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Unemployment, Inc.: Six reasons why America can't create jobs

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Even in the current weak economy, employers say a good number of jobs are going unfilled because companies aren't finding skilled workers.

To give just one example, Mark Hanawalt in Waverly, Iowa, says he's looking for people with technical skills, such as engineering and running computer-controlled tools, for the manufacturing firm he co-owns, United Equipment Accessories. He describes people with those abilities as "highly competitive" and not easy to draw to small-town Iowa. The skills (and in this case geography) gap could become an even bigger problem if the economy shows gradual improvement and more firms want to hire.

The issue goes beyond software engineers and manufacturing to a range of fields, including nutritionists and welders. In some cases, it is a matter of people lacking the know-how. In others, it is simply that they don't know the jobs exist. "There's a clear lack of information getting down to students" as well as the middle-aged jobless about what skills are in most demand, says Dr. Lund.

A skills "mismatch" between job seekers and employment opportunities isn't new. What's different now may be the scale of the problem. Job losses in this recession were deeper. And unlike what happened during business cycles half a century ago, many of the jobs won't be coming back as the US shifts from an industrial economy to one driven by knowledge, new services, and innovation.

While some economists see the skills mismatch as a minor issue, a recent analysis by economists at Wells Fargo & Company argued that it's significant enough to push up the economy's "natural" rate of unemployment – the base level of joblessness that's likely to persist even in a good economy. By their estimate, this natural rate has risen from 5 percent to 7.1 percent, with the skills issue a central cause.

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