Why Can’t We Find Jobs
Investigating the skills gap and how it is related to students at U-M
—By Yanzi Chen
It is not easy for college students to find a job now. “During peak recruiting seasons, I probably spent about 5-10 hours per week for about 2 to 3 months, said Katherine who is a Ross student and a current intern at the DUO Security company. “In the beginning, I filled up about 150 applications online. I’ve talked to computer science majors who applied to like 300 job applications and get 2 responses.” The recruiting process is time-consuming and tiring. While our parents still blame us for not doing networking and job searchings actively, they don’t know that part of the reason is the skills gap. It is one of the biggest reasons why millennials can’t find suitable jobs and are not confident enough in the job market. The skills gap also explains why can’t companies find ideal candidates in the hiring process.
What is a “skills gap”?
The skills gap is the mismatch between what employers are looking for and what job seekers possess as skills. This difference often causes difficulties for both the employer and the employee: companies can’t find suitable candidates because applicants are not skilled enough to match companies’ requirements, and individuals can’t find suitable jobs because they are all rejected by companies. The gap also applies to university students who are looking for a job or an internship.
Many people argue that the skills gap is a lie. They think the skills gap is a reflection of unemployment. When unemployment increase, there are more people looking for jobs, thus companies become more picky and demanding. This argument can’t stand by itself. The U.S. Chamber of Commerce’s Worker Availability Ratio claims there are so many open positions in the U.S that if every single person in a state wants a job, all of them would be able to have one and there will still be positions unfilled. There is excess supply in the job market, and theoretically speaking, job seekers are on the side that decides which company to work for. However, in reality, a large number of people are reporting having difficulty finding a job. And that is caused by insufficient skills.
How is U-M related to the skills gap?
I created a survey for U-M students and received 23 responses. The result is shocking. 88.9% of juniors and seniors feel that they are not well prepared for their future jobs and 100% of them feel that they are not qualified for the positions they are applying for. As you can see, students are not very confident in the job market and feel that they do not have enough skills to meet companies’ demands. This anxiety comes from the skills gap.
The most surprising figure from this survey is that 43.5% of respondents don’t think what they learned in school is helpful in their jobs or internships. Is the difference between what we learn in school and what we use in work the cause of the skills gap? To have a better understanding of why they feel that way, I randomly chose five students who responded to my survey and had a closer talk with them.
Three out of five of those students feel that their U-M degree only helps in applications, while what they learn in school is mostly uncorrelated to their job positions.
A student majoring in Computer Science claimed that most positions use Javascript, HTML, or CSS as the programming language. But in school, most courses are taught in C++ or Python. He explained that the majority of students applied for jobs in front end programming when they first graduated, doing works such as web development. A person needs to be proficient in Java and HTML for this kind of job. But C++ and Python are useful for people who want to have more decent positions, such as coding for robots. These are fast and powerful languages, but they not applicable to jobs that the general student body takes after graduation. As a result, “For most CS students, courses up to EECS 280 and EECS 281 are critical and fundamental for CS job interviews, but most of the higher-level courses, such as EECS 376, are basically useless for the job itself.” He said that most CS students have to learn different languages and algorithms outside school by themselves to be able to adapt to the real coding environment in companies. According to his account, while school courses are important for people who want to take higher degrees and high-level job positions after their undergraduate study, they aren’t preparing students well for common jobs.
Apart from the course structure, another problem among college students is that some of them are not learning from classes. A student who had a Ross minor honestly said that she applied to Ross only for its title and its resources, not for the courses themselves. She described that she spends more time in school clubs than in classes. “To be honest, I find membership titles on my resume more useful than course names listed on my transcript. Everybody works hard at Umich. It’s your experiences that make you stand out from the rest.” I believe she is not the only person who thinks that way. Some students spend much more time on other activities such as club events and networking than studying, which will ultimately lead to people with degrees but insufficient hard skills.
Another U-M senior who is searching for a marketing job said, “Anyone with a Michigan degree can get a job if they want it just because the school is so impressive and there are a lot of connections…. But the difference now is that we all want dream jobs.” According to her, the skills gap is not caused by companies’ high requirements. It is caused by students who have high standards for themselves. More and more students are seeking suitable jobs in top companies with good working environments and good salaries. While students are becoming more ambitious in their applications, companies will report that a large number of applicants do not have the skills they want, and thus both applicants and companies feel like the gap is increasing.
These numbers and opinions cannot perfectly represent what the whole U-M student population thinks, since the sample size is small and this survey may be biased toward people who are having a hard time finding a job. But it still reflects students’ feelings with a certain degree of credibility. With over thirty thousand undergraduate students, I am sure somebody in this giant student body feels the same way as those five I interviewed: classes are not designed for students to become competent in their future jobs, not everyone is learning, and people are becoming more selective when searching for jobs. All three of them result in a skills gap.
What do researchers say?
In March 2019, Ryan Craig published a report named “America’s Skills Gap: Why It’s Real, And Why It Matters” on the PPI (Progressive Policy Institute) platform. He stated some social causes of the skills gap.
First, companies are having higher hiring standards, and only perfectly qualified candidates will be selected. This is because the cost for bad hires increased significantly in the past decade. Today, it is expected that the cost for bad hires exceeds six months of that employee’s salary. As a result, companies are increasingly reluctant to take unqualified applicants.
Another cause is the prevailing digital economy. The U.S has a well-developed digitalized economy, making up about 7% to 22% of the overall U.S GDP. In this heavily tech-dependent country, not many students are interested in STEM majors. In fact, the U.S has fewer STEM graduates compared to many international countries such as Spain, UK, Germany, South Korea, etc. In Craig’s report, he stated that “the World Economic Forum found only 27% of small companies and 29% of large companies believe they have the digital talent they require. Three-quarters of Business Roundtable CEOs say they can’t find workers to fill jobs in STEM-related fields.” This shortage in high-level tech-specialist is largely caused by students’ interest and the fact that legacy infrastructures such as postsecondary education institutions and workforce development boards are not been keeping up with the speed of the technology development. Therefore, the digital skills gap increases.
What are some consequences?
While people are paying attention to other issues such as inequalities and violence, the skills gap is often neglected and it is hurting millennials unconsciously.
Unemployed individuals easily give up on job searching because the skills they possess don’t match what companies want. At the same time, people who have a job are getting less motivated because it is hard to get promoted with their limiting abilities. Because a large number of people cannot be matched with the high demand from companies, they are losing confidence in themselves. This sometimes results in a phenomenon called “failed to launch”: young people can’t find a job and are having trouble taking adult responsibilities and being self-sufficient.
First, millennials are not doing great financially. The skills gap causes reduced income, which acts with other factors and results in higher poverty. Data showed by CNBC suggest that “millennials earn 20% less than baby boomers did at the same stage of life.” This is because individuals’ incomes haven’t changed much, while housing costs, living costs, and student loans have all increased in the past decade. The mismatch between the two growth rates is one of the reasons why researchers predict that there will be more people living in debt. The skills gap makes this issue even more problematic. Plus the fact that unemployed ones stopped searching for jobs and employed ones are not promoting for higher incomes, there is much more pressure for people to sustain their livings.
A second issue is an increase in the underemployment rate. To be underemployed means people are working in positions that do not reflect their actual training and abilities. The skills gap plays a role in this phenomenon. When it is too difficult for people to be accepted in their dream jobs, they tend to stay inside their comfort zone and take the easy option, which are jobs below their skill levels. The Rockefeller Foundation found that 49% of recent graduates don’t need to go to college for their current jobs, and 51% of graduates in the year 2015 consider themselves as underemployed. At the same time, the average cost of tuition and other fees at universities keeps increasing, along with student debt. While people are paying more money for college educations that are not used in future jobs, is education still worth the cost for students? A student from my survey explained that he paid to establish a mindset, but he showed a great amount of stress in his response to my question “Do you think you will be well placed in your future jobs?” Even though students are spending a large amount of money on their educations, they still feel anxious that they will be underemployed.
All of the above consequences lead to slower economic growth since productivity drops as the public is becoming less confident and less active in the job market. The labor participation rate is expected to drop from 2014 to 2024, but the U.S population is expected to increase at a slow but constant rate. This indicates that there will be fewer people working to support a society with a higher population, which is counterproductive.
What’s are some potential solutions to decrease the gap?
To answer this question, I had a talk with Dr. Alan Deadorff who is a U-M professor in both the Department of Economics and Gerald R. Ford School of Public Policy. According to him, as society continues to progress, low-skilled labor will eventually be replaced by machines, and there will always be new and challenging jobs open to the public. Workers will always try to improve their skills to fill those new openings. However, it requires time, effort, and money in the process of acquiring either technical and soft skills. Since people are always a step behind in the beginning and then try to catch up with training, the skills gap is unlikely to disappear. Therefore, solutions can only reduce the gap by a limited extend.
One possible solution is to have a looser immigration measurement. This is especially practical in solving the digital skills gap as explained above. As many companies can’t find enough tech specialists in the U.S., they tend to hire people from abroad. Similar logic also applies to other industries. The skills gap will be reduced if there are enough skilled people staying in this country. Of course, every country has laws for who can enter and who can stay. But if there are fewer restrictions and people’s cost of migrating is not very high, then the workforce will increase and the gap will be minimized.
A second possible solution proposed by me is to decrease hiring frictions. High hiring requirements helped the company to find well-qualified candidates, but they also miss highly qualified people who do not have past internship experience. Strict hiring standards always enlarge the skills gap since they filter away many potential candidates and companies cannot receive enough abled applications at the end. To solve this problem, the government should take action to encourage companies to provide firm-specific training, which increases his or her productivity within the current employer, before signing contracts. One way the government can do this is to provide funds for training programs.
What will happen in the future?
Dr. Deadorff said, “I don’t think the job market is all that bad today compared to what it has been sometimes in the past.” He is optimistic about the future. The pandemic is getting controlled, and the unemployment rate is dropping back down.
Apart from the negative impact of pandemics, governments are also likely to take action. Under the Trump administration, on August 3, 2020, U.S. Citizenship and Immigration Services (USCIS) published that fees for a wide range of immigration-related services will increase dramatically. There are also more restrictions to who can be considered as eligible candidates. Due to those changes, the number of foreign immigration decreased, which increases the skills gap as described in the previous section. Under the Biden administration today, we are still not sure about his decision. There are regulations implemented for low-skilled workers with children, and people are expecting changes in policy for high-skilled laborers.
“The recruiting process is so tiring that I don’t want to do it next year. I hope I can stay away from work but I am also afraid that people will look down on me because I am unemployed,” said a student majoring in both Psychology and International Studies. College students today are victims of the skills gap. We are poorly positioned for employment and the majority of us are performing poorly in this virtual economy. I hope nobody will blame her for being unable to find a “dream” job, since we are all in the same boat.
Credit Photo by Kelly Sikkema on Unsplash