortable and don't want to shift to unfamiliar workplaces just yet. Hostile workplaces may also play a factor in barriers to employment.


Attributing labor market snafus on a lack of worker skills means policymakers do not take a look at the real problems facing workers. Investments in education and training, without the staggering costs of student debt, are one way to solve the problem of workers' inability to land high-paying jobs. Lowering costs and barriers to employment, such as impoverished neighborhoods and expensive child care, are another way to foster a better job market.

If the lessons of the Great Recession are any indication, the labor market may look rosy for now, but then one unforeseen factor might make the economy come crashing down. Plus, unemployment is already low, even though companies still need to fill important positions. What strategies do you use to try to find higher-paying work?

Photo courtesy of Laura Mae Noble at


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