Ivanka Trump’s new program wants to fight unemployment by closing the ‘skills gap.’ But that’s a fundamental misunderstanding of how the economy works.

August 15, 2020 Insider

White House advisor Ivanka Trump recently unveiled a new job training initiative that encouraged struggling out-of-work Americans to simply “Find Something New” — that is, train for a new career if they find themselves out of work. The website for the initiative states that “jobs are changing — and the pandemic has accelerated the pace.”

While it is true that the pandemic and the subsequent policy response have forced millions out of the labor force, Trump’s diagnosis of the problem as a “skills gap” and her proposed solution, to push workers into skills training programs and different careers, is wildly off base. And even worse, it is a distraction from the real, and very serious, economic problems that actually need to be addressed to help workers and the economy.

The persistent ‘skills gap’ myth

This is not the first time leaders have attempted to blame mass unemployment on a lack or mismatch of skills. In fact, it seems that whenever unemployment rises, policymakers and others are quick to decry a “skills gap” — the idea that there are a lot of jobs ready to be filled  but many workers without jobs don’t have the necessary skills to fill them — that coincidentally disappears when unemployment goes back down.

For example, economist Dean Baker recently pointed out that in 2010 — just one year after the official end of the Great Recession — the New York Times published an article about how the manufacturing industry was experiencing a skills gap. Yet within the next decade, the United States saw an 11.3% increase in manufacturing jobs — all without any major changes to the skills of manufacturing workers.

And a recent New York Times article suggested the “coming wave of automation and digital technology” and demand for more skilled workers has arrived with the growth of telecommuting in the coronavirus economy.

But blaming staggering unemployment numbers on the skills gap, as Trump is trying to do, ignores that the United States is in the midst of a pandemic and accompanying economic crisis that grows more devastating by the day, in large part because of the Trump administration’s unwillingness to act to stem the virus or provide sufficient economic relief.

In the last four months, more than 30 million people have filed for unemployment, millions have lost health coverage, and thousands are facing homelessness as eviction moratorium across the country expire. The crisis is even more acute for Black and brown workers, who experience persistent labor market discrimination even in the best of times, and right now are more likely to be unemployed.

It’s clear that millions of Americans are out of work not because they lack the skills to get a job, but because the government has failed to contain the pandemic and mitigate the devastating economic fallout.

Stop focusing on a pretend crisis

In severe downturns like the current crisis or the Great Recession it’s clear that it’s not a lack of skills keeping people out of work. So what why does this myth persist?

For one, what is often attributed to a skills gap could be more accurately described as a lack of worker power, which has become more acute in the last few months.

When the supply of workers suddenly increases—in this case as a result of a pandemic—employers can afford to be choosier about who they hire, what wages they pay, and the skills required to do the job. Indeed, there is evidence that shows that employers actually adjust the skills requirements in their job postings depending on the strength of the labor market. It’s not that the available workers don’t actually have the skills needed for the jobs companies have to offer, it’s that companies are trying to get more experience at a cheaper price without having to pay a premium for it.

The effects are particularly devastating for workers of color. Black unemployment remains higher than white unemployment at its peak in this crisis, , which suggests that the real problem for these workers is that the “last hired, first fired” axiom remains painfully relevant.

Just as concerning, the skills gap narrative puts the onus on the individual to improve their skills, while absolving public institutions of their role in creating good jobs, raising wages, establishing meaningful labor standards — or in this case, keeping families and the economy afloat amid an unprecedented crisis. It also ignores how deeply baked racism and sexism are in our labor market and how that impacts the distribution of jobs and wages.

As sociologist and author Dr. Tressie McMillan Cottom writes in her book “Lower Ed,” the skills gap discourse and the individualized policy solutions that follow are perhaps better defined as “the story of people living longer and wages stagnating, of spending more time in the workforce as childcare and healthcare costs continue to rise, and the social safety net frays.”

This crisis has exposed the extent to which an ideology that relies on markets, corporations, and individuals to solve public problems has failed. Our labor market is suffering from a pandemic, persistent discrimination based on race and gender, and a lack of worker power worsened by mass unemployment that has advantaged employers and wealthy corporations.

While it is not unreasonable for workers to go back to school during a recession when wages are low, jobs are scarce, it strains credulity to suggest that those same workers are suddenly not qualified for the jobs they had four months ago. We need to do the hard work of marshaling public resources to tackle those problems, not simply wish them away by focusing on a pretend one.

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