When talking about unemployment and the unemployment rate it seems like we always talk about it as if the problem is that there simply aren’t enough jobs for the people. But the labor market is just like any other market in that there are two sides to the equation: supply and demand. When talking about solutions to unemployment it is impossibly to have a real conversation unless we talk about both axis of the graph.
As a kid I used to enjoy watching the show Dirty Jobs, so I have been a big fan of Mike Rowe. Rowe has been on a crusade to talk to the American people about a big problem we face, the skills gap. We have done a disservice to many in our generation by making almost all of them can have their dream job if they go off to college and work hard. The sad truth is that not everyone can have their dream job, but you know what? That is okay. At the end of the day somebody has to grow the food, fix the plumbing, do the welding, and operate the machines.
Now we have a problem where employers are struggling to find qualified people to fill certain jobs. According to statistics there are around 5.6 million job openings, but because of the skills gap we can’t seem to fill many of those. 35 percent of employers report difficult finding folks to hire due to lack of available talent.
Addressing the lack of skills isn’t even the only thing we can talk about. Geography and mobility are another key aspect of addressing the unemployment problem. There may be available jobs somewhere, but that does not necessary mean those jobs are in the same locations as the potential workers. Toss in the cost and hassle of relocating for many people and there are clear barriers to reaching an equilibrium in the labor market.
There are many things we can do to address the unemployment problem and getting companies to create new jobs isn’t the only tool in our toolbox.