The 'Skills Missmatch': Failing To Meet Job Demand

News this week about the unemployment rate wasn't good. The U.S. economy created slightly less than 100,000 new jobs, less than what many economists expected. The unemployment rate dropped slightly, possibly because of people who stopped looking for work. NPR's Steve reports on whether the jobs lost during the great recession will ever come back.

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SCOTT SIMON, HOST:

This is WEEKEND EDITION from NPR News. I'm Scott Simon. More dismal economic news this week. The U.S. economy created slightly fewer than 100,000 new jobs - worse than what many economists expected and what millions of Americans had hoped for. The unemployment rate dropped slightly, but possibly because half a million Americans just gave up and stopped looking for work. NPR's Steve Henn reports on whether the jobs lost during the great recession will ever come back.

STEVE HENN, BYLINE: There's this persistent story about the U.S. economy and why the unemployment rate here has remained so stubbornly high for so long. Former President Bill Clinton offered a version of this story at the Democratic National Convention earlier this week.

PRESIDENT BILL CLINTON: We need a lot more new jobs, but there are already more than three million jobs open and unfilled in America, mostly because the people who apply for them don't yet have the required skills to do them.

HENN: Here in Silicon Valley the idea that there is a mismatch between the skill set of unemployed workers around the country and the jobs which actually open right now is almost an article of faith.

GARY SWART: Yeah, absolutely.

HENN: Gary Swart is the president of oDesk, a company that helps other firms find temporary workers who can do jobs remotely.

SWART: The demand that we've seen year on year is growing off the charts, and that's where the skills mismatch is. There is demand for online skills.

HENN: Here, it's not uncommon to see billboards on highway encouraging computer programmers with hot skills to send resumes. Swart says oDesk has thousands of temp jobs right now for programmers of all stripes. The problem, so this story goes, is that the structure of our economy has fundamentally changed. The folks who are looking for work right now don't have the skills growing businesses need.

BRAD DELONG: Yes, the economy is always changing.

HENN: Brad DeLong is a professor of economics at Berkeley.

DELONG: The jobs are always changing. The jobs have been changing for at least two centuries. First, with the enormous decline in agriculture and the rise of manufacturing, construction and mining.

HENN: Then the rise of the services. But these transitions can be wrenching, and DeLong's been worried for years - since the financial crisis began - that one could be going on again. Today, however, he's no longer convinced. Take those three million open jobs that former President Clinton mentioned. That sounds like a lot of jobs going begging. But Delong says actually it's not.

DELONG: No, no. We expect when the economy is running fine for it to have four million vacancies and about six million unemployed.

HENN: That's the sweet spot.

DELONG: And right now we have 11 million unemployed and three million vacancies.

HENN: And if companies were really struggling to fill those jobs, you'd see he salaries go up.

DELONG: You tend to see industries and occupations in which labor is short having not only a lot of vacancies but rapidly rising wage and salary levels.

HENN: And outside a few very limited examples, like tech, that doesn't seem to happening. Instead, now DeLong thinks the problem is a lack of demand across the economy. Consumers, businesses and the government simply are not spending enough money or buying enough stuff to put everyone back to work. DeLong believes until that changes, unemployment will stay high. Steve Henn, NPR News, Silicon Valley.

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