Skills gaps? It’s the money, stupid.

by reestheskin on 26/05/2016

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From Thijs van Rens in the HBR

It is usually taken for granted that the skills gap is a problem of skills supply, and public concerns often focus on a lack of STEM skills and soft skills. So proposed solutions tend to involve reforming education and worker training programs. The most popular approach has been to reduce tuition fees for selective fields of study, usually STEM majors.

However, I argue that this view is not correct. Research that I and my colleagues have conducted suggests that the skills gap persists mainly because employers are unwilling or unable to pay market price for the skills they require…..

Yet the skills gap remains, because the adjustments that workers and firms make will only eliminate the gap if wages reflect the relative supply and demand for various skills across occupations. But our data shows that this is not happening: Many jobs in industries that generate high profits (retail trade, educational services, mining, and forestry) tend to pay low wages and are therefore unattractive to workers, whereas jobs in industries that pay higher wages (finance, computer and electronics manufacturing, paper and printing) are not very profitable.

Via Stephen Downes