Who’s Not Working and Why: Employment, Cognitive Skills, Wages, and the Changing US Labor Market

Cecil A.L. Pearson (School of Business, Murdoch University, Australia)

International Journal of Manpower

ISSN: 0143-7720

Article publication date: 1 May 2000




Pearson, C.A.L. (2000), "Who’s Not Working and Why: Employment, Cognitive Skills, Wages, and the Changing US Labor Market", International Journal of Manpower, Vol. 21 No. 3/4, pp. 322-330. https://doi.org/10.1108/ijm.2000.21.3_4.322.1



Emerald Group Publishing Limited

Copyright © 2000, MCB UP Limited

This book is the culmination of thorough research that examines the US labour market from 1970 to 1996. Extensive databases were employed to comprehensively and cogently evaluate prominent phenomena of a disturbing escalation of male worklessness and growing female participation in the workforce, wage inequality, and a stagnating or falling of real wages. Moreover, these data surprisingly demonstrate that during this long‐term growth in unemployment jobs for less educated workers have in fact increased. Remarkably, these nationwide trends have occurred during a 25‐year period of American society renowned for its educational and economic prosperity. The book content challenges simplistic notions that formal education will assure job choice, a contention that has serious implications for conventional assumptions about work, employment and educational systems in contemporary society.

Unlike previous endeavours that often narrowly link education with job prospects a wider framework is used in this book. Essentially, two quite unique databases are employed. The first, based on typical Census Bureau data, provides the underpinning for a traditional approach to analysing changes in the US labour market. Not unexpectedly, these data show substantial job losses as a consequence of the decline of the manufacturing industry with the emergence of new jobs in an escalating service sector, the loss of work opportunities and change of job type with the information‐technology revolution, and more job lay‐offs for less educated people with more competition for better educated people as the international market arena developed. An employment feature of this period was the greater participation of women in both the workplace as well as in educational courses (1971 onward) with a corresponding increase in the joblessness of men. The authors, however, discerned from these data that while education was linked with employment there were some worrisome trends. For instance, in a period of a growing US educated population, jobs for the less educated had increased faster than the population growth, while jobs for the better educated increased at a slower rate. To assess the enigma of Who’s Not Working and Why the authors employed analyses that linked with a second unique data set.

The National Adult Literacy Survey was the second unique data set used in this study. In 1992 the survey was administered to assess the numeracy and literacy skills of all US adults. The authors, Pryor and Schaffer, contend that these competencies determine the level of cognitive skills of an individual. There is a wealth of evidence that cognitive skills are in practice the applied use of numbers and words, and hence are skills vital for resolving novel and unique problems that abound in today’s dynamic market place. It follows that those with greater cognitive skills have the potential to address this growing number of unusual or non‐routine jobs, better. The importance of cognitive skills is endorsed by progressive, contemporary educators who for some time have advanced the need to replace teacher‐directed pedagogies, that focus on information acquisition, with student‐centred forums that are designed to enhance competent language skills, good analytical and problem solving competencies, the ability to integrate ideas and concepts and the creation of life long learning skills in their students. Pryor and Schaffer make a connection of these more recent, progressive teaching objectives with a number of elements fundamental to working. Specifically, they link their two unique data sets, and through a variety of analyses are able to provide some extremely insightful commentary in terms of graduates who cannot achieve their job choice aspirations, an increasing wage inequality across the workforce, and advocate the need for upgrading of work relevant skills set. These conclusions have significant implications for postmodern society.

The publication of this book is both timely and relevant on at least two rationales. First, work is central to the life of people and it is evidenced in chapters 1‐6 that in the USA the activity of working has been embraced with various levels of educational pursuit. A strong inference that may be readily drawn is that in other dominant industrialised nations, such as the UK, Japan and Singapore there will also be a continual call for education intensive occupations. Consequently, it is to be expected in such communities there will be considerable expenditure of resources to maintain not only fundamental systems of working, but also the diversity of auxiliary and associated services. In addition, many of these more affluent countries provide a leading role in aiding the economic development of less advanced and third world nations. Yet the knowledge and wisdom employed in these vocationally relevant pursuits, activities and programmes underpins the US labour market, which has been shown by Pryor and Schaffer in a detailed explanation to be ailing.

Second, ameliorating some of the adverse effects identified by the authors has the capacity to improve the employability of a great deal of people. Currently, a number of countries are undergoing socio‐economic reform in the quest to achieve globalised status. As China, Eastern Europe and post‐Soviet republics undertake economic transformation from a socialist planned economy toward a more market based system, and other sovereign states, such as India, engage policies of economic liberalisation, there will be wholesale upheaval in the day‐to‐day private life sphere and the working lives of numerous populations. Not only will the regional development of the host country lead to wage disparities and inequalities as well as overall improvements in the living quality of many low income workers and their households, there will also be shifts in work arrangements in donor countries because of the interconnectedness of globalised labour markets. Given that the literature of management and public administration has not led to the creation of a trouble free US labour market the adoption of similar systems in developing nations is likely to further exacerbate the adverse phenomena highlighted in this book. Consequently, in chapter 9, Pryor and Schaffer indicate a need for reframing of government policies, especially in the educational, human resource management and industrial relations domains to achieve less unemployment and reduced wage inequality across all labour markets.

The importance and relevance of cognitive skills in the US labour market is addressed in chapters 7 and 8. In chapter 7 the authors provide useful commentary about elements (of the labour market) that have substantially changed, and why current paradigms lack comprehensive explanatory power for the observed dysfunctional phenomena. The conclusion of chapter 8 is that the examined subjective and institutional factors are not the major elements that have influenced the US labour market. This is interesting as attitudes, motives, soft skills and communication as well as organisational practices have often been perceived as important dimensions of employment. A key finding is that university graduates with relatively high cognitive skills are in greatest demand throughout much of the US labour market.

This book provides compelling reading for a wide spectrum of society. Throughout history work and working has been the focus of interest for an enormous number of people and some readers will choose to delve into this book if only to enquire of the trends of the US labour market for the past 25 years and how it has provided economic benefits as well as some of the non‐economic psychological benefits. However, this book is more likely to engage the attention of educators who have an important role in the career development of people; the book is also likely to draw the respect of human resource practitioners who endeavour to successfully match people with organisational tasks, and employer bodies who carry the mantle of responsibility for national prosperity. Moreover, the content of this book should be of considerable curiosity to those who are genuinely searching for a prescription how to fulfil their job ambitions. Most importantly the book should intrigue and challenge academics and the broader community, for Pryor and Schaffer, in a comprehensive and coherent account have confirmed what many have often suspected. Specifically, the authors have shattered myths about the causes of increasing joblessness in contemporary industrial society, yet the education industry, a cornerstone of advanced society, has been established on some of these common (mythical) assumptions. Above all the book is likely to appeal to the vigilance of those who have, or are likely to have, a pecuniary stake in labour market problems, which encompasses an extremely large number of people. Although the book is a most complex study it is presented in a style which is accompanied with a variety of figures and tables that provides a format which is readable by all literate adults. Overall, the book presents substantial implications as well as serious challenges for labour markets and interrelated issues in all societies of modernity.

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