Although the economy is finally adding net new jobs beyond what is necessary to keep pace with the growth of the working age population, this current economic recovery is unprecedented in terms of its anemic job growth. There are a variety of culprits cited for this sluggish job creation--offshoring (moving jobs overseas), productivity growth, geopolitical insecurity, digestion of investments in information and communication technology, rising oil prices, and falling labor supply. However, few of these explanations are likely to explain much of this sluggish job market on their own. For example, rising health care costs have been cited as a possible reason why employers might be more reluctant to hire new workers. But when we look at trends in total employee compensation, we do not see the kinds of increases that would explain such slow job creation. Since the work force is aging, we might expect that this would reduce the size of the work force as a greater share of workers reach retirement age. However, the labor force participation rate of workers over the age of 55 actually rose about 4 percentage points from 2000 to 2004. So for the moment, the slow pace of job creation does not seem to be related to an aging work force. Another possible explanation for slow job growth is the phenomenon of offshoring. Manufacturing jobs have moved overseas during the past two decades and this trend continues, especially now in the apparel sector with the elimination of the Multifiber Arrangement in January 2005. (1) What has changed, however, is that service jobs, once thought immune to the offshoring threat, are now going abroad as well. This shift has important policy implications for the extension of trade adjustment assistance to service sector workers, as Lori Kletzer and Howard Rosen discussed in their paper for this conference (also see Kletzer, 2005, in this issue). While I think that the impact of offshoring of service sector jobs will become increasingly important over time, I do not think it is sufficient to explain a major part of our current anemic job growth. A more likely explanation for the lackluster job growth is some combination of the good news of sustained productivity growth (although what lies behind this is still fertile ground for research) and the dampening effect of geopolitical concerns, including the price of oil. However, before we conclude that concerns about the structure of the U.S. labor market have been misplaced, I would like to argue that there are quite sensible and rational reasons why people should be concerned about our policy responses in the context of trade and technological change and their impact on workers. Skill levels in the work force So what is the problem? Both trade and technological change put pressure on our economy to raise the skill level of the work force. But the supply of skilled workers is just not keeping pace with the changes in demand due to technology and trade. Managers live with this reality everyday. For example, the 2001 American Academy of Management Association Survey on Workplace Testing reports that one in three job applicants tested by employers lacked the basic skills necessary to perform the jobs they sought in 2000. This skill crisis was in place during the boom of the 1990s, it was here during the recession of 2001, and it is still here today. It threatens to be a significant drag on our ability to remain competitive in the global economy through the production of innovative high-skill-content goods. It also undermines our ability to move workers from contracting sectors of our economy to expanding ones. But fixing this crisis requires us to understand the skill quality both of workers entering the labor market and of those already in the job market. In terms of the skills of new entrants, we see that in spite of a significant increase in the wage premium paid to those with a college degree, there has been a slowdown in the rate of growth in the United States for college enrollment and completion. …