To echo a point from Ryan Avent, one shouldn’t allow the economy’s lack of aggregate demand to completely blind us to the fact that “structural” issues are always present in a modern economy and we can always strive to do better in this regard. So I heartily recommend the new paper from Arjun Jayadev and Mike Konczal showing that a big shortfall in demand (PDF) rather than a sudden uptick in skill mismatch is the main story of the recession. But I do also recommend Kay Steiger’s post on the shifting demand for skills among journalists which, precisely because it isn’t intended as a macroeconomic analysis, highlights the reality of skill mismatch perfectly:
Daily newspapers, print magazines, and television news are all suffering currently from an accelerated version of a trend toward long-term decline that had been happening for decades. At the same time, “new media” continues to grow despite the most severe recession in 70-80 years and in my view would be poised for even more explosive growth were the larger global economy healthy. But the skills required for these sub-fields aren’t the same. So when Think Progress’ managing editor leaves to take a new position at The Huffington Post it’s not easy to just replace her with someone who got laid off from The Rocky Mountain News. What’s more, schools haven’t necessarily done a great job of transitioning what they prepare students for (though this is changing) and most campus publications remain a little bit quaintly mired in a dying paradigm.
That said, to flip back to the macro picture if you look at the new media field you see the hallmark of a labor market dynamic that’s driven by skill-mismatch—rising wages. The bulk of the professional bloggers I know are working someplace different from where they worked two years ago and are now earning more money than they earned two years. That’s what happens when you’re lucky enough to be in a labor market segment where the demand for your skills is growing faster than the supply. When this happens on an economy-wide basis, though, what you get is inflation and at some point the monetary authorities need to ease off or things get out of control. What we in fact have, however, is inflation that’s been running below trend and that is expected to continue to run below trend for the foreseeable future. That’s an economy in which skill-mismatch is the exception rather than the rule, and in which growth would benefit from more monetary fuel.