What Do Help Wanted Ads Say About the “Skills Gap”?
It has been quite a while since I wrote about some of my favorite topics, the “skills gap” and occupational supply and demand. But since there are recent media reports about the issue and more and new or renewed groups in NH looking to influence the debates and discussions on the issue, let me once again add my $.02.
I’ve made the plea for empirical rather than anecdotal or ideological evidence on the issue and produced a little evidence myself that both points to a skills gap as a contributor to slower than desired employment growth as well as evidence that suggests the issue may not be as prominent an explanation for slower job growth as some believe. I’ve also noted the larger economic policy debate that engulfs the skills gap issue. The data I’ve presented in this blog only hints at answers to the fundamental question of whether slower job growth is more of a problem of labor supply (the number and/or quality available workers with the education, skills and training desitred by employers), or one more of labor demand (not enough employers looking to hire qualified, educated and skilled workers in NH). I think the charts below again provide some clues to labor supply and demand trends in NH and also illustrate some bigger trends in the NH economy.
The first chart most directly addresses the skills gap issue. It shows that in terms of broad occupational groupings, professional and technical job openings are the largest component of on-line help wanted advertisements in NH. Because these tend to be among the most-skilled and highest-paying jobs we assume that if there were a sufficient supply of labor then job growth in the industries that most employee these occupations would be relatively strong. In fact, one industry grouping – business and professional services – employs a lot of professional and technical occupations and it is growing almost twice as fast as is overall private sector employment in NH.
The crux of the skills gap issue is this: “would a larger or better qualified supply of individuals in these occupations result in faster job growth in NH, or are there other or complimentary factors that also need to contribute to faster growth?” How you define the problem of slower job growth also largely defines the range of your solutions. Increasingly, and I think somewhat disappointingly, it also seems to define your ideology (if you have one).
The chart below is less sanguine. It shows that compared to the same month in 2012, March 2013 help wanted ads in NH for professional and technical ads declined by more than 10 percent. One month isn’t a trend but recent months have shown more weakness than strength in this indicator. The chart also shows that the largest improvements in labor demand are not among the most skilled occupations, although changes in the occupational make-up of manufacturing industries makes it increasingly likely that production workers will have higher levels of education, training and skills.