A First Look at Gaps, Shortages, and Mismatches

Oregon Talent Assessment

First, look at wage growth

Source: American Community Survey PUMS data

Skill problems

Skill Gap: Widespread shortfalls in basic skills usually associated with a failure of the education system

Skill Shortage: Shortfall of skills required by specific occupations

Skill Mismatch: Supply and demand for skills is out of sync in either direction–oversupply or undersupply

Categories of skill problems

Skill gap

Source: US Census; American Community Survey PUMS data

Master's+

Bachelor's

AA / some college

No HS diploma

HS diploma = 1

Skill shortage

Source: US Bureau of Labor Statistics

Skill mismatch

Share of college-educated 23-29 year old workers in occupations requiring college degrees

Source: American Community Survey 2009-2011; ONET

United States share: 58%

Labor underutilization

Labor underutilization

Source: American Community Survey PUMS data; Ross & Holmes (2017), The Brookings Institution.

In-demand skills and occupations

There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.

Donald Rumsfeld

Known known Humans rewarded for being human

Act

ual

Pre

dic

ted

Source: Deming, D.J. (2017). The Growing Importance of Social Skills in the Labor Market. Quarterly Journal of Economics, vol. 132 issue 4.

High Social, High

Math

High Social, Low

Math

Low Social, High

Math

Low Social, Low Math

Known known Skill overlap between seemingly dissimilar occupations

Source: O*NET, Bureau of Labor Statistics

More emphasis on clerical and service work

More emphasis on physical work

More emphasis on operating machines and

processes

More emphasis on communication and

critical thinking

Known known Skill overlap between seemingly dissimilar occupations

Source: O*NET, Bureau of Labor Statistics

More emphasis on clerical and service work

More emphasis on physical work

More emphasis on operating machines and

processes

More emphasis on communication and

critical thinking

Known unknown 2008-18 job growth, predicted

Pre

dic

ted

Source: Oregon Employment Department and Oregon Office of Economic Analysis

Known unknown 2008-18 job growth, predicted and actual

Pre

dic

ted

Source: Oregon Employment Department and Oregon Office of Economic Analysis

Unknown unknowns

Act

ual

Pre

dic

ted

Takeaways

1. Slow wage growth requires that we re-examine claims of widespread skill problems.

2. Oregon’s college wage premium remains sizable by historic standards.

3. Oregon has a sizable share of college-educated graduates working in occupations that traditionally haven’t required a college degree. That lowers returns on college investments and crowds out non-college-educated jobseekers.

Takeaways

4. As the state considers an adult attainment goal, the populations who have still not found work this late in an economic expansion should receive special attention.

5. Predicting future skills needs is challenging. The best guess: the market will reward humans who do things computers can’t do.

Takeaways