Economist: Low-Skill Jobs Drying Up

By Sandra Howe
Staff Writer

The job situation for college graduates may not be ideal, but the outlook is much worse for lower-skilled, less-educated workers, says Prof. Peter Gottschalk (Economics), and it may not improve unless the US re-examines its attitude toward public sector employment.

These findings are among the results of two research projects Gottschalk is conducting through grants from the Russell Sage Foundation to examine problems and issues facing low-wage workers.

In one project, funded with a $78,000 grant and titled "Are College Educated Workers Crowding Out Less Educated Workers?," Gottschalk points out factors which explain the plight of the low-skill job market. Contrary to popular belief, Gottschalk says, unemployed college graduates are not taking the jobs normally held by low-skilled, less-educated workers. The real problem, he says, is that the jobs themselves are disappearing.

"It used to be that a high school graduate could get a job on an assembly line or sweep floors, but technology has eliminated several of these low-skilled positions," said Gottschalk. "Unfortunately, the supply of these workers didn't dry up as fast as the demand for them did in the 1980s."

According to Gottschalk, wages in that market also have decreased considerably - by 12 percent for males during the 1980s.

Gottschalk acknowledges that many college graduates do take lower-skilled and lower-paying jobs, creating the impression that as a group they aren't doing well. But the evidence suggests otherwise: the gap in earnings between those holding bachelor's degrees and those who hold high school diplomas increased from 30 percent in 1979 to 54 percent in 1989, he said, and the number of college graduates also increased.

"We know [college graduates] are getting paid more and there are more of them, so it must be that the demand has increased too," he said. "The idea that the economy is not providing jobs for educated workers is simply not true."

Gottschalk said this study helps set the context for his other project. He and Richard Freeman, an economics professor at Harvard University, have commissioned a set of papers on the impact of policies the government could implement to increase the demand for less-skilled workers.

In his contribution to the volume, "The Impact of Changes in Public Employment on Low Wage Labor Markets," Gottschalk notes that the Comprehensive Employment and Training Act, the largest American public service employment program, employed only 1.7 percent of the total number of workers with a high school degree or less in 1990.

"While public sector employment policy cannot be the major part of the solution, it can still have a substantial impact on a large number of low skilled workers," he said. "I'm not saying it's a cure-all, but unemployed youth is one of the major problems in this country, so it certainly is something that should be on the agenda."

In his paper, Gottschalk warns that the push by powerful political forces towards smaller and more decentralized government may have unintended consequences on low wage workers. "A reduction in the size of the federal government will lead to a reduction in the wages of less skilled workers, since it pays a premium for such workers," he said, "which will make things worse for this group that is already in trouble."

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