Opposite ends of the labor market face opposite problems

Rising efficiency and technology are adding work for highly paid professionals while taking it away from low-skill employees.

As Americans head away for Labor Day weekend, two extremes of the labor force are crying out for help.

Millions, often among the economy's most successful professionals, say they feel overworked while millions more, particularly among low-skilled workers, are starved for a paycheck or more work hours.

Experts say the two ends of the labor market are in fact the Janus faces of the same economic force. A higher level of economic efficiency is playing differently at the furthest points of the labor spectrum. With the help of improved technology, employers have grown adept at coaxing the most from their workers by monitoring productivity, basing pay on performance, and keeping the BlackBerry crowd connected to the workplace around the clock. The forces of globalization and technology, however, have made it harder for many workers with less education to find good jobs.

"We are in a watershed time in our economy, where technology has transformed how we work, [and] globalization is changing the rules of the game for low-skilled, semiskilled workers," says John Challenger, an expert on workplace trends with the outplacement firm Challenger, Gray & Christmas in Chicago.

Labor market stress reveals inequality

The good news is that the ranks of the underemployed tend to drop as an economic expansion gathers momentum – and that's been the case for several years.

In fact, the unemployment rate is lower now than it was a decade ago – at a similar point during the long expansion of the 1990s. Many economists say that for all its strains and stresses, the US economy offers greater opportunities for workers now than ever.

But as Labor Day arrives, the pace of economic growth appears to be slowing. And some economists worry that, despite a low official unemployment rate, the share of the population that's employed remains lower than it ought to be.

In a labor force of 152 million, 7.2 million are officially unemployed and searching. Another 4.1 million are working shorter hours than they want. Still another 4.9 million would like to be working but aren't even counted in the labor force because they have stopped looking for a job.

"I've been turned down so much I hardly go looking now," says Shakeem Allah, a young black man who says his race is a major obstacle to employment.

It's midday in downtown Boston, and he's on a break from volunteer work trying to help African-American teens steer clear of gang activity. That goes on his résumé.

A few blocks away, Margaret Minister O'Keefe has a job that keeps her plenty busy. An attorney specializing in intellectual property rights, she's navigating a day of meetings in Boston after helping her two young children start a new year of school.

"Sometimes it can be overwhelming," says Ms. O'Keefe. That's a sentiment shared to some degree by nearly half of all workers, according to one new survey in which a representative sample of employed Americans were polled.

In the survey, conducted for human-resources firm Kronos Inc., 49 percent said work affects their personal life by making them "feel overtired and overwhelmed." Twenty-two percent said they had difficulty balancing work and personal responsibilities.

Meanwhile, for all their concerns, 71 percent say they are generally satisfied with their employer. Even though they would like to have higher pay or more help managing their workload, they often feel their jobs are rewarding.

For O'Keefe, the balancing act has improved a lot since she and her husband moved from Washington to Portland, Maine, several years ago. She left behind 70-hour workweeks. Now with a more family-friendly firm, she says the workload is still demanding but much more manageable.

Yet in juggling family life, she says she often works at home both early in the morning and at night after her son and daughter are in bed.

She's not sure if people are really working more than they used to. Indeed, some economic research suggests that people have as much leisure time as ever. But millions of Americans are clearly feeling the strains of an economy that puts a premium on worker productivity.

One symptom: The regular pay raise is giving way to more compensation in the form of bonuses and other merit-linked rewards.

"Pay for performance now dominates how people are paid," says Mr. Challenger, the labor expert. There's more weeding out of people who don't work as hard, he says, as companies focus on measuring ability "every which way."

Perspiration giving way to inspiration

All this adds to the long-term trend that an increasingly knowledge-based economy benefits those with more education.

The unemployment rate for those with a bachelor's degree is now 2.3 percent, versus 6.7 percent for those with less than a high school diploma.

Among the groups with the greatest challenges: African American males and former blue-collar workers whose jobs have shifted overseas.

Workers losing automotive assembly jobs, for instance, have a hard time finding work that replaces the middle-class wages that their union helped win.

Sometimes, they can afford to wait on the sidelines, relying on a spouse's income or personal savings. But economists say that many discouraged job seekers will eventually be forced back into the official labor market.

Both the "overworkers" and the "underworkers" are part of an economy that has seen productivity rise much faster than worker compensation.

"What jumps out at you is the gaping hole between productivity growth and earnings," says Jared Bernstein, an economist at the Economic Policy Institute in Washington. People are "working harder and smarter but not really seeing remuneration that they ought to be seeing."

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