‘Skills gap’ issue comes to the fore in job action
President Donald Trump is taking one the most concrete steps of his presidency on Thursday to address the employment prospects of workers left behind by the current economic expansion. In doing so, he also joins a longrunning and occasionally contentious debate over whether those workers have the skills they need to land desirable jobs.
Trump’s action comes in the form of an executive order expanding federally funded apprenticeship programs. The order would create a category of programs that industry groups and other third parties could develop and then submit for Labor Department approval, rather than working within existing department guidelines.
“Apprenticeships place students into great jobs without the crippling debt of traditional four-year college degrees,” Trump said. “Instead apprentices earn while they learn.”
Trump would redirect over $100 million of federal job training money to pay for the new apprenticeships, supplementing $90 million in funding for the existing program.
Corporate groups hailed the idea of expanding apprenticeship programs and making them more flexible, arguing that apprenticeships are a reliable path to good-paying jobs in sectors like retail and hospitality for those who could no longer support themselves in production sectors like manufacturing.
“We applaud the Department of Labor and the administration for being willing to look at how to craft this in a way that brings apprenticeships to a new range of audiences,” said Rob Gifford, executive vice president of the National Restaurant Association Educational Foundation, which oversees the industry group’s apprenticeship programs.
Gifford gave credit to the Obama administration for making industries like his eligible for apprenticeship funding. The restaurant industry group won a contract worth up to about $9.75 million under the Obama-era program to create apprenticeships that would run from six months to two years and help candidates for management positions acquire skills in such areas as accounting and sanitation practices.
But Gifford said that streamlining regulations could make apprenticeship programs even more effective.
In the eyes of the president and many corporate leaders, the crux of the problem is skills — the proposition that employers are eager to fill millions of good-paying jobs that workers lack the skills to perform.
“The U.S. faces a serious skills gap,” Labor Secretary R. Alexander Acosta said during a call with reporters last week, pointing to 6 million vacant jobs, which he said was the most since the 1980s. The vacancies were especially abundant in manufacturing, information technology and health care, he said.
Proponents of the skills gap hypothesis typically contend that the loss of many jobs in manufacturing, for example, is offset by the creation of jobs at comparable pay that the same workers could perform with somewhat more training.
But extensive economic research on the subject suggests essentially the opposite trend: The proportion of middle-skill jobs in the economy has declined since the 1980s, while relative job growth has been concentrated at either the low end of the spectrum, like retail, or the high end, like software development, a related phenomenon economists refer to as jobmarket “polarization.” The former class of jobs tends to be undesirable for many former factory workers. The latter tends to be out of reach even with additional training.
“When the jobs these guys filled go away, it’s not clear there is something new and substitutable any time soon,” said Jason Faberman, an economist at the Federal Reserve Bank of Chicago who has studied the skills gap issue.