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
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

November 26 • 4:00 PM

Turmoil at JPMorgan

Examiners are reportedly blocked from doing their job as “London Whale” trades blow up.


November 26 • 2:00 PM

Rich Kids Are More Likely to Be Working for Dad

Nepotism is alive and well, especially for the well-off.


November 26 • 12:00 PM

How Do You Make a Living, Taxidermist?

Taxidermist Katie Innamorato talks to Noah Davis about learning her craft, seeing it become trendy, and the going-rate for a “Moss Fox.”


November 26 • 10:28 AM

Attitudes About Race Affect Actions, Even When They Don’t

Tiny effects of attitudes on individuals’ actions pile up quickly.


November 26 • 10:13 AM

Honeybees Touring America


November 26 • 10:00 AM

Understanding Money

In How to Speak Money, John Lanchester explains how the monied people talk about their mountains of cash.


November 26 • 8:00 AM

The Exponential Benefits of Eating Less

Eating less food—whole food and junk food, meat and plants, organic and conventional, GMO and non-GMO—would do a lot more than just better our personal health.


November 26 • 6:00 AM

The Incorruptible Bodies of Saints

Their figures were helped along by embalming, but, somehow, everyone forgot that part.


November 26 • 4:00 AM

The Geography of Real Estate Markets Is Shifting Under Our Feet

Policies aimed at unleashing supply in order to make housing more affordable are relying on outdated models.



November 25 • 4:00 PM

Is the Federal Reserve Bank of New York Doing Enough to Monitor Wall Street?

Bank President William Dudley says supervision is stronger than ever, but Democratic senators are unconvinced: “You need to fix it, Mr. Dudley, or we need to get someone who will.”


November 25 • 3:30 PM

Cultural Activities Help Seniors Retain Health Literacy

New research finds a link between the ability to process health-related information and regular attendance at movies, plays, and concerts.


November 25 • 12:00 PM

Why Did Doctors Stop Giving Women Orgasms?

You can thank the rise of the vibrator for that, according to technology historian Rachel Maines.


November 25 • 10:08 AM

Geography, Race, and LOLs

The online lexicon spreads through racial and ethnic groups as much as it does through geography and other traditional linguistic measures.


November 25 • 10:00 AM

If It’s Yellow, Seriously, Let It Mellow

If you actually care about water and the future of the species, you’ll think twice about flushing.


November 25 • 8:00 AM

Sometimes You Should Just Say No to Surgery

The introduction of national thyroid cancer screening in South Korea led to a 15-fold increase in diagnoses and a corresponding explosion of operations—but no difference in mortality rates. This is a prime example of over-diagnosis that’s contributing to bloated health care costs.



November 25 • 6:00 AM

The Long War Between Highbrow and Lowbrow

Despise The Avengers? Loathe the snobs who despise The Avengers? You’re not the first.


November 25 • 4:00 AM

Are Women More Open to Sex Than They Admit?

New research questions the conventional wisdom that men overestimate women’s level of sexual interest in them.


November 25 • 2:00 AM

The Geography of Innovation, or, Why Almost All Japanese People Hate Root Beer

Innovation is not a product of population density, but of something else entirely.


November 24 • 4:00 PM

Federal Reserve Announces Sweeping Review of Its Big Bank Oversight

The Federal Reserve Board wants to look at whether the views of examiners are being heard by higher-ups.



November 24 • 2:00 PM

That Catcalling Video Is a Reminder of Why Research Methods Are So Important

If your methods aren’t sound then neither are your findings.


November 24 • 12:00 PM

Yes, Republicans Can Still Win the White House

If the economy in 2016 is where it was in 2012 or better, Democrats will likely retain the White House. If not, well….


November 24 • 11:36 AM

Feeling—Not Being—Wealthy Cuts Support for Economic Redistribution

A new study suggests it’s relative wealth that leads people to oppose taxing the rich and giving to the poor.


Follow us


Attitudes About Race Affect Actions, Even When They Don’t

Tiny effects of attitudes on individuals' actions pile up quickly.

Geography, Race, and LOLs

The online lexicon spreads through racial and ethnic groups as much as it does through geography and other traditional linguistic measures.

Feeling—Not Being—Wealthy Cuts Support for Economic Redistribution

A new study suggests it's relative wealth that leads people to oppose taxing the rich and giving to the poor.

Sufferers of Social Anxiety Disorder, Your Friends Like You

The first study of friends' perceptions suggest they know something's off with their pals but like them just the same.

Standing Up for My Group by Kicking Yours

Members of a minority ethnic group are less likely to express support for gay equality if they believe their own group suffers from discrimination.

The Big One

One in two United States senators and two in five House members who left office between 1998 and 2004 became lobbyists. November/December 2014

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