Does the U.S. Face a Skill Shortage?

Employers repeatedly point to a skills gap among U.S. workers as a major issue in filling positions, particularly in technology fields. Workers counter that many companies are unwilling to pay competitive wages for those with in-demand skill sets.

Does the U.S. have a skill shortage? It certainly does if business and technology news sources are to be believed. A recent report by Third Way, a public policy and advocacy nonprofit organization, gives a mixed answer.

Its findings point to skills gaps that are region- and industry-specific. Where gaps exist though, the gap is significant and could widen in the near future. Among its findings:

  • Tech jobs are in high demand and short supply in fields ranging from programmers to data support to IT support. The U.S. Labor Department reported in 2016 that seven of nine states with the best data on high-tech jobs reported major concerns in filling vacancies. Some positions, like computer support specialists, have widespread vacancy rates while gaps in developers and programmers are concentrated in regions such as Washington, D.C., and New York.
  • A considerable shortage of health care workers will worsen as the population ages, A study by the Georgetown Center for Education and the Workforce predicts a nationwide shortage of nursing professionals of 193,000 by 2020, for example.
  • There is a growing concern in schools nationwide that there are not enough qualified K-12 teachers. Considerable shortages appear in STEM disciplines nationwide while filling teaching assistant positions is a challenge regionally.
  • A lack of wage growth and a growing number of retirements will lead to meaningful, growing shortages of skilled manufacturing labor. The strain varies widely by industry and geography but is driven in large part by the increasing number of retiring Baby Boomers.
  • The financial sector, including banking, insurance, and real estate, is experiencing an emerging demand for workers, but a decline in young workers. Younger, skilled workers are drawn to industries other than financial services so, as an aging workforce retires, the demand shortage is likely to worsen.
  • Construction does not have a labor problem, yet. Despite some regional shortages, there is not a major skills gap, but as older construction workers retire there is not a clear pipeline to replace them. The problem could be exacerbated by the changing nature of the construction industry as technology plays a growing role.
  • Retirements will affect other industries rapidly, including retail, wholesale and trucking.

Skilled construction workers are in high demand and will continue to be in the near future.

The Third Way report notes that many of the jobs where gaps are present or expected are middle-skill positions that do not require a college degree but do require specialized training and credentialing. However, the lack of good information about these jobs for students, the stigma attached to some of the professions noted, and the increased expectation that people will gain a four-year degree contribute to the gap issue.

Technology may be causing part of the problem. Companies receive hundreds if not thousands of applicants for some positions, leading them to believe they can be very picky in selecting candidates to interview. This leads to automated selection systems looking for titles and keywords that may not be the best indicator of talent.