A bigger worry is that jobseekers no longer have the skills demanded by employers. Half of the 8m jobs lost went in construction and manufacturing, and those departing these industries may struggle to adapt to jobs in more vibrant areas such as education and health services. The cost of this skills mismatch is compounded by America’s housing bust. Many owe more on mortgages than their homes are worth. Households often opt to stay put rather than default, leaving them trapped in places with high unemployment and unable to move to where jobs are plentiful. The rise of the two-income household has also made workers less mobile than they were: it is harder to move in search of jobs if there are two careers to consider.

These factors, in my opinion, are the biggest in holding back economic growth in the United States. Of course, companies holding on to their cash reserves and not investing in expansion or hiring is another. But the three mentioned above seem to explain much of the tepidness in the economy. All the more reason to invest in vocational and/or higher education and not cut back as is being done currently in Texas.

[Link to Skills Mismatch and Labor Immobility]