Lazear: Sluggish growth is our problem, not a mismatch between skills and jobs

by Ryan Streeter on September 4, 2012. Follow Ryan on Twitter.

We’ve grown so accustomed to hearing that our sluggish economy is in part the result of a mismatch between the kinds of jobs employers offer today and the skills today’s workforce has, that we’ve come to accept it as a given. That is, a good number of pundits and policy advisors have accepted as fact that we are going through a structural change in our economy.

Not so, says Eddie Lazear.

Writing in today’s WSJ, Lazear says that:

[M]ismatch increased dramatically from 2007 to 2009. But just as rapidly, it decreased from 2009 to 2012. Like unemployment itself, industrial mismatch rises during recessions and falls as the economy recovers. The measure of mismatch that we use, which is an index of how far out of balance are supply and demand, is already back to 2005 levels.

Whatever mismatch exists today was also present when the labor market was booming. Turning construction workers into nurses might help a little, because some of the shortages in health and other industries are a long-run problem. But high unemployment today is not a result of the job openings being where the appropriately skilled workers are unavailable.

Growth will get a lot of those “mismatched” displaced workers back to work.

Still, one has to wonder how much the recession has shown the degree to which employers were “getting by” with workers whose skills were below where they should have been. On the ground level, one keeps hearing anecdotally how frustrated employers can’t find workers with the skills they need. It seems endemic. We clearly need a whole new set of education and employment preparation tracks that match young people’s aspirations with the kinds of promising vocational paths out there.

That said, as Lazear’s research shows, we are as mismatched now as we were before the recession. The real problem is that our economy isn’t growing. For that, we need a more dynamic entrepreneurial environment with a greater number of new companies forming every year, as I’ve written about often on this blog.