“My low-skill workers, my cooks, my dishwashers, my messengers, my shoe-shine people, those who work at Dunkin’ Donuts — they don’t have the academic skills to sit in a corner office,” New York City’s new mayor Eric Adams said at a press conference, stirring up controversy less than a week into office.
The remarks were part of a broader plea to employers urging them to bring remote workers back to the office and arguing that work from home was harming small businesses across the city. But in doing so, he referred to in-person, service sector workers as “low-skill workers.” Those remarks rankled some, including US Rep. Alexandria Ocasio-Cortez, state Sen. Jessica Ramos, and a number of other commentators who reacted negatively to the pejorative connotation of “low-skill.”
The online response to Adams’s comments centered around whether it was accurate to refer to people working in service sector jobs as “low skill,” pointing out the difficult nature of the jobs Adams listed. Critics also noted that for the past two years, these workers have been called “essential” by everyone, from the Centers for Disease Control and Prevention to major corporations in their commercials. The controversy seemed to miss Adams’s broader point — that remote workers in high-wage and highly educated industries working from home have undermined New York City’s service sector. In a recent National Bureau of Economic Research paper, researchers find that “low-skill service workers in big cities bore most of the recent pandemic’s economic impact.”
There’s that phrase again — “low skill.”
It’s common in economics to refer to labor that does not require extensive specialized training or certification as “unskilled.” But used outside of the academic field, it’s a term that obscures much more than it reveals. By implying low-skilled workers inherently don’t have the academic chops to do the higher-paid, remote, work-from-home jobs, Adams succumbs to a common error: Believing that skill (not supply and demand for particular types of labor) is what differentiates higher-paid office workers from in-person service laborers.
The faulty assumptions behind “low-skilled workers”
When people refer to low-skill workers, the more precise term would be low-wage. There is nothing inherently unskilled about standing in a hot kitchen for hours cooking or picking countless pieces of fruit every day in the blistering heat.
This isn’t a pedantic distinction. The failure to understand that skill does not track with wages often leads people to advocate for bad policies that don’t actually help low-wage workers access a more financially stable future.
The first way we know that wages don’t directly track with “skills” is that many college-educated Americans are working those low-wage jobs. According to the New York Federal Reserve, roughly 40 percent of recent college graduates are underemployed or “working in jobs that typically do not require a college degree.”
There is no absolute inherent measure of skills that determines whether a worker has what it takes to sit in a corner office. Skill is dependent on the context of supply and demand for specific tasks and roles. If tomorrow a computer could suddenly do my job, or if everyone decided they didn’t want to read explainers anymore, nothing would have changed about how “skilled” I am, but everything would change about Vox’s willingness to pay me my current salary to continue to do it.
Further, policymakers have often erred in attempting to respond to unemployment issues by trying to make employees more “skilled.” In the aftermath of the Great Recession, pundits and politicians alike made a ton of noise about the so-called “skills gap,” essentially blaming workers for not having the right credentials or expertise for the jobs that were available.
As Matthew Yglesias wrote for Vox:
Everyone from the US Chamber of Commerce to the Obama White House was talking about a “skills gap” … Harvard Business Review ran articles about this — including articles rebutting people who said the “skills gap” didn’t exist — and big companies like Siemens ran paid sponsor content in the Atlantic explaining how to fix the skills gap.”
But the skills gap wasn’t real.
During a recession, the balance of power is in employers’ hands. Bosses knew that many people were out of work; they could stand to be picky when it came to hiring and so they demanded more credentials, complaining when applicants didn’t meet that high bar. Only when the labor market tilted in workers’ favor did they bother to take less obviously credentialed applicants more seriously and stop bleating about a “skills gap.”
“As the labor market starts getting tighter then you might sit down and actually read someone’s resume and realize that ‘Hey this person was in the Army for five years doing a complicated mechanical task’ and that’s really relevant to the work that we do,” explained Matt Darling, employment policy fellow at think tank Niskanen Center.
Employees didn’t become more “skilled,” the labor market changed.
Why is this important? Because if you believe that the problem with unemployment or underemployment is about how “skilled” an individual is, then you’ll do things like blame teenagers for not identifying which skills they’ll need for future employment opportunities. Instead, policymakers should understand that pushing for tight labor markets will induce firms to hire from nontraditional backgrounds and invest in the appropriate training.
Wages aren’t based on skills, they’re based on scarcity and want. You could be the best Ping-Pong champion in the world, and if nobody wants to watch Ping-Pong you probably won’t make a living playing the sport. Alternatively, you could be a terrible construction worker, but if there’s a severe enough shortage of people needed to build houses, you could get by without ever improving your “skills.”
During the pandemic, the government has pursued expansionary fiscal and monetary policy. As a result, many workers have been empowered to find new and better jobs fueling the “Great Resignation” as they abscond from their employers for better opportunities. These workers did not suddenly become more skilled over the last two years, they gained leverage in a labor market that can no longer demand they jump through hoops in order to do a job they always had the ability to do.
