by Wade Rathke
December 4, 2020
Little Rock This is interesting. Rather than raise wages, some companies – and labor economists – believe that the other way to increase income would be to expand the field of hiring to more workers. I’m cynical probably, and I don’t want to rain on this parade, because a piece of it is spot on. Nonetheless, I’m not surprised that some companies that want to protect and advance a certain wage rate for jobs with certain skills that are becoming hard to fill would prefer to expand their hiring to advance lower waged workers into the positions, rather than raising existing wages to increase the pool of workers seeking and keeping these jobs.
I say all of this based on reading about a new report that argues that, “As many as 30 million American workers without four-year college degrees have the skills to realistically move into new jobs that pay on average 70 percent more than their current ones.” Part of the underbelly of this problem though is that even if the hiring pool were expanded, it also requires more mobility than we are currently seeing in the US labor force. Additionally, this would also entail additional training being given to these workers with pre-existing skill and aptitude levels who might lack traditional educational degrees. Who is going to provide such training and pay for it? Companies willing to expand their hiring pool are not necessarily saying that they are willing to shoulder the load, and real worker training programs funded by the government have not been as consistent or successful at predicting labor market needs and adapting training to meet them as we need.
It’s not a surprise that researchers “found a significant overlap between the skills required in jobs that pay low wages and many occupations with higher pay.” At one level, I say “Amen!” At the other, I can’t help but note that part of this lies in the fact that employers are underpaying workers in many jobs, especially in the service sector, and are depending on workers acting with great skill on low wages.
The report is right to argue for companies to look deeper at applicant qualifications and not be so hidebound to a four-year college degree, even as they are trying to paddle upstream. The article notes that,
For 74 percent of new jobs in America, employers frequently require four-year college degrees, according to a recent study. Screening by college degree excludes roughly two-thirds of American workers. But the impact is most pronounced on minorities, eliminating 76 percent of Blacks and 83 percent of Latinos.
One of the researchers called this “self-harm for the economy” and noted that the practice was in fact discriminatory. Still this won’t change based on some big companies saying they’ll take another look at workers without degrees without a more concerted program and incentives coming from governments rather than the likes of tongue wagging by Walmart, Microsoft, and the usual lists of suspects, including McKinsey. I mean, really?!? If you want changes, let’s make this real.
Wade Rathke is founder and chief organizer of ACORN and ACORN International. You can find Wade’s recent past posts here Chief Organizer Reports. And you can link to his website here Chief Organizer ACORN/ACORN International.