Saturday, October 15, 2016
The Skills Delusion And Why Labor Demand Is Weak
This article explains why weak labor demand is unrelated to the supply of skills. We simply don't need as many workers to satisfy the demand for products and services. One of the reasons for this mismatch is that many of our most valuable corporations produce software products. Unlike many other industries they can ramp up output without adding a proportional number of workers. They are not labor intensive industries. We really don't have a shortage of workers with the knowledge and background demanded by these industries. Consequently, our focus on educating more people to participate in high tech industries is the wrong approach to the problem of weak labor demand. Education has a vital role to play in developed countries but its focus is misdirected. The liberal arts should play a more important role in education than vocational education. We can never have too many literate and well informed citizens.