Menus Subscribe Search

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
Jim Russell is a geographer studying the relationship between migration and economic development.

More From Jim Russell

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

Recent Posts

September 19 • 4:00 PM

In Your Own Words: What It’s Like to Get Sued Over Past Debts

Some describe their surprise when they were sued after falling behind on medical and credit card bills.



September 19 • 1:26 PM

For Charitable Products, Sex Doesn’t Sell

Sexy women may turn heads, but for pro-social and charitable products, they won’t change minds.


September 19 • 12:00 PM

Carbon Taxes Really Do Work

A new study shows that taxing carbon dioxide emissions could actually work to reduce greenhouse gases without any negative effects on employment and revenues.


September 19 • 10:00 AM

Why the Poor Remain Poor

A follow-up to “How Being Poor Makes You Poor.”


September 19 • 9:03 AM

Why Science Won’t Defeat Ebola

While science will certainly help, winning the battle against Ebola is a social challenge.


September 19 • 8:00 AM

Burrito Treason in the Lone Star State

Did Meatless Mondays bring down Texas Agriculture Commissioner Todd Staples?


September 19 • 7:31 AM

Savor Good Times, Get Through the Bad Ones—With Categories

Ticking off a category of things to do can feel like progress or a fun time coming to an end.


September 19 • 6:00 AM

The Most Untouchable Man in Sports

How the head of the governing body for the world’s most popular sport freely wields his wildly incompetent power.


September 19 • 4:00 AM

The Danger of Dining With an Overweight Companion

There’s a good chance you’ll eat more unhealthy food.



September 18 • 4:00 PM

Racial Disparity in Imprisonment Inspires White People to Be Even More Tough on Crime

White Americans are more comfortable with punitive and harsh policing and sentencing when they imagine that the people being policed and put in prison are black.



September 18 • 2:00 PM

The Wages of Millions Are Being Seized to Pay Past Debts

A new study provides the first-ever tally of how many employees lose up to a quarter of their paychecks over debts like unpaid credit card or medical bills and student loans.


September 18 • 12:00 PM

When Counterfeit and Contaminated Drugs Are Deadly

The cost and the crackdown, worldwide.


September 18 • 10:00 AM

How Do You Make a Living, Molly Crabapple?

Noah Davis talks to Molly Crapabble about Michelangelo, the Medicis, and the tension between making art and making money.


September 18 • 9:00 AM

Um, Why Are These Professors Creeping on My Facebook Page?

The ethics of student-teacher “intimacy”—on campus and on social media.


September 18 • 8:00 AM

Welcome to the Economy Economy

With the recent introduction of Apple Pay, the Silicon Valley giant is promising to remake how we interact with money. Could iCoin be next?



September 18 • 6:09 AM

How to Build a Better Election

Elimination-style voting is harder to fiddle with than majority rule.


September 18 • 6:00 AM

Homeless on Purpose

The latest entry in a series of interviews about subculture in America.


September 18 • 4:00 AM

Why Original Artworks Move Us More Than Reproductions

Researchers present evidence that hand-created artworks convey an almost magical sense of the artist’s essence.


September 17 • 4:00 PM

Why Gun Control Groups Have Moved Away From an Assault Weapons Ban

A decade after the ban expired, gun control groups say that focusing on other policies will save more American lives.


September 17 • 2:00 PM

Can You Make Two People Like Each Other Just By Telling Them That They Should?

OKCupid manipulates user data in an attempt to find out.


September 17 • 12:00 PM

Understanding ISIL Messaging Through Behavioral Science

By generating propaganda that taps into individuals’ emotional and cognitive states, ISIL is better able motivate people to join their jihad.


Follow us


For Charitable Products, Sex Doesn’t Sell

Sexy women may turn heads, but for pro-social and charitable products, they won't change minds.

Carbon Taxes Really Do Work

A new study shows that taxing carbon dioxide emissions could actually work to reduce greenhouse gases without any negative effects on employment and revenues.

Savor Good Times, Get Through the Bad Ones—With Categories

Ticking off a category of things to do can feel like progress or a fun time coming to an end.

How to Build a Better Election

Elimination-style voting is harder to fiddle with than majority rule.

Do Conspiracy Theorists Feed on Unsuspecting Internet Trolls?

Not literally, but debunkers and satirists do fuel conspiracy theorists' appetites.

The Big One

One in three drivers in Brooklyn's Park Slope—at certain times of day—is just looking for parking. The same goes for drivers in Manhattan's SoHo. September/October 2014 new-big-one-3

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