Menus Subscribe Search

Follow us


Burgh Diaspora

empty-cubicles-office

(Photo: 06photo/Shutterstock)

What Talent Shortage? The Great American Brain Waste of Our Captive Labor Market

• March 12, 2014 • 2:00 AM

(Photo: 06photo/Shutterstock)

Our biggest businesses complain about a shortage of skilled labor. Instead of calling on the government to act, they should consider workplace policies that are friendlier to women and immigrants.

I don’t have any sympathy for U.S. companies complaining about a talent shortage. Business gets a free ride. Talent assumes the risk for education. (Sorry hometown, you don’t own regional graduates.) Local government will bend over backwards to produce labor for local business demands. And even after business hires the requested workers, it still complains. On top of all of that, corporate lobbyists secure legal protections to restrict the movement of talent from one place of employment to another. All the employer does is critique the system rigged for its benefit.

I’ve noticed two types of brain waste: female and immigrant labor. Both demographics represent a captive market. The employer gouges wages because of some de jure or de facto handicap. The ties that bind women and result in less pay for equal work:

Nearly half the women in the world do not work in the formal economy, and the global pay gap is estimated by the International Labour Organisation to be 22.9 per cent – in other words, women earn 77 per cent of what men earn. …

… Women take the bulk of time off when a baby is born, which affects relative pay. And women’s domestic duties are also regarded as a priority over employment in many countries.

This means women are working what Laura Sherbin, director of research at the Center for Talent Innovation, a think-tank, calls a “second shift”.

“There is pressure from family to quit,” says Ms Sherbin. She points to the example of a senior banker in India. “Even though the family could afford a web of support, she still got up in the morning and prepared all the lunches.”

Such demands mean women need flexibility in their working hours. In many cases, flexibility means a pay cut, especially when countries have no legislation in place to ensure part-time workers are paid the same as full-time workers on a pro-rata basis.

Emphasis added. In commuting terms, women have less geographic mobility. Mother needs to be near the school her kids attend. Less geographic mobility results in less earnings. This is the curse (or dream, for employers) of a captive labor market.

Highly skilled immigrants enjoy tremendous geographic mobility. Yet research turns up the opposite of the expected financial dividend:

“Overeducation is more of a reality for people who come to the United States to be with family,” said Waldorf, co-author of the research. “They have not been recruited by a specific employer, and they often do not find a job that matches their education.”

The researchers found that, throughout the period, the level of education of nearly half of immigrants was above the education requirements for their job, compared with one fourth of men born and living in the U.S. The prevalence of such “brain waste” exceeded 40 percent for immigrants with a bachelor’s degree, 50 percent for those with a doctoral or professional degree and 75 percent for those with a master’s degree. The overeducation prevalence for U.S. natives was 10-20 percentage points lower. Over time, immigrants find suitable jobs, but not to the extent of U.S. natives.

Waldorf noted that prevailing thinking assumes that highly educated immigrants are a significant gain for the U.S. economy and society. But the researchers said that “given the abundance of foreign and domestic talent in the United States, with much of it being poorly matched in the labor market, a policy shift toward attracting even more global talent may actually be backfiring.”

Contrary to the squawking about a national shortage in highly skilled workers, an “abundance of foreign and domestic talent” result in brain waste. The disconnect hurts the foreign born much more than natives. The de jure issue of citizenship puts immigrant labor at a considerable disadvantage. Rules are different for non-citizens. Employers exploit that.

I’m willing to believe we are running out of the low-hanging fruit of ready-to-work graduates. I haven’t noticed employers turning over rocks to plug talent gaps. Thus far, the call is for government to do something. Liberalize immigration. Pay for childcare. Concerning the war for talent, corporations are seeking a bailout.

Jim Russell

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

October 20 • 4:00 PM

The Bird Hat Craze That Sparked a Preservation Movement

How a fashion statement at the turn of the 19th century led to the creation of the first Audubon societies.


October 20 • 2:00 PM

The Risk of Getting Killed by the Police If You Are White, and If You Are Black

An analysis of killings by police shows outsize risk for young black males.


October 20 • 12:00 PM

Love and Hate in Israel and Palestine

Psychologists find that parties to a conflict think they’re motivated by love while their enemies are motivated by hate.


October 20 • 11:00 AM

My Dog Comes First: The Importance of Pets to Homeless Youth

Dogs and cats have both advantages and disadvantages for street-involved youth.


October 20 • 10:00 AM

Homophobia Is Not a Thing of the Past

Despite growing support for LGBT rights and recent decisions from the Supreme Court regarding the legality of same-sex marriage, the battle for acceptance has not yet been decided.


October 20 • 8:00 AM

Big Boobs Matter Most

Medical mnemonics are often scandalous and sexist, but they help the student to both remember important facts and cope with challenging new experiences.


October 20 • 6:00 AM

When Disease Becomes Political: The Likely Electoral Fallout From Ebola

Will voters blame President Obama—and punish Democrats in the upcoming mid-term elections—for a climate of fear?


October 20 • 4:00 AM

Coming Soon: The Anatomy of Ignorance


October 17 • 4:00 PM

What All Military Families Need to Know About High-Cost Lenders

Lessons from over a year on the beat.


October 17 • 2:00 PM

The Majority of Languages Do Not Have Gendered Pronouns

A world without “he.” Or “she.”


October 17 • 11:01 AM

How to Water a Farm in Sandy Ground

Physicists investigate how to grow food more efficiently in fine-grained soil.


October 17 • 10:00 AM

Can Science Fiction Spur Science Innovation?

Without proper funding, the answer might not even matter.


October 17 • 8:00 AM

Seattle, the Incredible Shrinking City

Seattle is leading the way in the micro-housing movement as an affordable alternative to high-cost city living.


October 17 • 6:00 AM

‘Voodoo Death’ and How the Mind Harms the Body

Can an intense belief that you’re about to die actually kill you? Researchers are learning more about “voodoo death” and how it isn’t limited to superstitious, foreign cultures.


October 17 • 4:00 AM

That Arts Degree Is Paying Off

A survey of people who have earned degrees in the arts find they are doing relatively well, although their education didn’t provide much guidance on managing a career.


October 16 • 4:00 PM

How (Some) Economists Are Like Doomsday Cult Members

Cognitive dissonance and clinging to paradigms even in the face of accumulated anomalous facts.


October 16 • 2:00 PM

The Latest—and Most Mysterious—Player in the Nasty Battle Over Net Neutrality

As the FCC considers how to regulate Internet providers, the telecom industry’s stealth campaign for hearts and minds encompasses everything from art installations to LOLcats.


October 16 • 12:00 PM

How Many Ads Is Too Many Ads?

The conundrum of online video advertising.


October 16 • 11:00 AM

Unlocking Consciousness

A study of vegetative patients closes in on the nature of consciousness.


October 16 • 10:00 AM

The False Promises of Higher Education

Danielle Henderson spent six years and $60,000 on college and beyond. The effects of that education? Not as advertised.


October 16 • 8:00 AM

Faster Justice, Closer to Home: The Power of Community Courts

Community courts across the country are fighting judicial backlog and lowering re-arrest rates.


October 16 • 6:00 AM

Killing Your Husband to Save Yourself

Without proper legal instruments, women with abusive partners are often forced to make a difficult choice: kill or be killed.


October 16 • 4:00 AM

Personality Traits Linked to Specific Diseases

New research finds neurotic people are more likely to suffer a serious health problem.


October 16 • 2:00 AM

Comparing Apples to the Big Apple: Yes, Washington, D.C., Is More Expensive Than New York City

Why shouldn’t distant locales tied to jobs in the urban core count in a housing expenditure study?


October 15 • 4:00 PM

Why Asian American Parents Are the Least Likely to Spank Their Kids

Highly educated, middle-class parents are less likely to use corporal punishment to discipline their children than less-educated, working-class, and poor parents.


Follow us


Love and Hate in Israel and Palestine

Psychologists find that parties to a conflict think they're motivated by love while their enemies are motivated by hate.

How to Water a Farm in Sandy Ground

Physicists investigate how to grow food more efficiently in fine-grained soil.

Unlocking Consciousness

A study of vegetative patients closes in on the nature of consciousness.

Advice for Emergency Alert Systems: Don’t Cry Wolf

A survey finds college students don't always take alerts seriously.

Brain’s Reward Center Does More Than Manage Rewards

Nucleus accumbens tracks many different connections in the world, a new rat study suggests.

The Big One

One company, Amazon, controls 67 percent of the e-book market in the United States—down from 90 percent five years ago. September/October 2014 new-big-one-5

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.