The Skills Gap Myth in America's Job Market

The skills gap myth masks deeper issues in the job market, allowing companies to justify low wages and high job requirements.

### The Myth of the Skills Gap: Unpacking America's Job Market Challenges
* 📊 Currently, there are **8.2 million job openings** in America and around **7 million people actively seeking employment**, yet many companies claim they **cannot find suitable candidates**.
* 🔍 The often-cited "**skills gap**" explains this disconnect, suggesting that the skills of job seekers do not align with job requirements, but this narrative is largely **fabricated**.
* 👷 For example, 20-year-old Jesus Vegas is training in advanced construction technology, highlighting that **87% of Americans anticipate needing new skills throughout their careers**.
* 📉 Research indicates that the skills required for jobs increase when unemployment is high, suggesting that companies use the **skills gap as a convenient excuse** to justify their hiring practices and wage offers.
* 💰 The myth of the skills gap allows companies to offer **lower wages** by claiming **high skill requirements**, even when many advertised skills, like **programming for IT help desk roles**, are unnecessary.
* 🏥 Many difficult jobs, such as nursing and teaching, remain unfilled not due to a lack of skills but because they **do not offer competitive pay**, leading skilled workers to seek **easier, better-paying opportunities**.
* 🌍 The skills gap narrative also serves political and corporate interests, pushing for **retraining programs and immigration policies that benefit businesses** while **suppressing wages**.
* 📈 As the corporate training market is projected to **grow to over $800 billion by 2035**, the skills gap myth continues to shape labor market policies, often at the **expense of American workers**.

There are 8.2 million job openings in America right now and around 7 million people actively looking for a job. There are also millions of Americans who have simply given up on even trying to look for a job, but still, companies are complaining that they can't get the people they need. There is one reason that has been used time and time again to explain all of this: a range of companies are looking at how to close the skills gap. Skills gap, just a skill gap, skills gap, skills gap, yep, the skills gap. There are people looking for work and jobs on offer, but the skills of those people and the requirements of the jobs just don't line up. It's a simple, elegant explanation to a major problem, but it's also almost entirely made up. 20-year-old Jesus Vegas is in the second year of his training. He's building a career in advanced construction technology. Today's income gap is largely a skills gap. 87% of Americans said that they are going to need

to get skills and new training throughout their work life. It's really remarkable. The skills gap, also known as a skill shortage or just good old structural unemployment, is a convenient excuse for a lot of major issues in today's job market that are often swept under the rug by businesses, politicians, and even economic statistics. If a hospital is hiring a doctor, but the only person in town looking for a job has a degree in computer science, then obviously that role is not going to be filled regardless of how much time and effort the applicant has put into their education. The argument that you would have seen is that the same problem is playing out everywhere across the world, which is why even if companies claim to be desperate to hire people, you might struggle to find a job. The whole argument conveniently shifts the blame of any labor market problems onto the workers because they are the ones that haven't trained the right skills or developed the right experience. The first problem with this idea, though, is how the problem of the skills

Gap quietly slips away during the good times. Research published by economists from Harvard, Northern University, and the Federal Reserve found a striking relationship between unemployment and the experience that employers look for in their candidates. The team collected data on over 36 million job postings over 3 years, and what they found was that the skills and experience required was almost directly proportional to the unemployment rate. In plain English, what this meant was that when there were lots of people looking for a job, all of a sudden, the skills requirement for roles became a lot higher. And this is when people will start complaining about a skills gap. But when unemployment is lower and there aren't that many people applying for jobs, suddenly the skills gap isn't such a big problem, and companies are happy to hire whoever they can get. Now, as long as they aren't discriminating based on protected classes, companies can basically hire whoever they want and ask for whatever skills they can if unemployment is high, and they can be greedy.

with their job requirements, that's just business. But the problem is the myth of the skills gap is used to justify a lot of bad stuff. The first is simply lower wages. If companies post a position with high skill requirements and they don't get any applicants that meet their unreasonably high bar, they can go back to the best applicant with a lower salary and benefit offer than advertised, pointing out the gaps in their skills as a reason for the lower offer. This is just basic salary negotiation tactics, but the myth of the skills gap makes it easier for companies to get away with this. A report by MIT found that most jobs advertised in America ask for skills like programming that were actually not required to perform the job. They looked specifically at IT help desk technicians that deal with computers. So, most companies ask for programming skills. The thing is though, most IT help desk techs don't actually use programming for anything. But a lot of companies just assume that computers equal code and so make it a job requirement.

report actually found that programming was just as useful in manufacturing plants as it was in IT help desk work. But factory machine operators were far more likely to get on-the-job training on how to program their machines than IT workers who are just assumed to know how to code. But lower wages are far from the worst thing that the myth of the skills gap has been used to push for. It's also been an incredible tool for lobbying on migration policy, education funding, and workplace protections. These are worth looking at one by one because you are probably going to start hearing a lot of familiar sound bites. So, it's time to learn how money works to find out how the myth of the skills gap helps everyone but you. This week's video is sponsored by Surfshark. Surfshark is a powerful VPN that keeps your online activity secure and private, whether you're browsing at home or using public Wi-Fi. Surfshark ensures your personal information stays hidden from prying eyes with

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pay that well. According to a report by the Society of Resource Management, the hardest roles to fill currently include jobs like nursing, teaching, the trades, and social service work. Most jobs in these roles do not pay enough to support a comfortable life in a major city, especially for entry-level employees in the roles. The trades can be great, but apprentice tradesmen are not going to earn much until they are fully qualified, and even then, they need to work significant overtime or own their own business to make a comfortable salary in most parts of the country. Even still, they are going to be better off than teachers and nurses, who not only need a college degree where they won't be paid anything, they also need on-the-job training before they are earning anything at all. That's on top of reports about extreme job stress, brutal work schedules, and the general lack of respect these roles receive. Putting your career on hold, spending tens of thousands of dollars on a college degree, and dealing with difficult patients or often dangerous patients or children is not

that enticing to Americans who would consider a career switch because the income for these roles hasn't risen in line with the demand. There is not a skill shortage; there is just a shortage of people who want to do difficult jobs for bad pay. People in these roles who already have the skills to perform the job at a high level are leaving because it's just not worth making the sacrifices necessary when there are easier jobs that pay just as much or more. A counterexample to this trend was the rush to train computer science professionals. The tech industry in the 2000s was expanding rapidly, and we didn't have enough coders to perform roles that actually needed programming skills. The allure of high-paying, respected jobs with a good work-life balance meant a lot of very smart people moved into that career path to fill the skills gap because there was a real reward for doing so. Now there are actually too many qualified programmers, and as the tech

industry has cooled down. Hundreds of thousands of people have been laid off just 5 years ago, though they would have been told that there isn't enough programmers and companies are hiring whoever they can as fast as they can. So, the assumption that empty jobs are just waiting to be filled and the only thing standing in the way is the skills gap can be a bit dangerous. But the final piece of the puzzle is how profitable fixing this myth can be. Politicians can win some easy political points by talking about retraining programs, and companies can push the responsibility of staff training onto their workers or those government programs. The market research firm Allied Market Research values the corporate training market at over $361 billion, with it projected to grow to over $800 billion by 2035. That's a major industry just by itself, and it relies heavily on people believing that they are just one qualification away from landing a job that is just desperate to find.

the right worker. This industry is separate from traditional colleges and trade schools, but you already know what a mess that whole thing is. The skills gap has been a major lobbying tool by companies to push for this kind of training. Siemens, an industrial equipment manufacturer, paid for an article in the Atlantic talking directly to policymakers that the apprenticeships were the secret to closing the skills gap. Apprenticeships are actually great, but the reason that Siemens was paying to publish this article is that it would give them a new pool of skilled workers to pick from, not because they wanted to help out with labor force policies. And this is where you get to the most controversial part of the skills gap: it's used to justify immigration. Now, this is obviously a heated topic that everybody has their own set of opinions on, but it is possible to advocate for more careful and deliberate immigration policies without going full they took our jobs. The skills gap has been used to push for a lot of skilled migration, which has

arguably gone too far in America but has been even more obvious in places like Canada, the UK, Australia, Germany, and New Zealand. The reason companies like this is because it lets them fill roles without putting upward pressure on salaries, and more people means more customers to sell products to. If the skills gap is front and center around these sensitive issues, it makes it easier for policy to be handwaved through as an essential measure to keep the country functioning. Here in America, H1B and EB3 skilled working visas are the most common way to get in workers who fill skilled roles that can't be filled by an American. They come with a strict set of rules to make sure that American workers are not disadvantaged by new foreign hires, but if job requirements are kept unreasonably high to make an artificial skills gap, it becomes easier to hire workers from overseas who will be dependent on that company sponsorship to stay in America. Who do

you think is more likely to be a loyal employee. Now there are people who disagree with this. A smaller channel called the Market Exit did a great video a few months ago on a politically incorrect view of migration, specifically in Europe. I don't always agree with everything he says, but I think it's essential to hear our conflicting arguments. At the very least, his videos deserve way more attention than what they are getting. So instead of shamelessly plugging myself, I recommend that you go and check out his video. I will shamelessly plug my newsletter, though. This week we are publishing an article on the people who can't afford to retire, but they are doing it anyways. So make sure to sign up to that so you can keep on learning how money works.

The Insidious Myth of the "Skills Gap"

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The Myth of the Skills Gap in the Job Market

2 million job openings in America, but the skills of job seekers often don't match the requirements, leading to a perceived skills gap.

This skills gap theory is used to explain labor market issues, but research shows it conveniently shifts blame onto workers.

The relationship between unemployment and required skills is striking, with higher unemployment leading to increased skill requirements, challenging the notion that the skills gap is a consistent problem.

The myth of the skills gap is used by companies to justify lower wages and unreasonably high job requirements.

A report by MIT found that many job postings, especially for IT help desk technicians, ask for unnecessary programming skills.

The myth has also been used to lobby for migration policy, education funding, and workplace protections, impacting workers negatively.

The hardest roles to fill currently include nursing, teaching, trades, and social service work, with entry-level positions struggling to provide a comfortable living in major cities.

Apprentice tradesmen and professionals in these fields face low pay and demanding work schedules, leading to a shortage of individuals willing to take on these challenging jobs.

In contrast, the tech industry experienced a surge in qualified professionals due to high-paying, respected jobs with a good work-life balance, resulting in an oversupply of programmers.

The tech industry has seen a significant downturn, with many layoffs despite the previous narrative of a desperate need for programmers.

The corporate training market, valued at over $361 billion, is projected to grow to $800 billion by 2035, driven by the belief that one qualification can lead to a job.

The skills gap has been a key lobbying tool for companies, like Siemens, to push for training programs and skilled immigration, raising controversial debates around labor force policies.

Companies in America and other countries are increasingly hiring foreign workers to fill skilled roles, aiming to avoid upward pressure on salaries.

H1B and EB3 visas are commonly used to bring in these workers, but high job requirements can create an artificial skills gap.

The dependency on company sponsorship for work visas may lead to greater employee loyalty, while conflicting views on migration policies are gaining attention.