The Myth of the Labor Skills Gap

August 26, 2014

Economists have long argued that a skills gap is growing among the American workforce. Hundreds of businesses both large and small have echoed this sentiment, claiming that there aren’t enough qualified people to perform certain jobs. However, in most cases this line of thinking simply doesn’t add up. According to the Bureau of Labor Statistics, the number of unemployed people exceeds the number of jobs available in every industry. In durable goods manufacturing, for instance, there are approximately 576,000 idle workers for just 162,000 jobs.

Despite these numbers, though, many businesses still have trouble filling positions in fields as seemingly talent-rich as electronics manufacturing and construction. A growing number of experts argue that’s because many companies fail to provide adequate onsite training or competitive starting salaries. In regards to the former, a recent Accenture study showed that just 21 percent of U.S. workers received formal training at work in the five years preceding 2011. And just last year the U.S. Department of Labor found that the number of registered apprentices in the country had dropped to 287,750. Rather than provide in depth training, many companies elect to be extremely picky in their hiring process. This includes piling on job requirements that almost no average working person could have. Nevertheless, a recent survey found that 67 percent of companies “don’t feel like they have to settle for a candidate without the perfect qualifications.”

Then again, it’s pretty hard to find the perfect person without offering at least adequate compensation. And since the beginning of the Great Recession, few companies have been willing to be very generous with their workers’ starting salaries. That’s certainly not the case at the Lexington, Kentucky-based manufacturer Big Ass Fans. This boldly named company has never had trouble finding workers to make its enormous fans, which can stretch as wide as 24 feet across. That’s because Big Ass Fans has a reputation as a good employer that pays well and provides sizeable benefits. Its workforce has increased by more than 30 percent each year since 2009 and has an employee retention rate of 88 percent. So if a company called Big Ass Fans can find the right workers at the right price, why can’t other companies find them as well?



  1. Why have companies reduced their commitment to training since the recession?
  1. What message is being sent to people seeking jobs?


Source: Cait Murphy, “Is There Really A Skills Gap?” Inc., April 2014; Ann Belser, “Joblessness Not Due to Skills Gap, Experts Say,” Pittsburgh Post-Gazette, April 16, 2014. Photo by ILO in Asia and the Pacific.