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Chapter 5. Do Employers Need More Educated Youth?
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108 Chapter 5 Do Employers Need More Educated Youth? O ne of the great policy questions of the 1990s is how to increase youths’ skills to meet the needs of today’s workplaces.1 National blue-ribbon panels write about the academic skill needs of the workplace while complaining of youths’ poor academic skills (CED 1985; NAS 1984; NCEE 1990). Business leaders give wellpublicized speeches in which they place much of the blame for inadequate skills at the school doorstep. Yet critics have been skeptical about whether students really need academic skills for the jobs they obtain (Ray and Mickelson 1993). Economists and sociologists offer conflicting views of employers’ needs. Neoclassical economists assume that employers seek to maximize productivity, that they shop around for the best workers, and that they pay workers according to their skills and productivity (Becker 1964; Heckman 1994). In contrast, sociologists contend that employment structures constrain job access and wages. In a wellknown study, Ivar Berg (1971) showed that job access is constrained by educational credentials, and that employers often do not need or use the amount of education that they formally require. Subsequent research supports this argument (Attewell 1987; Levin and Rumberger 1987; Shaiken 1984; Squires 1979). This dispute remains unresolved partly because of difficulties in providing suitable evidence. Economists say that “employers need skills,” but “needs” and “skills” are not easily measured, so empirical studies tend to examine indirect proxies. “Years of education” is the usual measure of academic skills, yet it is clearly a poor indicator when many high school graduates lack eighth-grade math and reading skills (NAEP 1985). Economists measure employers’ “needs” by the wages they pay for employee qualifications—for example, years of education or test Do Employers Need More Educated Youth? 109 scores (Murnane et al. 1995). However, by this definition, employers do not seem to need any academic achievements from those who fill the early jobs taken by high school graduates, for they neither offer higher pay nor have a greater propensity to hire based on academic achievements—that is, grades, test scores, or teacher evaluations (Griffin et al. 1981). Employers state that they require academic skills, but their actions do not support these statements. Moreover, employers rarely distinguish between stated requirements and actual needs. Sociologists like Berg stress this distinction: when they measure “needs” by rating the skills needed to do job tasks, they find that employers pay excessive wages for “unneeded education.” Although some sociologists concede that wages bear some relation to employers’ needs, the relationship is far from perfect, since wages are also affected by pay hierarchies, compensation systems , and norms about age, gender, status, and so on (Althauser and Kalleberg 1981; Jacobs 1989; Rosenbaum 1984), including job evaluation systems that explicitly constrain pay levels by the imputed value of particular credentials (Bellak 1984; Cappelli 1991; Rosenbaum 1984). If wage is a poor indicator of employers’ needs, and years of education is a poor indicator of skill, then studies of the relationship between wages and years of education are not good tests of the economic contention that employers need skills, or conversely, of the sociological contention that educational needs are overstated. This chapter takes an alternative approach: using qualitative evidence to examine the concepts of skills and needs in greater detail. First, rather than quantitatively measuring academic skills by the usual crude proxy (years of education), we qualitatively describe employers ’ reports of the specific academic skills they say they have difficulty getting and the conditions under which these needs arise. If employers are able to identify specific academic skills that they need and to indicate their relevance to job conditions, then Berg’s contention of employers ’ credential requirements are excessive would be unsupported. Second, rather than identifying employers’ needs through wages, we examine two other indicators of needs: whether some employers take costly actions to recruit or retain workers with skills, or conversely , to adapt to workers’ low skill levels; and whether employers who claim to have high academic skill needs are more likely to take such costly actions than other employers. We are particularly interested in those employer actions that are discretionary and taken at the employer’s own initiative, for we expect that such actions are a less ambiguous indication than wages that the employer actually needs these skills. If employers take costly actions to recruit, retain, or adapt to workers’ skills, and if these actions are taken by employers who have reported [3.15.15.210] Project MUSE (2024-04-17 19...