South-Western - Management  
Labor Pains: Closing the 'Skills Gap'
Topic Human Resources Management
Key Words Training, education
News Story 

Nearly 35,000 workers in Pennsylvania were unemployed in October. Yet, according to the Pennsylvania Department of Community and Economic Development, 24% of businesses in the state say that they are having trouble finding qualified workers to fill open positions. The problem is caused by a "skills gap" which is inflating wages in some sectors of the economy and putting downward pressures on other areas that don't require special skills or education.

Among the 50 states, Pennsylvania ranks 46th in the percentage of its labor force who have education beyond the high school level. The federal government has made attempts at providing training to meet job needs but critics say the training was not in touch with what employers really need, or was targeted only to a certain population, like Native-American, or inner city dwellers. However, state governments have put pressure on community colleges to partner with the businesses in their area, coordinating labor needs with education offered.

One initiative is being led by the Pennsylvania Workforce Investment Board. The board has created nine "clusters" of industry-related companies that help ensure that training is targeted to industry needs in a region. Other initiatives involve programs like that offered by the Pittsburgh Digital Warehouse, established to foster growth in the state's high technology sector. This program sponsors a masters degree in advanced electronics through three different universities. The universities and area companies share research. The program has resulted in 63 masters degrees to date and has attracted three high-technology companies to the area.

Many workers who have been laid off from jobs are finding that continuing their education is the key to staying afloat in a volatile economy.

Questions
1.

Explain what the author of this article means by a "skills gap."

2.

How is the "skills gap" contributing to unemployment problems in states like Pennsylvania? List three things that can be done to combat this problem.

Source "Labor Pains: Closing the 'Skills Gap'," The Wall Street Journal, Nov. 22, 2004, pA2.
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