Labor Market Disagrees With Washington Post Column on Skills Gap

January 24, 2019

CEPR

Greg Case and Julie Sweet had a column touting the apprenticeship programs arranged through their companies, Aon and Accenture North America. They argue that these sorts of apprenticeship programs are needed to combat the “skills gap.”

The key factoid in this argument is the increasing number of jobs requiring college degrees and the loss of jobs that need just a high school degree:

“Georgetown University’s Center on Education and the Workforce reports that our country lost — and has not replaced — an astonishing 5.5 million jobs requiring a high school degree or less in the Great Recession. At the same time, the number of jobs requiring at least a bachelor’s degree has grown by more than 8.4 million.”

The problem with this story is that, as the labor market has tightened, wages for workers with just a high school degree have risen far more rapidly than wages for workers with a college degree. According to data from the Bureau of Labor Statistics, inflation-adjusted weekly wages for the median worker with just a high school degree have risen by 5.3 over the last four years. By contrast, median weekly earnings for workers with a college degree have actually fallen by 0.2 percent over this period. This story is not consistent with a shortage of college-educated workers and a surplus of less-educated workers.

Of course, this does not mean that more and better apprenticeship programs are not desirable, it’s just that the skills gap story is not a good rationale.