Five or six years ago, everyone from the US Chamber of Commerce to the Obama White House was talking about a “skills gap.”
The theory here was that high unemployment reflected a structural shift in the labor market such that jobs were available, but workers simply didn’t have the right education or training for them. Harvard Business Review ran articles about this — including articles rebutting people who said the “skills gap” didn’t exist — and big companies like Siemens ran paid sponsor content in the Atlantic explaining how to fix the skills gap.
But nothing was really done to transform the American education system, and no enormous investment was made in retraining unemployed workers. And yet the unemployment rate kept steadily falling in 2013, 2014, 2015, and 2016 as continued low interest rates from the Federal Reserve let a demand-side recovery continue. Donald Trump became president, injected a bunch of new fiscal stimulus on both the spending and tax sides, and in 2017 and 2018 the unemployment rate kept falling and the labor force participation rate kept rising.