The skills gap is back. Has it ever been real?

The theory that some employers and the Trump Administration can't let go.

The issue

The White House and some employers are back to pushing the idea of the skills gap—but what if there were no such thing?

Explain.

Last week Planet Money shared this seconds after I published my piece on the Trump Administration’s hope that it can move office workers to factory jobs:

American manufacturers say they are struggling to fill the jobs they already have.

According to data from the Bureau of Labor Statistics, there are nearly half a million open manufacturing jobs right now.

Last year, the Manufacturing Institute, a nonprofit aimed at developing America's manufacturing workforce, and Deloitte, a consultancy firm, surveyed more than 200 manufacturing companies. More than 65% of the firms said recruiting and retaining workers was their No. 1 business challenge.

Manufacturing interests tell the story of a “skills gap” throughout the Planet Money piece, and it is a very old narrative. The idea is that America just isn’t producing enough talent qualified to fill good-paying jobs or that the people who are qualified aren’t interested in the jobs. It’s been used to justify many a workforce policy initiative in the past two decades. It’s definitely back on the Trump Administration’s radar as it seeks to move office workers to the factory floor.

The problem? I’m doubtful the skills gap is real or ever has been real, and building jobs policy in the direction of it has wasted time, money, and sweet, sweet sanity.

A quick clarification: I do think there are employers that try very hard and still struggle to find and retain qualified talent. Based on what I have seen and heard, they tend to be small or midsize organizations. There is a competition aspect to this—small employers may not be able to pay the same as bigger employers in the same field—but I do think that public policy and systems could make it easier for these employers to find the talent they need. I tend to prioritize helping workers get ahead, but I do think we need to take care of employers too. You know, since they tend to do the employing and all.

I think those challenges are different than the skills gap theory that has driven plenty of workforce policy in the past couple decades. This idea—which has strong advocates among large employers and their political allies—articulates that it is a Societal Problem that they cannot find The Right Talent to fill their open jobs. They need Help, and if they get it, employment problems would go away. This version—implicitly, but sometimes quite explicitly—blames governments, schools, and workers for employers just not being able to find people to hire. In my experience, that is how the first Trump Administration understood the theory and it is how I think they and their allies are thinking about things now.

Yet, many workforce practitioners I know shed the narrative years ago, in part because of growing skepticism with what I sometimes call “supply-side workforce development.” The idea behind that phenomenon is if workforce providers and schools produce enough talent with the right skills for the right jobs, the skills gap won’t exist and more people will be hired.

I have heard from red and blue state folks, on both sides of the aisle, who are increasingly skeptical of the supply-side workforce strategy because they don’t feel like employers regularly hold up their end of the bargain.¹ And in fairness, some of their frustration stems from Biden-Harris training programs for clean energy jobs that didn’t come open fast enough and may never come open due to the Trump Administration torpedoing investments throughout the country.

How do workers not get hired for jobs they were trained for? Sometimes it’s because of things like “experience” requirements for entry-level jobs. Some workforce practitioners also will tell you about the dramatic difference in needs and processes described by executives as opposed to the ones they encounter in trying to get trainees through human resources. Sometimes the HR departments are years behind on what the employer actually does and screen out workers who have the skills they need. And just to keep things lively, sometimes the executives are so far removed from hiring decisions and actual work processes that they have no idea what the hell they are talking about.

Sometimes it’s just… well, whatever you want to call this: several years ago at the Department of Labor, I was called into a meeting with a large employer panicked about several hundred pending retirements. They needed people to get skilled up to fill those jobs as soon as possible, and they shared their plan for doing it with the people in the room. We told them it was great.

Then, they asked what it would take for us to make it happen for them.

We were confused. There really wasn’t anything for the government to approve or make happen. They also weren’t asking for money near as we could tell. Heck, they probably had more money to spend on their program than we did.

As a lateral thinker, I threw quite a bit at them to try to zoom in and “fix” the problem, but it wasn’t what they wanted to hear. Ultimately, we delicately tried to tell them they should just go do the thing they presented to us. They were frustrated, and so were we.²

I thought about the story when reading this quote in the Planet Money newsletter from Carolyn Lee, the head of the Manufacturing Institute, an offshoot of the National Association of Manufacturers, which played a role in shaping Trump I’s agenda:

The hardest skills to find are the ones that maintain and fix equipment. Every company we speak with is trying to hire technicians. Every single one. The challenge is that there is no one walking around on the street with these skills, and it takes one to two years to teach those skills and another one to two years to contextualize those skills to the specific plant environment.

Emphasis mine. Look, I don’t want to undersell the technical details of any job. Plus, I do enjoy workplaces being safe and workers coming home with the same number of arms that they had when they clocked in.

But is there really nothing manufacturers can do to get workers hired immediately into jobs maintaining these machines? Do they really need two years to be able to learn any skills they can use on the job? And another two years to be able to do a version of those jobs that a plant needs?³

It reminds me of something I wrote about months ago, where an employer purportedly told a potential provider that apprenticeship programs—in which you have the worker in your building, doing the job, then getting better and more effective at doing the job according to your specific work processes—weren’t an immediate enough talent solution.

Accordingly, the skills gap narrative that drives policy can be less “People don’t have skills and we can’t hire them” and in reality more “We don’t hire people based on the skills they have.” Or potentially “We don’t hire our own people” to do better-paying jobs on the team, an idea backed up by millions of workers having skills needed to make 50 percent more pay than they get.⁴

But you can’t have a conversation about open jobs without talking about why those jobs are open.⁵

The Planet Money piece notes a jump in average manufacturing salaries the past few years and talks about how companies could pay their workers more and still make a profit. Last year, I spent a good bit of time with factory workers, including those at plants that recently unionized. Pay was one of the challenges these workers faced, but one of many.

There were problems like erratic scheduling that made it hard to arrange childcare, refusal to allow time off for workplace injuries, and, in some situations, a strong message that the workers were, to paraphrase a little, replaceable cogs who could be hurled from the premises at any moment and replaced with another, more willing cog. I can’t say I completed a full inquiry on the matter, but based on reports, I think it is fair to say that any Cog-Talk Managers were unaware of a skills gap preventing them from hiring replacements.

In other words, the reason these companies may be struggling to find people is job quality. Good jobs⁶—or those that pay and treat people well enough they stick around—ain’t dead yet. I know of red states discretely continuing job quality work because the underlying concepts were better tools to gauge what employers were worth investing in and which were not.

In terms of keeping people around, good jobs definitely can pay off. Last summer, a worker at one newly unionized manufacturer told me that improved job quality increased workers’ commitment to the plant.

“We just want to have a better future at the company,” said Dee Thomas, a United Steelworkers member who helped organize the Blue Bird factory in Fort Valley, Ga.⁷ “Blue Bird is going up and we’re going to help them go up.”

Blue Bird was one company that received Biden-Harris Administration manufacturing investments, $80 million from a Department of Energy competition that took into account labor relations and working conditions that aligned with the Good Jobs Principles that I wrote about a few weeks back.

Last week, the Trump Administration announced it was rescinding another one of those investments, grants awarded near the end of the Biden-Harris Administration for “Tech Hubs” that could expand manufacturing. The Trump Department of Commerce will recompete the grants and noted this change in the new competition:

References prioritizing unions⁸ and the Good Jobs Principles will also be removed.

Oh good.

What do we do about it?

Well, I am not disputing the BLS data. They’re smart cats and they may find me and put me in a maze made of solid labor market information if I do.

Yet, I wouldn’t just accept that the reason these jobs are open is because of some sort of cross-societal failure that left manufacturers with no choice but to not hire people. If I were still a policymaker, I would ask manufacturers what they were doing to try to hire people with the skills they need and whether they have considered options like skills-first hiring. I also would gently inquire as to working conditions and what changes they could make to retain staff. And if I had money, I would build workforce grants that nudge them toward better working conditions like the ones Blue Bird adopted.

Not every workforce professional has that luxury, of course. Manufacturers are awfully powerful in communities heavily reliant upon them, and it may be hard to break with the skills gap narrative there.

But it’s an outdated idea, one that has eaten a lot of time and money over the years despite diminishing evidence and less-than-ideal outcomes for workers and communities.

It may be time to try something else.

Card subject to change.

First, JOBS THAT WORK has been creeping into the rising list of Substack newsletters for Business. Thank you for helping me Business real good.

I’m keeping an ear out for more DOL grant cancellations. If something big happens, I suspect you’ll see me on video from my office. Business.

Separate from that, I may be back again this week, not with THURSDAYS THAT WORK (alternate name JOBS THAT THURSDAY) but a short, subscriber-only piece that addresses a hard question well and stuck in my craw. It nearly ended up in this piece, but my internal editor told me “Focus on the skills gap!” and also “Eat cheesecake!” We have a complicated relationship that may or may not explain why things keep ending up in my craw.

FRIDAY: How the Administration appears to be trying to push through its workforce block grants now without Congress, plus probably more on Tech Hubs.

NEXT TUESDAY: I’m mostly taking next Tuesday off for Memorial Day. You’ll get a “Still workin’” rerun from when my subscriber base was a third of what it is now—again, y’all are awesome—with a decently substantial update I spoiled last Friday.

1. In other words, “supply-side workforce development” is the same thing as “train and pray.”

2. The best theory I have here? They needed some sort of federal involvement to convince a higher-level decisionmaker to move forward. What type of federal involvement? Hell if I know, but it certainly wasn’t anything shared in the room.

3. Happy to talk about it and do an update if I’m wrong! Email nick@jobsthat.work.

4. Skills-first hiring: you should try it! The right way!

5. This is where part of my lawyer brain thinks about employment discrimination, which is definitely a factor here, but I struggled to get a shape on how much of one in researching this piece. Part of that might be because so much of the skills gap narrative appears shaped off employer surveys. Most hiring managers I have encountered don’t tell people they’re unlawfully discriminating against people based on race, sex, or age. In my experience, some do, to the great and eternal pain of their legal counsel.

6. Enough readers of this newsletter have been introduced to Biden good jobs policies—and are enthused by them—that I think it’s safe to say that the Biden-Harris Administration’s jobs policy didn’t really break through. I also don’t think it’s unfair to say that the Biden-Harris Administration was built around returning to norms. To put two and two together in light of the radical unfurling of this Trump Administration, I do wonder that if a future administration could pursue more aggressive, non-normy approach that implements good jobs like it’s the most important thing in the world, with an aim for producing speedy results that can be rolled out to show actual progress.

It’s something to think about and an idea in stark contrast to, say, what I gather Democratic Party leaders are taking from one book that only they seem to be putting so much weight into. No book in particular I’m sure.

7. Just to avoid any confusion, Blue Bird was not the Cog-Talk Employer.

8. As always, the second Trump Administration is very friendly to unions just so long as they are likely to be led by Sean O’Brien and don’t unionize or expect workers’ rights or anything controversial like that.