what happens to people who do not have skills to compete in the job market? are they employable or unemployable?

The people who do not have the skills to compete in the job market become unemployable.

Explanation:

To find employment one needs to possess certain skills that are prerequisite for those jobs which means that the people who do not possess those skills will become unemployable for the said jobs.

In our world of specializations a person must be employable for some amount of jobs otherwise they simply won't be able to find work any where as employable has become a very specific concept.

It is so in the current job market with different niches requiring different sort of specializations.