LABOR MARKET - Blue collar, manual labor and care jobs, once considered the past, are making a comeback as we enter 2023, and employers cannot find enough workers. How can these jobs be strengthened, and worker shortages addressed.
Good Jobs, Bad Jobs, No Jobs, is the title of a 1979 book by Columbia University professor, Eli Ginzberg, one of the leading proponents of what was then called “manpower policy”—now “workforce policy”. The book, as do Ginzberg’s other writings, reflects the confident establishment liberalism of the time: manual labor would be replaced by the “thinking for a living” and the knowledge economy; low paid “bad jobs” would be phased out in favor of stable and well paid “good jobs”; government spending on higher education and human capital programs would enable lower wage workforces to advance.
The four decades since have shown Ginzberg and other liberal policymakers to be wrong on nearly all of their labor market predictions and policy approaches. But their mistakes and hubris are a good starting point and cautionary tale for 2023, as layoffs and hiring freezes hit the knowledge economy; blue collar, manual labor and care jobs make a comeback; and employers scramble to meet worker shortages amidst continued low labor force participation rates.
Economist Gad Levanon has studied worker shortages over the past decade, first at the Conference Board and currently with Burning Glass Institute (BGI). Shortly before the pandemic in 2020, he and Board colleagues completed a study, US Labor Shortages: Challenges and Solutions, identifying a number of labor market trends leading to worker shortages in the non-knowledge economy, and accurately predicting subsequent shortages.
The trends start with the large baby boomer population reaching retirement, more and more older workers exiting the labor market and expected to exit through 2030. At the other end of the age spectrum is the growing number of younger workers, 16-24 entering post-secondary education, rather than the job world. Added to these demographic trends: a substantial increase in workers on various forms of government disability programs and a decline in the labor force participation of young men without a college degree.
Levanon summarized: “The combination of these trends—a stagnant working age population due to massive retirements, and disappointing labor force participation rates for several key demographics—is leading to a labor force with a rapidly growing share of college graduates, most of them uninterested in blue-collar and manual services jobs, and a shrinking number of non-college graduates. As a result labor shortages in blue-collar and manual services occupations are now more real than ever.”
Levanon went on to note that “a decline in the supply of blue-collar and manual service workers would not have been a problem if the demand for them was shrinking as well. But this is not the case. The demand for these workers continues to grow.” Among the drivers of this growth: ongoing labor demands in manufacturing, the expansion of e-commerce and worker needs in transportation and warehousing, and increases in personal care and health support positions.
The pandemic accelerated a number of the trends identified by Levanon, particularly the increase in the retirement rates of workers over 55 and the withdrawal from the labor force of non-college graduates. The result, as 2022 draws to a close, is near historic high levels of job openings overall, and widespread worker shortages precisely in the blue collar, manual services and direct care workforces.
Here in California, employers in a wide range of sectors utilizing these workforces complain of an inability to find and retain workers—a very partial list would include support staff at long term care facilities, assistants at local dry cleaners and small retail and service shops, independent living coaches for adults with developmental differences, truck drivers, home repair services
The worker shortages have had the positive impact during the pandemic of driving up wages in blue collar, manual services and care jobs. The latest wage increases in fact have been among the lower wage jobs.
At the same time, the wage increases have slowed in the past few months, and, like wage gains overall, have been undercut by the high inflation rates of 2022. Further, despite the wage gains, the gap remains large between the wages of these jobs and wages in most white collar jobs. The wage gains have not been sufficient to make substantial dents in the shortages.
For example, independent living coaches hired by the Regional Center in San Francisco started at $17-$18 an hour prior to the pandemic. The starting wage now is $21-$22 per hour. Still the Center cannot find these coaches or the supportive living coaches needed by clients. Long term care facilities in areas of California had starting salaries of $16-$17 an hour prior to the pandemic, which have climbed to $19-$20 an hour today, but these facilities are struggling to find workers. Even with the increases, wages in direct care lag behind other jobs.
So as we enter 2023, are there strategies that can bolster the rebirth of blue collar, manual services and direct care jobs, and meet the valued social goals that these jobs achieve? Are there ways to increase wages more significantly, or make these jobs more attractive in other ways, or to have greater expectation that these are jobs that workers should be undertaking?
The process of rebuilding the blue collar, manual services and care workforces, and in addressing workforce shortages, will take some time. Much of the past four decades have seen the devaluation of these jobs by the liberal workforce establishment. Blue collar and manual service jobs were to be avoided as “bad jobs”, in contrast to the “good jobs” in the knowledge economy. The strategy of liberals and business groups became to leave these jobs to immigrants, documented and undocumented, who would keep wages low.
But if the rebuilding of what might be called the “practical economy” is a gradual process, it is one that can start in 2023. Drawing on pandemic and post-pandemic workforce experiences, along with recent labor market data on worker shortages, three strategies stand out for both strengthening these jobs and meeting worker shortages, briefly described below:
- Wage and mobility strategies, sector by sector: Nothing will have the impact on recruitment and retention of workers, on addressing worker shortages, as will wage increases. Public relations campaigns to celebrate practical economy jobs will not move the needle nor appeals to prop up the social status of these workers.
Over the past few decades, there have been numerous attempts by advocacy groups and workforce intermediaries to improve wages in practical economy jobs, especially in the direct care positions, such as nurse assistant, personal assistant, and childcare and early education. Nearly all of these efforts have had minimal impacts, running up against constraints of government reimbursement rates and/or the ability/willingness of consumers to pay.
Nonetheless, it is wages that will drive a rebuilding of the practical economy workforce--and when possible to greater stability and mobility opportunities. All else is commentary.
- Mobilizing the public workforce system to target these job shortages, and expect job seekers to take these jobs: The centerpiece of the Biden Administration workforce strategy has been a “good jobs” strategy, by which the public workforce system of Local Workforce Development Boards and American Job Centers are not to place people into “bad jobs”, which include many of the jobs in the practical economy today. It has been a strategy that has shortchanged both employers and workers, while having little impact on improving the wages or other characteristics of many practical economy jobs.
Currently there are a lot of jobs that need to be done that are not yet good jobs. Helping to fill these jobs should be a task of the public workforce system as much as its other tasks—especially for workers who have had most difficulty finding or retaining employment. If the goal is to improve job quality, engaging with employers of these workers will be more effective than dismissing them as bad employers.
- Anchoring income, health subsidies, and other benefit programs to employment in lower wage jobs, not to guaranteed income schemes: Media attention in 2022 continues to be on universal basic income and guaranteed income schemes. There is an alternative approach to improving the economic condition of low wage households: trying benefit programs far more to employment, including in the practical economy jobs.
In Studs Terkel’s 1974 book, Working, workers in a range of mainly practical economy jobs talk about what they do and how they feel about what they do—a waitress, brick layer, janitor, nurse aide, and cabdriver among more than 30 occupations. These workers are not without complaints: the physical strains, boredom, rude customers, uncertainties. However, Terkel’s main theme is the meaning that these jobs give to the workers, who also talk about the craft and even artistry in their everyday activities.
The years since have seen many of these jobs marginalized and wages reduced due in part to technology, and in larger part to policy decisions made on globalization, immigration, and an orientation to the knowledge economy. Is it too late to pivot? Let rebuilding the practical economy be a main workforce goal in 2023.
(This essay first appeared in Forbes, December 20, 2022).
(Michael Bernick served as California Employment Development Department director, and today as Counsel with the international law firm of Duane Morris LLP, a Milken Institute Fellow and Fellow with Burning Glass Institute, and research director with the California Workforce Association. His newest book is The Autism Full Employment Act (2021))