Skills gap is wide for job hunters

2012-09-02T00:20:00Z 2012-10-13T20:00:28Z Skills gap is wide for job huntersBY DAVID NICKLAUS • dnicklaus@post-dispatch.com > 314-340-8213 stltoday.com

After eight years as a plasterer, Jason Portell saw the handwriting on the drywall in 2010.

He had found just three or four months' work in the previous year, and he knew the housing market wouldn't bounce back anytime soon. It was time to retool for a new career.

Two years later, Portell has an associate's degree from St. Charles Community College and a job as a group leader at General Motors in Wentzville. At age 33, he's sold on the value of further education.

“I'm not going to stop until I get my master's,” Portell says.

What Portell came to realize about his own skills – that the changing economy no longer needed them – is true for thousands of other workers across the St. Louis area.

The St. Louis area has shed 23,000 construction jobs and 20,000 manufacturing jobs in the past five years, and most of them aren't coming back. At the same time, the majority of new jobs being created – in fields like health care, finance or information technology – require a level of education that the typical laid-off worker doesn't have.

This skills gap explains why employers complain that they can't find qualified people to hire, even as the government lists 118,722 St. Louisans as unemployed.

According to a new study by the Brookings Institution, 51 percent of unemployed people in metro St. Louis have a high school diploma or less. Seventy-four percent of job openings, though, require some college, and 42 percent require a bachelor's degree.

St. Louis' education gap is about average among U.S. metropolitan areas, but the study makes clear that we'd do better if we were more like Madison, Wis., which had the smallest gap.

“Metro areas with higher education gaps have experienced lower rates of job creation and job openings over the past few years,” Brookings says.

The skills gap also has become part of a national policy debate. People who think unemployment is mostly a cyclical problem, stemming from too little demand, favor aggressive stimulus spending by the government. Those that focus on structural problems, such as the skills gap, may favor education and training programs, but aren't big fans of fiscal stimulus.

There's solid evidence on both sides. A recent paper published by the New York Federal Reserve Bank says the skills mismatch explains “at most one-third” of the recent rise in unemployment.

David Andolfatto, an economist at the St. Louis Federal Reserve Bank, says unemployment might not be the right measure. Many people give up looking for work, and thus are not counted as unemployed, when they realize their skills are out of date.

“It could be that a good part of the drop in employment might be due to structural issues,” Andolfatto says.

While the national debate over jobs policy won't be settled anytime soon, at the individual level the answer to the skills gap is clear: More education.

Portell, who completed his associate's degree this spring, knows that going back to college helped him land a job. He had won a scholarship sponsored by GM, and when he visited the plant to say thanks, he met the person who would later hire him.

Even if he hadn't had that bit of good fortune, Portell is convinced that his new credentials would have helped him in the job market.

“Most companies look for that degree,” he says. “Most companies want the paper that says this guy can learn and he can learn quickly.”

Read more from David Nicklaus, who is the business columnist for the Post-Dispatch. On Twitter, follow him @dnickbiz and the Business section @postdispatchbiz.

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