Is There Really a Skills Gap?

In the past decade, two features have characterized the American job market: wage inequality and persistent unemployment. There is little doubt about the basic facts: Wage stratification has become more pronounced, and far too many people remain unemployed. However, there is debate about the causes. Two interpretations have been very influential: that inequality is driven by demand for skills that are out of reach of many workers and, in a similar vein, that persistent unemployment is caused by a mismatch between what firms seek and what potential employees can provide.