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Don’t Blame Technology This Time

The alleged disappearance of low-skill job opportunities in the U.S. economy has been exaggerated.

Everyone knows that technology and the changing requirements of employers are making unskilled workers an endangered species, right? That without at least some college education, workers in the U.S. economy on the eve of the millennium-especially persons of color-are doomed? It’s a good story, and the storytellers are well meaning.

Only it’s not quite so.

According to a recent report by the U.S. Bureau of Labor Statistics (BLS), relatively low-skilled positions accounted for most of the wage-and-salary employment created in the United States between 1983 and 1993. BLS defines such jobs as those that “can be learned quickly and that generally do not require post-secondary education.” Moreover, projections based on BLS’s Occupational Outlook Handbook conclude that for the period 19922005, two-thirds of the fastest-growing occupations will call for no more than a high-school degree.

None of this says that education is unimportant-that would be foolish. Nor is it inconsistent with the finding by Harvard University economist Ronald Ferguson that racial differences in math and language skills, as measured by standard written tests, correlate strongly with the gap between the earnings of black and white youth. What the findings do say is that the alleged disappearance of low-skilled job opportunities in America has been greatly exaggerated.

Not only exaggerated, but misunderstood. It turns out that what employers seem to want most from new workers is not academic credentials but rather evidence that the person has acquired basic skills and is able and willing to learn on the job. Recent studies support this point of view. Michigan State University economist Harry Holzer found from a survey of nearly 3,000 employers in four metropolitan areas (Los Angeles, Detroit, Boston, and Atlanta) that entry-level jobs are open to people with varied backgrounds. For hiring into jobs containing tasks that involve daily reading and writing, arithmetic, use of computers, or dealing with customers, Holzer found that companies typically want no more than a high-school diploma, some experience, or prior training and references.

A survey of another 3,000 companies nationwide by the U.S. Census Bureau yielded similar conclusions. Employers seeking to fill new jobs, and to fill vacancies in existing jobs, put relatively low priority on the candidates’ years of schooling, test scores, or teacher recommendations. What matter far more are the applicant’s attitude, communication skills, and recommendations from previous employers.

Which brings us to a companion myth. It is by now well known that earnings inequality widened considerably during the 1980s (and continues to do so). In particular, the wages of low-skilled workers at the bottom of the ladder fell drastically behind the average. Most economists believe that a major explanation for this trend has been a tendency for newly installed technology to require high-skilled workers to operate it. But new studies by economist David Howell and others paint a picture inconsistent with this theory. Between 1980 and 1990-the decade of growing income inequality-there was no change in the mix of skills to be found within specific occupations. The pace at which jobs are becoming more skill-intensive has not accelerated.

At the base of this flawed analysis is the perception of technology as primarily skill-demanding rather than as skill-enabling. The conventional wisdom assumes that a new technology-intensive task, such as navigating the World Wide Web or operating a computer-controlled printing press, requires that workers have the requisite skills coming into the job.

Some managers do impose such requirements. But they don’t have to. I have seen barely computer-literate secretaries learn on the job to maneuver around the Internet. And at a Chicago-based company printing children’s books in a spanking new plant on the Mexican border, I observed young men and women barely off the farm training-again, on the job-to operate state-of-the-art printing equipment. The user-friendliness of the software combined with the understandable fears of unemployment motivated the unskilled workers to get the most from the technology.

Moreover, it is impossible to know in advance exactly what sort of worker skills and backgrounds will be best suited to gaining the most out of a new technology. Typically, it is the existing work force, with its existing abilities, on whom the new technologies are tried. The most adaptive companies are those whose managers and workers learn the most from such trials.

If the wages of poorly educated workers are falling, we need to look for explanations other than technology. After all, the same technologies have penetrated factories and offices in Europe and Asia, yet nowhere outside of the United States have low-end wages fallen so far and so fast. Clearly, the relationship between technology and job skill is a lot more complicated than the public has been led to believe-and full of opportunities as well as pitfalls.

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