"The last unemployment report said that for the first time in my lifetime, and I’m not young…we are coming out of a recession but job openings are going up twice as fast as new hires. And yet we can all cite cases that we know about where somebody opened a job and 400 people showed up. How could this be? Because people don’t have the job skills for the jobs that are open." President Bill Clinton, September 2010
Former president Clinton took the lead in selling the notion of "structural unemployment" - a gap between employer job requirements and inadequate skills on the part of workers. Clinton's sales skills are considerable. The thoroughly unsupported notion stuck in the minds of the corporate media and some business leaders.
Blame the workers, those who lost jobs since the start of the recession. Clinton and the other representatives for the financial elite asked that we believe in just two short years of the recession, job skill requirements changed so much, workers couldn't be hired back. That was nonsense then and is nonsense now.
Just yesterday, Mike Konczal of the Roosevelt Institute delivered what should be the final blow to the structural unemployment myth.
"In March of 2011, the Bureau of Labor Statistics revised its numbers for job openings from 2006 through 2010, dramatically reducing the number of job openings for the last months of 2008 and the entirety of 2009 and 2010.
"On average, there were 172,000 fewer job openings per month in 2009 and 235,000 fewer job opening per month in 2010 than had previously been reported.
"Nothing has happened since in terms of job openings that would lead me to believe that the recovery is taking off or employers are having trouble finding workers. The job-opening rate is virtually unchanged over the past year, while the unemployment rate has come down due to a combination of weak jobs growth and people leaving the labor force." (Author's emphasis)
The basis for Clinton's argument and the notion of structural unemployment officially debunked.
Shortly after Clinton's statement, but before the BLS corrections, the Economic Policy Institute (EPI) offered a devastating rebuttal of the skills gap myth.
"Did the economy transform itself from the end of 2007 to the beginning of 2010? What would lead us to believe that, and what footprints would such a transformation leave? One would imagine that such a transformation would be associated with sizable productivity gains and significant investments."
"One of the curious aspects of this developing structural unemployment storyline is how hard it is to find any research trying to tie this story to actual detailed trends in employment, unemployment, or output data."
Mishe et al. showed the 2001 recovery compared to the alleged 2009 recovery. There are far fewer jobs since 2009 than there were in the 2001 "jobless recovery."
Other Critiques after Clinton's Statement
Mark Whitehouse put it succinctly in his Wall Street Journal blog, Employers Aren’t Trying Hard to Hire,
Jonathan Miller and Jeannette Wicks-Lim also provided a strong critique in Dollars and Sense pointing to the adoption of the "skills gap" theme by the media. They asked an important question, as well: "Purveyors of the mismatch theory would have a hard time explaining how it is that underemployed workers who want full time work do not possess the skills to do the jobs full-time that they are already doing, say, 20 hours a week."
Paul Krugman pulled no punches:
'Saying that there are no easy answers sounds wise, but it’s actually foolish: our unemployment crisis could be cured very quickly if we had the intellectual clarity and political will to act.
"In other words, structural unemployment is a fake problem, which mainly serves as an excuse for not pursuing real solutions." Paul Krugman, September 28, 2010
How long will we suffer clueless leaders?
Indefinitely, it seems. However, if knowledge is the highest goal, we can take major satisfaction in Mike Konczal's excellent analysis and other intellectually honest efforts to understand the realities that we face and point to solutions.
A Demand Side Possibility
There is ample proof that the American worker is no longer a viable scapegoat for the failed recovery. There is also empirical proof that workers see the ongoing crisis in the economy as either a recession or depression, according to a recent Gallup Poll. In the spirit of popular democracy, it's time to listen to the people.
We need well paying jobs that add value to both the nation as a whole and workers and their families.
The Fortune 500 companies have at least $2 trillion worth of cash on hand. Coincidentally, the price tag for much needed repairs in the infrastructure of the nation comes to just over $2 trillion according to the American Society of Civil Engineers 2009 "report card." Our democratically elected officials could confiscate the corporate cash and apply it to the needs of the nation. That would stimulate the economy, improve the nation, provide good jobs, and create considerable demand.
We could call the confiscation a Treasury Swap by simply giving the corporations one of those Special Treasury Notes that citizens get for the Social Security payroll tax surpluses currently used to fund the deficit. Then we'd all be in the same boat.
N.B. Even if we had structural unemployment, to any degree, the proponents of the argument fail to factor in training. Companies do it all the time. Locate applicants with skill levels that match open jobs and induct them into the company routine. Some tech firms get new hires from a general poll lacking industry expertise, train them, and do quite well. But user anonymous drive-by below has an irrefutable example, Rosie the Riveter:
"How did Rosie the Riveter ever manage to build B-17's? No structural unemployment if the job really has to get done no matter what.
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