The Working Life

The Labor Market for Workers in Low-Skilled Jobs

Introductory chapter | Table of Contents

Over the past few decades, the economic prospects for workers possessing relatively few skills have worsened as the demand for skills in the labor market has increased. Even in jobs that might be categorized as low-skilled, workers require a diverse set of skills to succeed. Many of these skills can only be obtained through schooling or job training. This is why workers lacking skills find it difficult to attain a foothold in the labor market and why employers have difficulty filling low-skilled jobs. While it was previously assumed that the supply of workers able to fill low-skilled jobs exceeded the demand, this book reveals that the labor market for low-skilled workers actually operates quite differently.

Maxwell presents the results of her groundbreaking survey of 405 employers, which queried them about jobs requiring no more than a high school education and no more than one year of work experience. These data allow her to establish the link between skills and low-skilled jobs and to reveal the current state of the labor market facing low-skilled workers. The data also highlights the knowledge and skills that employers require in low-skilled jobs and the abilities that individuals who apply for those jobs bring to the table. Overall, the employers’ responses allow Maxwell to make the following five key points:

1. Low-skilled jobs require skills. Low-skilled jobs are not no-skilled jobs. While individuals do not have to have a high level of credentials to apply for low-skilled jobs, once they are hired, employers emphasize that they must possess the requisite skills to succeed in their jobs. Among them are the so-called new basic skills—English, math, problem-solving, and communication skills. In addition, appropriate workplace behavior and the ability to follow instructions are important, and physical abilities and mechanical skills are also required, often at levels more intense than at other jobs.
2. Shortages of appropriately skilled workers in low-skilled jobs exist, even when labor markets are slack. Close to 60 percent of firms in this study report great difficulty - one-fourth of them had extreme difficulty - finding qualified workers for low-skilled jobs even when unemployment rates exceed 7.0 percent.
3. Skills are rewarded in the labor market for workers in low-skilled jobs. Low-skilled jobs requiring skills with a high relative demand in the local labor market (i.e., skills in short supply) carry increased occupational wages.
4. Low skilled jobs offer promotional opportunities. Firms report that over 90 percent of entry-level low-skilled jobs have promotional opportunities, as long as workers are willing and able to expand their skill sets. Firms also construct pipelines of appropriately skilled workers by hiring entry-level workers with skills needed in the position above entry level.
5. Hiring requirements in low-skilled jobs are relaxed in tight labor markets. Firms match recruiting and screening methods to the skills needed in the low-skilled jobs. As labor markets loosen, these firms use less extensive recruiting methods but adopt more intensive screening methods. This suggests that, during loose labor markets, firms sort through a greater number of applicants in order to uncover workers with the skill sets needed in the job.

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