Why We Have Low-Wage Jobs

A new book, "The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans," by Beth Shulman says that four myths underlie why we have so many low-wage jobs in America. This is a topic most economic developers would have more than a passing interest in as they struggle to increase the number and quality of jobs in their communities.

Here are the four myths:

Myth 1: Low-wage work is a temporary step on the ladder to a better job. Truth: Most people holding low-wage jobs never make it to a better job.

Myth 2: Training and new skills solve the problem. Truth: There are fewer high-quality jobs to move into, even with better skills.

Myth 3: Globalization stops us from doing anything about this problem. Truth: Very few low-wage jobs exist in globally competitive industries. Employers, politicians, (and I will add economic developers) use globalization as a whipping boy to scare people into taking low-wage jobs.

Myth 4: Low-wage jobs are the result of an efficient market. Truth: The market is our creation. We made decisions that created it and we can make decisions to change it.

What do I think?

Point 1: We could do a better job in designing meaningful work in organizations. Some companies excel at this challenge, and others simply do what they have always done.

Point 2: Technology is a factor to be considered in the design of jobs and how organizations perform work. We need to look more carefully at the direct and indirect effects of technology, especially IT, on how we perform work.

Point 3: Education in the long term will have a stronger impact in adding value to people than any other single thing we do about the low-wage job syndrome.

Point 4: We should not abandon training efforts. They will be needed as a component of lifelong learning for workers in all fields and industries.

Point 5: We need to examine the international division of labor and create new management strategies that effectively manage work performed by businesses and institutions across geography. Think "net-work" or "work-net."

Point 6: Economic development organizations need a new way to measure their impact. Job creation has been our primary metric from day one. We need to think about an integrated system of metrics that assesses jobs as one component of a "high-performing" organization. We should be looking at a bundle of performance metrics that focuses on high-performance work system, which includes jobs, innovation, productivity, ROI on a ratio of labor to capital, output, and global market position.

The question is whether EDO's can build the strategic relationships with companies that will allow these innovations to develop and grow. We need a new relationship to our customers that allows us to span our current narrow geo-political interests.