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What Will It Really Take to Close the Skills Gap?

David Callahan

The Aspen Institute hosted an event today on the familiar challenge of closing the skills gap. The people at Aspen, including Melody Barnes, have some good ideas on how to do this -- and also some serious funding from JP Morgan Chase, which has a major initiative on closing the skills gap. In turn, this effort is part of a bigger push by foundations, nonprofits, community colleges, and businesses to address the persistent mismatch between the jobs that exist and the ability of workers to do them.

What's missing from this effort is a major national strategy to manage America's human capital that is truly up to the task at hand. If you want to see what such a strategy looks like, and how much it costs, a good place to look is Denmark. As part of that nation's "flexicurity" strategy, the government invests heavily in what it calls an "active labor market policy" that retargets and retrains workers as economic needs change. When one industry is dying, while another is growing, the government steps in with serious resources to ensure the new industry has the human capital it needs, pulling from the dying industry if possible. 

Denmark's labor market policy is one reason why it's remained globally competitive, exploiting various niche markets. With the global economy changing so rapidly, the ability to retarget human capital, and fast, is crucial to staying competitive. Naturally, though, the United States has been terrible at this -- given the strong faith here in the wisdom of markets. We don't have a real national labor policy just like we've never had an industrial policy. Instead, we rely on market and civil society actors to figure things out for themselves -- which they tend to do poorly. Which is why despite huge investments in education we have so many high school and college graduates who lack the skills that employers are looking for. For instance, we're now a few decades into the information age, yet our education institutions still can't pump out enough skilled workers for this industry. Likewise, even though robotic manufacturing has been common for a while, companies still can't find enough workers needed to operate these machines. 

The federal government spends billions subsidizing higher ed, but has never really asked for anything in return -- like that colleges work to meet national human capital goals. (Not that such goals exist.)

The problem is not only the lack of a strategy, it's also a lack of public resources or ingenuity. Job training and retraining programs have often been awful, and the good ones are underfunded. 

It's great that so many new efforts are cropping up to close the skills gap. But, as usual, the American reflex toward markets, civil society, and localism is preventing large scale solutions.