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How Significant is the U.S. Skills Gap?

November 07, 2012

The answer may not be clear, but both sides can agree the U.S. skills gap will continue to deepen if changes do not occur. In the U.S. manufacturing sector, the skills gap may be less pervasive than many believe, according to a report from the Boston Consulting Group (BCG). BCG researchers estimate the U.S. is short 80,000 to 100,000 highly skilled manufacturing workers. That shortage represents less than 1 percent of the nation's 11.5 million manufacturing workers and less than 8 percent of its 1.4 million highly skilled manufacturing workers. The researchers also found only seven states — six of which are in the bottom quartile of U.S. state manufacturing output — show significant or severe skills gaps. They conclude shortages are local, not nationwide, in nature and reflect imbalances driven by both location and job classes.

In contrast, a recent report from EvoLLLution contends the current skills gap is a systemic problem across all industries in the U.S. Researchers found that despite the existence of 9.3 million unemployed Americans, the country experienced a shortage of seven million skilled workers in 2010. Approximately 70 percent of companies interviewed believe that employees need continuous education just to keep pace with the demands of their current jobs. In many cases, employers could not promote individuals from entry-level positions due to a lack of education achievement.

Although they differ on the severity of the current skills gap, both reports conclude that the gap has the potential to widen drastically by 2020 due to a decreasing availability of skilled workers and low levels of educational attainment. According to the EvoLLLution estimates, the U.S. shortage of skilled workers across all industries will climb to approximately 21 million by 2020. The authors cite a lack of educational attainment across the country is at the root of the issue. The BCG report also warns the gap will become more severe as aging workers in key trades retire and as ramped-up manufacturing from reshoring and increased exports heighten labor demand. Based on U.S. Bureau of Labor statistics and their own estimates, BCG estimates the shortage of highly skilled manufacturing workers could worsen to approximately 875,000 machinists, welders, industrial-machinery mechanics and industry engineers by 2020.

Both reports urge policymakers and industry leaders to establish programs that increase education achievement, develop workers with the right skills and establish recruitment efforts to ensure new talent is entering the right trades. The BCG report highlights several successful initiatives, including Quick Start in Georgia, the Austin Polytechnical Academy in Chicago and the Custom Machine initiative offered by the Center for Manufacturing Technology in Woburn, Massachusetts, as models.

To tackle their individual state's skills gap, governors and policymakers across the country are working to establish new STEM-focused workforce development programs. To address the Alabama skills gap, Gov. Robert Bentley plans to appoint a task force to help provide seamless workforce development training from middle school through college, according to a recnent article from the Associated Press. The task force will include representatives of K-12 schools, two- and four-year colleges and the state's job training program — Alabama Industrial Development Training. In September, Missouri Gov. Jay Nixon announced that the state's community colleges will invest $15 million in a statewide training network called MOManufacturingWINs to create opportunities for Missourians to obtain the specialized training they need to begin a career in modern manufacturing.

Alabama, Missouriworkforce, manufacturing, policy recommendations