There are numerous reports recently that manufacturers are
having trouble finding enough skilled workers to fill domestic
job openings. That seems counterintuitive because the shrinking
of American manufacturing should leave, one would think, a
surplus of skilled labor eager to fill those jobs and even take
lower pay. Researchers at the Chicago Fed have looked into this
and suggest some reasons why shortages of skilled labor are to
be expected in declining industries. Shortages are not due to
some deficiency in the educational system but to rational
choices of people to go into growth industries instead. Since
people with the most skills probably have more choices about
where they work, declining industries should expect shortages of
high-skill workers—even as they have gluts of low-skill workers.
In Why are manufacturers struggling to hire high-skilled
workers? Lombardi and Testa compared education levels and wages
between manufacturing and non-manufacturing from 1990 to 2007.
They found that wage premiums i