It is an understatement to say that there is a mismatch of skills between the unemployed and the needs of the companies looking for workers.
There are 2.1 million unemployed workers in occupations with unemployment rates below the natural rate (4.5% to 5.0%). Many of these occupations require a college degree. These occupations account for 31% of total U.S. workers.
There are 4.3 million unemployed workers in occupations with unemployment rates between the natural rate (4.5% to 5.0%) and below the U.S. average. These occupations account for 38% of total U.S. workers.
There are 6.0 million unemployed workers in occupations with unemployment rates above the U.S. average. These occupations account for 31% of total U.S. workers.
The bottom line is there are 10 million workers competing for replacement jobs in their occupations. As well, they are part of the pool who are competing for the handful of jobs in industries where they are not qualified.
It is clear why the unemployment rate has taken so long to return to the “natural rate” and it is easy to prepare the chart that illustrates the challenge.
What is the remedy?
©Copyright 2011 by CBER.