Skills Gap in Minnesota? Look to the Data!

Earlier this week the skills gap issue was explained and we presented how one expert presents the issue. Analysts in Minnesota’s Labor Market Information Office are also looking into the question: is there really a skills gap in Minnesota?

Basic economic theory tells us that if the supply of workers (job seekers) and demand for workers by employers don’t match up, there are consequences. At a minimum, we should see a large number of vacancies being reported, we should see those workers already in these jobs being asked to work more to fill the gap, and we should see some evidence of increasing wages being offered to those with the skills in need. While the number of job openings in Minnesota has increased in recent years, the demand is still below pre-recessionary levels. Numbers of hours worked in industries with reported shortages have not expanded, and wages for many high-demand occupations have remained steady. A case in point is the durable goods manufacturing sector where average hours worked per week and earnings per hour have remained steady since the end of the recession.

The data also show us that there is a large pool of educated job seekers. In fact, growth in the number of unemployed individuals by education level is evident in Minnesota, particularly for higher levels of education. Many people are also working at jobs that do not require the education level they possess. In Minnesota, for example, over half of those waiting tables and nearly two-thirds of bartenders have some post-secondary education, and 22 percent of retail salespersons have a Bachelor’s degree.

While there is no doubt that some employers have difficulty finding qualified workers despite the large applicant pool, we need to understand why. To help frame the issues from an employer’s perspective, DEED analysts are following-up with businesses who reported job openings during second quarter 2012 on the Minnesota Job Vacancy Survey to inquire about their hiring, recruitment, and skills needs.

In particular, we are focusing on the following occupations, which have showing strong demand for workers recently:

• Registered nurses (including nurse anesthetists, nurse midwives and nurse practitioners)
• Industrial engineers and technicians
• Materials engineers
• CNC operators and programmers
• Machinists

For employers who had difficulty finding workers, we are asking them why they think that was the case. Early evidence from employers attribute some of this hiring difficulty to factors other than skill, including that the job is at an undesirable location, candidates lack experience, the wage offer is not competitive, the job offers undesirable work hours, and candidates lack a strong work ethic.

Look to Minnesota’s Labor Market Information Office for more data on the skills gap!