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If There's Any Labor Shortage, It's for Medium Skills

Labor skills mismatch: How bad is it?
A dental assistant student practices taking an X-ray in Boston.
A dental assistant student practices taking an X-ray in Boston.Photograph by Lisa Poole/AP Photo

Why are people out of work? Is it because there aren’t enough jobs, or because people aren’t qualified for the openings that exist? Democrats tend to favor the “not-enough-work” theory, while many Republicans lean more to the unqualified-worker hypothesis. Bloomberg Businessweek’s Matthew Phillips waded into the debate last month with a good piece called “The False Theory of the Growing Jobs Mismatch.

Now, economic research published June 6 by the Federal Reserve Bank of Chicago [PDF] concludes that evidence for a skills mismatch is “limited.” Write senior economists Jason Faberman and Bhashkar Mazunder: “If there is a skills mismatch in the U.S. labor market,” it may be most significant for workers with “medium skills.”