Education, Skills and the Servant Economy

In last weekend’s New York Times Magazine, Adam Davidson had a nice article debunking the so-called skills gap in manufacturing. He noted that manufacturers constantly complain about not being able to hire skilled workers – yet they offer starting pay as low as $10 per hour.

One manufacturer Davidson spoke with stated that workers with an associate degree can make $15 per hour in his factory. Yet, as Davidson noted “a new shift manager at a nearby McDonald’s can earn around $14 an hour.” The problem is not lack of skilled workers, but that manufacturers are offering wages too low to attract skilled workers.

Some employers are willing to train but even they are facing a deficit in basic math and science skills, which are increasingly important for modern, computer-based manufacturing. Davidson closes by suggesting that “so-called skills gap is really a gap in education, and that affects all of us.”

While it may be true there is a general education deficit in the US, this barely scratches this surface of a deeper problem facing postindustrial economies: what kinds of jobs are replacing formerly-well paying manufacturing jobs as these are outsourced to low-wage countries and lost to advancing technologies?

Many still hold fast to the expectation that the postindustrial economy will increasingly consist of highly-skilled professionals, as Daniel Bell predicted in 1976 in his The Coming of Post-Industrial Society.

Likewise, onetime Marxist turned global consultant Richard Florida has hailed The Rise of the Creative Class. His estimate that so-called creatives – scientists, engineers, IT workers – make up about 40% of the US workforce is consistent with my own analysis of Census data.

But what about the remaining 60%?

My analysis of Census data shows that workers in what I call “low-autonomy” jobs make up fully 35% of the workforce. The bulk of these low-autonomy, low-skill jobs are clerks and cashiers, cooks, nursing aides, janitors, and assemblers and machine operators.

The remaining 25% of the workforce are in “semiautonomous” jobs, primarily sales workers, secretaries, primary and secondary school teachers, and skilled production workers.

To a large extent, then, good manufacturing jobs are being replaced with bad jobs at places like Wal-Mart and McDonalds.

In 1955 the top 10 largest employers were GM, Exxon Mobil, US Steel, GE, Chrysler, Amoco, CBS, AT&T, Goodyear and Firestone. Nine of ten were manufacturers. In 2011 the top ten were Wal-Mart, UPS, McDonalds, IBM, Yum! Brands (Taco Bell, KFC, Pizza Hut), Target, Kroger, HP, Home Depot and PepsiCo. That is, one manufacturer, three general merchandisers and three restaurant companies.

A critical problem with this employment structure is that these consumer service companies generally have a small number of very short promotion ladders. Additionally, under intensive competitive pressure and the dominance of the shareholder value model of corporate governance there is extreme downward pressure on wages, particularly in the context of high unemployment.

In sum, fully one-third of the US economy consists of low-skill, low-autonomy, dead-end jobs. This is a problem that increases in education and skill levels simply cannot fix.

9 comments
  1. charlie said:

    Don’t you think that a lot of this simply stems from unemployment, though? As long as there are millions of unemployed workers everywhere, there’s absolutely no incentive for companies to make their jobs more pleasant or better paid. If we can get the economy back to full employment and keep it there, then we might see some real increases in pay and working conditions, like what happened in the late 90s.

  2. matt vidal said:

    Well, yes, unemployment is a huge part the problem. But it is something that is getting worse, not better. And there is no obvious way that we could get back to full employment. That’s the real problem. With productivity growth, the economy needs less people to produce more stuff. The market economy is not creating enough jobs and is increasingly unable to do so.

  3. Matt, thanks for the interesting post. I wondered about the conceptualization and measurement of “semiautonomous” jobs. I’ve been thinking about schedule control (control over when and where one works) and how it meshes or doesn’t mesh with job control (control over what one does and how). The occupations you give as examples seem to vary on schedule control, making me curious about how you categorized occupations.

    I really appreciated the points about the shift in large employers and what that means for American jobs and career structures. It reminded me of the ASA talk that Jerry Davis gave at the 2012 ASA meeting, which blew my mind in several ways. He’s got it here: http://webuser.bus.umich.edu/gfdavis/articles.htm
    Do you see your argument as consistent with his as laid out there?

  4. matt vidal said:

    Hi Erin,

    I used a typology developed by Herzenberg SA, Alic JA and Wial H (1998) New Rules for a New Economy: Employment and Opportunity in Postindustrial America. Ithaca, NY: ILR Press.

    I slightly refined their definitions and coding. In this typology autonomy refers to discretion in decision making and problem solving within in specific task/authority environment. So in this definition it is not about scheduling autonomy or even discretion in how to vary the way the work is completed if the ultimate task is the same (e.g. the route taken by truck drivers to make a delivery), but autonomy required to figure out the best means to achieve a goal where the means themselves are unclear.

    In my analysis, I distinguish four generic labor process types, and then I look at how there is variation across the types in terms of wages, security and opportunities for training and promotion. One could easily add scheduling flexibility to one of the job attributes that varies across the generic labor process types. That’s how I’m thinking of it, in any case. The paper is forthcoming in the special issue of Human Relations on job quality. I’ll email it you.

    For now, I’ll quote my definitions from the paper. I then coded the roughly 850 detailed occupations into one of these four types. All the coding is in the paper. I’m happy to send it to anyone else if there is interest.

    “High-skill autonomous work (e.g. executives and professionals) typically requires university education and often postgraduate education; the task/authority environment allows significant discretion in decision making. Semiautonomous work (e.g. supervisors and secretaries) may be semi- or high-skilled, requiring either extensive job-specific, vocational and/or university training; the task/authority environment requires moderate levels of discretion, but still may be fairly standardized. Tightly-constrained work (e.g. machine operators and clerks) is low- or semi-skilled, requiring either job-specific or limited vocational training; the task environment is highly standardized and work is paced by machine technology, customer pressure, or flow of work. Unrationalized labor-intensive work (e.g. cooks and janitors) is low skill in terms of required vocational training or education; work is not susceptible to machine pacing or quality monitoring.”

    Vidal, Matt. forthcoming. “Low-Autonomy Work and Bad Jobs in Postfordist Capitalism,” Human Relations.

    best,
    matt

  5. matt vidal said:

    Oh, and thanks for the tip on the Jerry Davis article. I have not read it but will do with interest. Cheers.

  6. Gregory Schwartz said:

    According to Murrell, low-wage jobs have accounted for the vast majority of jobs gained since 2008. Wages nationwide are now so low that millions of workers are below the poverty line and qualify for public assistance. Will there be nationwide campaigns for worker justice now that low-wage service workers comprise such a significant sector of workforce growth? This just published by ZComms: http://www.zcommunications.org/low-wage-workers-wildcat-winter-spreads-to-chicago-by-jake-olzen

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