The U.S.’s skills gap is widening. Here’s how policy can help.

The McCourt School of Public Policy’s Center on Education and the Workforce (CEW)’s latest report, Falling Behind: How Skills Shortages Threaten Future Jobs, highlights how the United States’ economy needs 5.25 million additional workers with training beyond high school through 2032, and 4.5 million of these workers will need at least a bachelor’s degree. Without urgent increases in education, 171 of the 561 occupations analyzed in the study will face skills shortages, with nine occupations expected to face critical shortfalls in sectors such as education, engineering and healthcare.

Expert Insights from Georgetown’s Leading Researchers

What do these numbers really mean for the U.S. economy, and what can be done about it? We asked the report’s authors, Jeff Strohl, director of CEW; Nicole Smith, CEW’s chief economist; and Madeleine Adelson (MPP’25), CEW policy analyst, to weigh in.

Jeffrey Strohl

Research Professor and Director of Research at the Georgetown University Center on Education and the Workforce (CEW)

Nicole Smith

Research Professor of the Practice and Senior Economist at the Georgetown University Center on Education and the Workforce (CEW)

Madeleine Adelson

Policy Analyst, Center on Education and the Workforce

Nicole:
If we don’t address these shortages, we risk declining productivity, output and efficiencies across the board. That hurts not just individuals but society as a whole. People need to be adequately employed, contributing taxes and using their skills and credentials wisely. Otherwise, we’ll see declining opportunities across the economy.

Jeff:
The overall prosperity and growth rate of the U.S. economy is at stake, especially as we face declining population cohorts. Education leads to higher productivity, which affects a wide range of economic indicators. On the human side, if we don’t act, we’re missing an opportunity to uplift people who have historically lacked economic and social mobility.

Nicole:
Better alignment between education and workforce needs is key. Expanding funding for registered apprenticeships and short-term or stackable credentials would help. These bite-sized credentials allow people to progress one step at a time instead of only through a four-year degree. I’ll share a concrete example: I recently met a student at a community college who had more than 90 credits but still no associate degree, due to poor counseling and inefficient credit transfer. Simple fixes like better advising and stronger agreements between community colleges and universities could make a big difference.

Madeline:
One area with significant potential is skills-based hiring. There’s a lot of conversation around it, though results so far haven’t matched expectations. Since interest is already there, this could be a place to push further.

Jeff:
In the short run, articulation policies are important—helping students move from short-term credentials to bachelor’s degrees and supporting college completion. Hundreds of thousands of talented students never finish college, often due to financial or structural obstacles. We should also recognize that most shortages are at the bachelor’s degree level.

Nicole:
Community colleges do a good job connecting students to local labor market needs, but many four-year institutions don’t. If all colleges prioritized preparing students for good jobs through clear course pathways, internships and industry partnerships, we’d see stronger outcomes.

Madeline:
A notable area that stands out is AI. We touched on it only briefly in the report, but it’s becoming essential for graduates to be AI-literate. Institutions need to figure out how to integrate those skills into education.

Jeff:
Universities should invest in career navigation systems that use technology to help students make efficient progress toward degrees and connect to jobs. AI literacy is particularly important—not just knowing how to use the tools, but also when not to.

Nicole:
AI is already widespread, so the question isn’t whether to adopt it but how to prepare people to use it effectively. We should view it as a potential ally rather than an adversary. Some lower-level jobs will disappear, but new opportunities are also emerging.  We also shouldn’t lose sight of the fact that no one really knows the long-term impact yet. A lot of the negative narratives are speculative.

Madeline:
Policy solutions around the rapidly advancing technology should focus on two groups: new graduates facing fewer entry-level opportunities due to AI, and older workers who need retraining to use new tools. Both groups will need targeted support.

Jeff:
The U.S. doesn’t currently have strong AI policies, and the European Union, for example, is moving ahead when it comes to policy implementation. Past efforts, like dislocated worker assistance, might be a model if structural changes cause mass unemployment. For now, universities may be the best place to help students prepare, but it’s evolving quickly.

Nicole:
Historically, H-1B and similar visas allowed the U.S. to attract the best global talent, fueling innovation and leadership in tech and healthcare. But recent restrictions are shortsighted. Companies still need this talent, and if we don’t allow it here, they’ll offshore jobs instead. Other countries, like Canada, are already moving to attract these workers. U.S. universities train much of the world’s top STEM talent; students pay top dollar to study here, yet visa restrictions force them to return home, often strengthening U.S. competitors.

Madeline:
Historically bipartisan support for high-skilled immigration seems to be eroding, which is concerning. These jobs require years of training, and it’s unrealistic to assume they can quickly be filled by native-born workers.

Jeff:
It’s important to note that H-1Bs alone aren’t enough. They account for only a fraction of the skill gap. But reforms could help, like making foreign training more transferable to the U.S. system and investing in long-term pipelines, similar to the Eisenhower-era investments in STEM after Sputnik. If we undermine talent development now, it could take decades to rebuild.

Nicole:
Programs like Opportunity@Work and Lumina Foundation initiatives are trying to help workers with certificates or some college but no degree. It’s important to note that not everyone aspires to a bachelor’s degree, and that’s fine. Many are satisfied in middle-skill roles. But in order to close shortages in high-skill areas like STEM, master’s and doctorates will take long-term investment.

We also need to address low pay in many crucial professions for our communities—fields like teaching or social work that require higher education but don’t pay well, and are disproportionately staffed by women. Benefits like childcare and paid family leave are also part of making these jobs viable.

Madeline:
When we looked at specific professions, like accounting, we saw unique challenges. Becoming a Certified Public Accountant requires more education than a bachelor’s degree, but finance offers better pay with fewer requirements. That makes it hard to attract people into accounting. Solutions may need to be field-specific, not just a broad policy solution.