- Paul Constant is a writer at Civic Ventures and cohost of the “Pitchfork Economics” podcast.
- In a recent episode, UNC Chapel Hill professor Nichola Lowe breaks down issues with the skills-gap theory.
- Lowe says the idea that anyone can start at a low-paying job and work their way up to corporate isn’t true.
- See more stories on Insider’s business page.
There’s no question that American workers are taking home smaller paychecks than they used to, even though their productivity has skyrocketed. A Brookings study released just before the pandemic found that nearly half of all Americans are employed in low-wage jobs.
The trickle-down explanation for this four-decade wage crisis – the theory offered by mainstream economists and many politicians on both sides of the aisle – is that too many American workers are “unskilled.” If our schools did a better job training the next wage of American workers, the conventional wisdom argued, wages would rise and the so-called “skills gap” would disappear. That’s why since the 1990s, politicians have reflexively answered questions about shrinking wages with elaborate speeches about affordable college and education reform.
In the latest episode of “Pitchfork Economics,” UNC Chapel Hill professor Nichola Lowe explains the fallacy in the skills-gap theory. Lowe argues that the real problem with allegedly unskilled labor is “how skill gets interpreted.”
“For many decades, going back to the 1980s, our nation has decided to value skills and classify people as skilled who hold formal degrees – who are formally educated at universities and colleges,” Lowe explained. “I think this is a major problem, especially when we consider that only around 50% of working adults in this country hold that prized degree.”
How we categorize ‘skilled’ versus ‘unskilled’ work
Does that mean that a full half of America’s workforce lacks professional skills? “In my view, I don’t think so,” Lowe said. “I think that we are misclassifying a lot of workers as unskilled or lesser-skilled.”
If that’s true, “we’re really missing this chance to recognize their expertise, their knowledge, their ingenuity, and the things they’re contributing to work,” Lowe said.
As we saw during the pandemic, we interpret skills very differently depending on our perception of class. Seemingly “professional” white-collar workers continued doing their high-paid jobs from home, while low-paid workers received “hero pay” of a paltry buck or two more an hour as they continued to make, stock, and sell the food and basic supplies that our country needed to survive.
If you were to drop a typical white-collar worker into the role of one of those supposedly low-skill workers we praised as “essential” last year, they’d be at a total loss because they don’t have the essential skills to perform the job. Every job demands skill from workers – the only difference, as far as pay is concerned, is where those skills were learned.
Why workplaces need to promote ongoing skill development
That old American ideal of the employee who starts at a low-paying job in the mail room and works their way up to the corporate boardroom simply doesn’t exist. American employers have abdicated their traditional role as educators of workers, instead relying on ever-more-stringent educational requirements that disqualify applicants before they have an opportunity to prove themselves.
“If we’re holding up educational institutions as the primary creators of skilled workers,” Lowe continued, “we are ignoring the critical importance of work and workplaces as sites for skill development.” From manufacturing to construction to sales, there’s an ever-growing canyon between low-level workers and management that creates huge huge pay disparities.
“There are many companies now that just don’t have those internal structures in place,” Lowe said. “They have not formalized mentoring or on-the-job learning,” because “more and more of them are turning to external institutions and expecting them to not only step in and provide that training, but also to carry a lot of that cost.”
In her upcoming book, “Putting Skill to Work: How to Create Good Jobs in Uncertain Times,” Lowe offers policy proposals to bridge that gap between workers with different skill sets, largely by encouraging employers to invest in employee training again.
That investment will pay off in a loyal workforce that “can actually see there is a road ahead,” Lowe explained, so “they’re not going to jump ship simply because someone might pay a couple dollars extra.”
By labeling entry-level workers as “unskilled” and enforcing educational requirements while eliminating on-the-job training programs, employers have been throwing away generations of potential lifetime employees who could be more productive, more invested, and more knowledgeable about company culture. That’s a loss for everyone – not just those we’ve relegated to the bottom of the economy.