Closing the skills gap is a more effective way to increase people’s income than raising the minimum wage
Just recently, The US Department of Labor announced that the US economy added more jobs than expected in February and that the unemployment rate went down. But employers are still having a hard time finding qualified workers. The workforce lacks the qualifications needed to fill vacancies available in the workforce.
The job sector is facing two issues: (1) employers cannot find qualified individuals to fill positions in their companies (2) individuals do not qualify for high paying high skilled jobs. The solution to both of these is to not force companies to pay unskilled workers much more than they are worth. Instead efforts should be used to close skills gap and make sure job seekers have opportunities to acquire technical skills that are more valuable in the workplace.
A recent NBER working paper has established a connection between education attainment and increase in economic security. Researchers found that increasing educational attainments for adults without a college degree increases their average earnings. College education makes individuals more employable by instilling in them skills that high paying jobs require.
But college education is not the only way to acquire technical skills. Apprenticeships, entry level jobs, part time jobs are all some of the ways individuals do acquire soft skills as well as occupation specific skills. Mandates like minimum wage kills those opportunities that unskilled workers gain experience to land high skilled jobs.
The economy is always providing opportunities to people, but people need to be prepared to take those opportunities on. The economy is moreover always shifting and transitioning, requiring flexibility in employable skills each time. We cannot always rely on government mandates that make employers pay people much more than they produce. The most important thing is to make it easier for individuals to attain licenses, certificates, technical skills to meet requirements for jobs that will raise their income.