Skilled Labor Scarcity

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Article Summary

Skill shortage is a genuine lack of adequately skilled individuals available in the accessible labor market with the type of skill being sought and which leads to a difficulty in recruitment. A recent article by Ben Casselman in the Wall Street Journal highlighted the difficulties recruiters and employers (specifically manufacturers) facing are moderate to severe shortage of skilled labors to fill their well-paying positions that requires specialized skills. The shortages (due to weak labor market) are being felt in what have been heavy-duty blue-collar jobs in manufacturing and other industries that somewhat do not require a college degree. The demand for skilled workers has a significant negative impact on the manufacturing firms and the skills gap can thus lead to a ripple effect.

Skills gap is used to describe the qualitative mismatch between the supply or availability of human resources and the requirements of the labor market. Skills gap exists where employers feel that their existing workforce have inadequate skill type or skill level to meet their business objectives; or where new entrants to the labor market are apparently trained and qualified for occupations but still lack a variety of the specific skills required. The shortage also affects the less-skilled workers who lose out on spin-off jobs to support the increased production. Because of skills shortages, employers are lowering their expectations when recruiting people and cutting back on capacity and quality level. The skilled worker gap is developing at large due to the significant decline in the manufacturing sector (aspects of globalization and off-shoring) that appear less stable and attractive now as large number of workers approach retireme...

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...rker employed). And, businesses may decide to increase production by making greater use of capital inputs such as extra units of machinery. A growing economy creates jobs for people entering the labor market for the first time; and it provides employment opportunities for people unemployed and looking for work.”

Article Source: “Help Wanted: In Unexpected Twist, Some Skilled Jobs Go Begging,” by Ben Casselman, The Wall Street Journal, Column A1, November 26, 2011.

http://online.wsj.com/article/SB10001424052970203707504577010080035955166.html

Frederic S. Mishkin. Macroeconomics Policy and Practice. Pearson Education, Inc., Addison-Wesley 2012.

Ronald G. Ehrenberg and Robert S. Smith. Modern Labor Economics Theory and Public Policy. Eleventh Edition. Pearson Education, Inc., Prentice Hall 2012.

http://en.wikipedia.org/wiki/Structural_unemployment

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