The Low-Wage Labor Market: Challenges and Opportunities for Economic Self-Sufficiency. Mismatch in the Low-Wage Labor Market: Job Search Perspective . Introduction


Increasing attention has been paid to the question of whether and to what extent the employment difficulties facing disadvantaged workers are exacerbated by problems of spatial, skills, and informational "mismatches." It has been suggested, for example, that the ability of less-skilled workers to adapt to structural changes in the labor market might be affected by aspects of geographic space and racial segregation within that space (i.e., disadvantaged workers may not reside where firms seeking workers are located), and/or by human capital considerations (i.e., the skills of disadvantaged workers may not match the needs of employers). Moreover, job seekers may have inaccurate or insufficient knowledge about potential job prospects, and employers may face these same informational deficits regarding job seekers.

Several economic changes negatively affecting disadvantaged workers have given rise to this set of questions about mismatch. Industrial and technological changes have increased the demand for workers with more than a high school degree across industrial sectors and have shifted the demand for less-skilled workers from higher-wage manufacturing industries to lower-wage service and retail jobs.(1)  There has been a corresponding increase in the use of temporary and part-time workers and a decrease in unionization, which have further contributed to the lower earnings of the least skilled.(2)  Moreover, there has been an outmigration of low-skilled jobs — in manufacturing, retail, and service — from central cities; however, the residential trends of disadvantaged central city residents have not mirrored these locational employment shifts.(3)

Other research in this volume addresses the first two questions of spatial and skills mismatches, whereas this chapter attends to the third — the informational side of the mismatch question. In particular, this chapter will explore one aspect of informational access — the issue of job search and recruitment. Job search strategies are an important mechanism by which job seekers and employers acquire information about one another. The type of method employed will ultimately direct the job search and have implications for the kind and quality of information acquired. If employers and job seekers are relying on different search methods, or if particular search methods benefit some job seekers more than others, the quality of job matching may be affected.

As Holzer's chapter in this volume suggests, some problems of information may be a consequence of spatial mismatch. For example, central city residents residing in job-poor areas may be less aware of job openings far from their home, and employers may use search strategies that make it difficult for them to gain such knowledge. Given that information about job openings is transmitted largely through the social networks of friends and relatives (a finding discussed in much greater depth later in this chapter), the social networks of spatially isolated individuals, assuming that they too are neighborhood-based, will be poor purveyors of information about employment opportunities outside of the central city. Although insufficient or inadequate information about job opportunities can be a consequence of spatial mismatch, information problems will not be resolved solely by addressing spatial barriers to employment.(4)  That is, geography may shape the information available to employers and job seekers, but spatial constraints are unlikely to entirely define how searches are carried out.

The goal of this chapter is to ascertain from the existing job search literature whether there are informational barriers to employment that arise from a mismatch between employer and job seeker search strategies and for whom this informational mismatch may be most serious. The focus on informational mismatch should not be interpreted as a discounting of other important contributing factors to the employment problems of disadvantaged workers. In fact, it is important to keep in mind that although the attention herein is on informational barriers, human capital factors and macro-level indicators of economic activity each explain a much greater proportion of the variance in employment rates, as compared to either spatial or informational considerations.(5)