Here’s Obama’s $600M Solution to America’s Skill Gap

Source: Thinkstock

Source: Thinkstock

There has been more than a little disagreement over the so-called “skill gap” and its relationship to unemployment in America today. Some, such as Jamie Dimon, CEO of JPMorgan Chase & Co., believe that the lack of “middle-skill workers” is leading to unfilled positions in today’s job market. Dimon considers it to be a serious enough issue to warrant a new program targeting the issue.

Others, like Paul Krugman, Nobel prize Winner in Economics, consider it to be a false theory. Krugman called it a “zombie idea — an idea that should have been killed by evidence, but refuses to die,” in an op ed with The New York Times. He said that studies did not back up the claim that unemployment is explained by workers’ lack of necessary skills, but that instead, the “current ratio of vacancies to unemployed workers is far below normal,” and that the “crucial point is that unemployment remains much higher among workers at all education levels than it was before the financial crisis.” Krugman said the skill gap theory could be used to blame the victim, “blaming workers for their own plight,” rather than the struggling economy, and that “the skills myth shifts attention away from the spectacle of soaring profits and bonuses” in corporations.

Controversy aside, the Obama administration is addressing concerns over skills and job needs, with President Barack Obama requesting that Vice President Joe Biden “lead an initiative to help individuals get trained with skills businesses need now and then [place them] in good, middle class jobs” — according to the recent White House press release on the matter.

The skill gap seems to be an accepted theory for its part, saying “too many businesses can’t find skilled workers for jobs they want to fill, while too many people looking for a job may be ready to learn new skills but may not be certain that there’s a job waiting for them on the other end.” Krugman, for his part, argued that if employers were truly looking for skilled workers, they would offer wages that attracted the needed skills and would likely have an easier time filling positions.

The program as it stands will be a combined effort between community colleges and local employers, for those industries that will work to create programs to train future employees with the skills for those jobs they need filled. Apprenticeships are also a major focus, especially in technical and building industries, manufacturers or in healthcare related training programs.

Funding for the Obama administration will be given in the form of $500 million towards job training and $100 million for apprenticeship. The administration’s press release closes out, as is becoming the norm, with an appeal to congress to pass supporting legislation for apprenticeship funding, noting that while efforts will be made in conjunction with Congress when possible, Obama would be “using his pen and his phone — calling on businesses, philanthropy, non-profits, states, and local communities to act.”

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