Saturday, February 19, 2011

Structural unemployment - skills revisited again

Anecdotal stories such as this are important but at the same time can serve to undermine. The report:

Evidence of a skills mismatch became increasingly clear in Fresno after the housing bubble burst, causing joblessness to nearly triple. ... Unemployment hovers at 16.9 percent, but managers at the 7,000-employee Community Medical Centers say they cannot find enough qualified technicians, therapists, or even custodians willing and able to work with medical waste.

The situation is much the same at Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week.

"The job requires at least a high school education, and maybe some technical training, but we don't seem to be getting the right people applying," said Aric J. Olson, Jain's president.

Perhaps the it was the bubble that caused workers to reallocate their skills to flipping properties and hustling the unsuspecting public to apply for NINJA loans instead of accumulating skills? A comparison of whether it was difficult to fill positions before the recession would have been at least the minimum to allow a very tentative conclusion of skill-mismatched.

Yet the title of the article states the problem most succinctly: Why does Fresno have thousands of job openings - and high unemployment? And the answer seems to lie in the above quote - at least a high school graduation and some technical training. Perhaps the trend in HS graduation rate that was evident even before the recession is part of the answer. See Heckman and LaFontaine (2010) for evidence that HS graduation rates have been steadily declining, and this NCES report for evidence of the opposite.

As far as Fresno is concerned, the facts on the ground seem to indicate a lack of HS graduates and as argued previously, the lack of education is not the same as the lack of skills.

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