For years it has been considered as fact that high unemployment is largely caused by employers unable to find qualified workers to fill millions of open jobs.
However, New York Times economics columnist Paul Krugman made a compelling case that the mismatch is a historic one and is not responsible for the high unemployment.
Just because there are 11 million unemployed Americans and 4 million unfilled jobs, Krugman argues, it doesn’t mean there is a correlation.
“Actually, in an ever-changing economy there are always some positions unfilled even while some workers are unemployed, and the current ratio of vacancies to unemployed workers is far below normal. Meanwhile, multiple careful studies have found no support for claims that inadequate worker skills explain high unemployment,” writes the Nobel Prize winner.
“Think about what we would expect to find if there really were a skills shortage. Above all, we should see workers with the right skills doing well, while only those without those skills are doing badly. We don’t. Yes, workers with a lot of formal education have lower unemployment than those with less, but that’s always true, in good times and bad. The crucial point is that unemployment remains much higher among workers at all education levels than it was before the financial crisis. The same is true across occupations: workers in every major category are doing worse than they were in 2007.”
