Hiring by Age: More Evidence of a Skills Gap?
I know its a tough labor market for young people and recent college grads, but they still represented a larger portion of new hires in NH in 2011 than would be expected based on the percentage of employment by age in the state. The chart below shows the age distribution of employment in NH in 2011 along with the percentage of new hires in the state by age group. Although job growth has been slow this recovery, the chart still shows that among those who have been hired for a new job (that is the hiring that is not a “call back” of a previously laid-off worker), younger workers make up a disproportionate number of the new hires.
This could be more evidence of, as well as a subset of, the “skills gap” debate. Many employers complain that the skills that young workers and recent grads posses don’t match their needs, and this is true for many occupations, but what this data also seems to suggest is that the mismatch between the demands of employers and those seeking work among the existing workforce is even greater than that for younger workers and new entrants to the labor force. It suggests a bigger problem than just getting kids into the right majors and training programs (although that is a big part of it). It points to a larger problem of a fundamental change in the types of occupations in demand (or the skills required of the same occupations) as well as a “twist” in the labor market that results in differences in the occupational make-up of industries. It is a much more difficult , slower, and likely painful process to have the existing workforce adapt to these changes in order to increase their employment prospects than it is to begin with the next generation of workers, although both will challenge future employment and economic growth for some time.
Of course it is possible that employers just prefer younger and perhaps less expensive workers and that is what accounts for their outsized share of recent new hires. Or it could be a function of the type of industries that were hiring in 2011 (I will be examining this hypothesis). It may be more comforting to view labor market trends from those perspectives but it won’t get us any closer to taking the personal and policy actions necessary to create greater alignment between the skills of our workforce and the skills needed for a more prosperous economy.