An Interview with Harry Holzer

Co-author of the RSF book Where Are All the Good Jobs Going?

Harry HolzerHarry Holzer, a professor at Georgetown University, wrote Where Are All The Good Jobs Going? with Julia I. Lane, David B. Rosenblum and Fredrik Andersson. Holzer's recent research has examined job and worker quality in the labor market, as well as the effects of inequality and insecurity. Where Are All The Good Jobs Going? addresses the most pressing questions for today's workers: whether the U.S. labor market can still produce jobs with good pay for the majority of workers and whether these jobs can remain stable over time. A list of related publications by Holzer is available here.

Q: You and your co-authors argue that high-quality jobs are not disappearing in the United States, but they are increasingly unavailable to low-educated workers. What industries or sectors used to provide good jobs to low-skill workers, and why are they no longer an option? 

Holzer: Less-educated workers in the U.S.—in other words, those with a high school diploma or less—used to be able to get good jobs in many sectors, especially manufacturing. For men, these jobs were mostly production jobs and other kinds of blue-collar work; for women, they were often clerical. Many of these kinds of good jobs have disappeared, due to a combination of technological change, globalization, and the weakening of institutions (like unions and government regulations) that used to raise the quality of jobs beyond what the labor market provides. Today, "good jobs" increasingly require a strong set of basic cognitive and communication skills plus some postsecondary training or credential—whether those good jobs are in health care, retail trade, construction, or elsewhere in the service sector.

Q: You say traditional labor market discussions dealing with job polarization typically break down into two camps: "good workers" and "good jobs." Could you outline what these two positions mean, and why you argue this debate is "increasingly obsolete"?

Holzer: Too often, labor market analysts focus either on too few "good workers" or "good jobs" as the main problem in U.S. labor markets. The former refers to the education and skill levels that workers bring to jobs, while the latter refers to the pay and benefit levels offered on jobs independently of the skills of workers who fill them—which might be improved by encouraging more unions, stricter minimum wage laws and benefit mandates, etc. I feel this distinction is obsolete for two reasons: first, our analysis suggests that both worker and job quality contribute importantly to the compensation levels that workers receive; second, good jobs are increasingly filled by good workers—in other words, employers who pay relatively well are only willing to do so, in an increasingly competitive labor market, when the skills of the workers justify further investments in their productivity. So the question is not whether we need to improve worker quality or job quality, but how to improve both.

 
Related Resources

Q: Your data shows that new or growing firms have played a crucial role in replacing jobs lost in declining and dying firms. This finding leads you to suggest "trying to hold on to existing good jobs"—as Employment Protection Legislation (EPL) does in Europe—may not be appropriate. What policy interventions would you prefer?

Holzer: Protecting jobs that might be done at lower cost or higher productivity by someone else (often overseas) or by machines rather than people ultimately leads to a stagnating labor market and lower economic productivity. It is better to let these jobs disappear and encourage firms to create new ones, as long as some of them are high in quality.

Helping firms to improve the productivity and competitiveness of their workers is appropriate as well, as long as we do not protect jobs that remain relatively high in cost or low in productivity. It is also very important to help workers gain the skills they need to be productive in good-paying jobs, and help firms to create them. And, for those workers unfortunate enough to lose their jobs in a very dynamic and competitive labor market, we need to help them more as well, either through new education and training or through public provision of basic services (like health care) and wage insurance to help cushion the blows they will experience.

Q: Recently, you wrote an article calling on Congress not to cut funds for job training programs. The end of your book details a number of promising efforts to better train both children and adults for this new labor reality. Can you describe some of these good models, and what more needs to be done?

Holzer: I think a wide range of efforts can be undertaken to improve the skills and work readiness of American workers. Of course, the basic skills and education levels workers get in the K-12 system (or earlier) are very important. Beyond those, I support high-quality career and technical education, as in the Career Academies, as well as improved access to postsecondary education and improved completion rates there as well. Performance-based financial aid, mandatory counseling at college, and better information to high school students about the preparation required can improve these access and completion rates for disadvantaged students. For adults and dislocated workers, "sectoral" training models have been rigorously evaluated and seem quite effective; these target specific sectors of the economy that generate good jobs for less-educated workers, and usually employers are directly engaged in the training process and agree to provide jobs for the trained workers. "Career Pathway" models, involving combinations of classroom training and work experience, are very promising as well.

Q: Your book looks at data from 1992-2003, but the information may provide insight in an ongoing major policy debate: are current sustained unemployment rates caused by cyclical or structural factors?

Holzer: The book suggests that the labor market continues to create good jobs, but many workers may not have the skills to fill them. This sheds light on the cyclical-structural debate on current unemployment. My own reading of the unemployment data is that most unemployment now above 5% is cyclical, though there is a structural piece that is reflected in relatively high job vacancy rates in some sectors. As the economy slowly recovers, the structural piece will grow relatively more important—especially as the long-term unemployed have difficulty filling these good-paying jobs.

Reading List

Harry J. Holzer, Steven Raphael, and Michael Stoll. "Employers in the Boom: How Did the Hiring of Less-Skilled Workers Change During the 1990's?" Review of Economics and Statistics 88.2 (2006): 283-99.

Harry J. Holzer and Demetra Nightingale, ed. Workforce Policies for a Changing Economy. Washington DC: Urban Institute Press, 2006.

Fredrik Andersson, Harry J. Holzer, and Julia Lane. Moving Up or Moving On: Who Advances in the Low-Wage Labor Market? New York: Russell Sage Foundation, 2005.

Harry J. Holzer. What Employers Want: Job Prospects for Less-Educated Workers. New York: Russell Sage Foundation, 1996.

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