Cleveland Fed's Tasci Considers Worker Skills/Employer Needs Mismatch
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Although new jobs are being created in this slow economic recovery (whether you believe it or not), the pace remains unbearably slow and, in addition, the number of job openings are still 6 percent below the level seen before the downturn.
Murat Tasci, economist for the Federal Reserve Bank of Cleveland, admits that while economic data points to low demand for labor, there may be another reason for the sluggish nature of the current jobs market: employers willing to hire may not be able to find qualified workers. This is a problem referred to as “mismatch” of worker skills and company needs.
“If the mismatch is significant, one obvious place it might show up is if some sectors were affected by the recession differently than others,” Tarci wrote. “Since the Great Recession was accompanied by problems in the housing and the financial markets, some economists have argued that employment in these sectors might never go back to their prerecession levels. If this is true, we might see these sectors recovering more slowly than others, as workers who lost their jobs in these industries might lack the skills that are required for other sectors.”
Construction is one of the sectors that could be experiencing such a mismatch given that it was hit extremely hard by the downturn in the housing market that preceded the recession. The percentage of jobs lost spanning back to December of 2007 has now reached a jaw-dropping 25 percent, much higher than the 6 percent loss for the overall economy.
The financial sector is another industry that could be experiencing the impact of mismatching.
The government reported last week that the unemployment rate edged up to 9.6 percent in August from 9.5 percent the prior month. Economists suggest that the unemployment rate will remain around the same level well into next year.
Murat Tasci, economist for the Federal Reserve Bank of Cleveland, admits that while economic data points to low demand for labor, there may be another reason for the sluggish nature of the current jobs market: employers willing to hire may not be able to find qualified workers. This is a problem referred to as “mismatch” of worker skills and company needs.
“If the mismatch is significant, one obvious place it might show up is if some sectors were affected by the recession differently than others,” Tarci wrote. “Since the Great Recession was accompanied by problems in the housing and the financial markets, some economists have argued that employment in these sectors might never go back to their prerecession levels. If this is true, we might see these sectors recovering more slowly than others, as workers who lost their jobs in these industries might lack the skills that are required for other sectors.”
Construction is one of the sectors that could be experiencing such a mismatch given that it was hit extremely hard by the downturn in the housing market that preceded the recession. The percentage of jobs lost spanning back to December of 2007 has now reached a jaw-dropping 25 percent, much higher than the 6 percent loss for the overall economy.
The financial sector is another industry that could be experiencing the impact of mismatching.
The government reported last week that the unemployment rate edged up to 9.6 percent in August from 9.5 percent the prior month. Economists suggest that the unemployment rate will remain around the same level well into next year.
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