The global financial and economic crisis has led to alarmingly high unemployment and underemployment in many European Union (EU) countries. Yet, surveys still find that more than one in three employers has problems filling vacancies. Many employers and policy-makers argue that employment difficulties are due to the ill-preparedness of young graduates and other workers. They claim that the endemic skills mismatch in Europe’s economies is responsible for high rates of unemployment. However, there is evidence that factors other than skill deficits are mostly responsible for rising unemployment coexisting with difficult-to-fill job vacancies. Data indicate that current skill mismatch is not due to a lack of skills. Weak employment demand is increasing competition for jobs and people are more willing to accept jobs which do not match their level of qualification.