NCPA - National Center for Policy Analysis

A Detailed Look at Workforce Skill Shortages

August 8, 2011

As the United States continues to fight its way out of the Great Recession, more attention has been directed to the question of why it has taken so long for workers to find reemployment.  In economic parlance, this is primarily a question of "structural unemployment."  Brian Points, a consultant and project manager at Economic Modeling Specialists Inc. (EMSI), describes the type of unemployment that results from a mismatch of worker skills and the skills demanded by employers.

  • As of April 2011, there were 13.2 million unemployed workers and 2.9 million unfilled job openings.
  • In other words, April's 8.7 percent unemployment rate could have been lowered one percentage point (to 7.7 percent) if just half of the advertised job vacancies were filled by unemployed workers.
  • Obviously, it is not realistic for every position to be filled immediately, but the odd pairing of high unemployment and high job vacancies illustrates a structural employment issue, which may have worsened in recent years.

A question that has perplexed jobseekers and economists alike is how there can be so many people looking for work and yet so many unfilled positions in the economy.  In an attempt to answer this question, EMSI has taken a fresh look at the skill gap issue using historic jobs and earnings data to determine which segments of the labor market are growing and which are diminishing.  So what can be gleaned from this analysis?

  • To start at the highest level, this certainly indicates employers' preferences are shifting away from manual labor occupations and toward knowledge-based occupations.
  • Aggregating the data shows that of all occupations in the potential skills shortages category, 66 percent are in the fields of health care; education; business and finance; and architecture and engineering.
  • Conversely, of all occupations in the potential surpluses category, 63 percent are in the fields of production; construction and extraction; and installation, maintenance and repair.

Source: Brian Points, "A Detailed Look at Workforce Skill Shortages," New Geography, August 4, 2011.

For text:


Browse more articles on Economic Issues