The Non-Existent Skills Mismatch: Blame the Victim

There’s some evidence to show that the unemployment rate has nothing to do with a skills mismatch and everything to do with companies doing a crappy job of hiring people for job openings, especially the long term unemployed.

While the sample size was too small, this survey of companies shows that there are two main reasons why companies cannot fill job openings: 1) because the interview process takes so long that workers take other offers while they are waiting, and 2) by the time the interview process is done, workers decide that the salaries/wages the company is offering isn’t worth the trouble, or simply not high enough.

But the data may support the survey. First is, as I point out here, U6, which accounts for all people looking for a job (whether they already have one or not) represents 16.2 Million people (12.1% of labor force), or a ratio of 4:1 for people versus job openings. Logic by itself says that it’s hard to imagine a skills mismatch.

There is also is the median duration of unemployment in relationship to job openings. The last time there were this many job openings, in early pre-recession 2007, the median duration of unemployment was about 7.5 weeks. Today, it’s 13.1 weeks.

Duration of UE

A skills mismatch cannot entirely account for the increased duration of unemployment, which is shown in this table from the Bureau of Labor Statistics:

BLSWhile ignoring the fact that the long term unemployed make up the lion’s share of the jobless, note the huge difference between the MEDIAN duration of unemployment and the AVERAGE duration. This means that there are huge (and plentiful) outliers.

Let’s face it: reviewing resumes is largely done by computer algorithm for large companies, and a brief glance by humans for skills by small ones. Interviews are done after the “skills” have been reviewed on the resume; and there are usually 2-3 interviews, even for Walmart jobs. Each round of interviews takes anywhere from a week to two weeks, which adds to the time it takes for a person to get a job.

From an economic perspective, the hiring process is inherently inefficient. It is after all, “subjective.” However, blaming a “skills mismatch” on the inefficiency of the hiring process is playing the blame-the-victim game. And it’s time that HR Managers and firms take responsibility for their fair share of unemployment, instead of blaming the jobless.

 

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