ECONOMIC DEVELOPMENT QUARTERLY / November 2001
Employees are working for individual employers over shorter tenures—whether by choice or because jobs are being created and destroyed at a rapid rate. Overall, current research has not con- cluded that managers have little commitment to their workers. However, this research does demon- strate how the market pressures being exerted on small manufacturers to keep costs low and variable may create working conditions that discourage retention and loyalty.
. . . the concept of a career ladder is still appropriate for understanding occupational mobility in a local economy as well as within an industry.
Job stability will lead to increased wages and benefits only if career ladders exist and if workers obtain the skills needed to advance them. The “ladder” theory of career advancement suggests that workers, gaining skills, experience, and seniority advance from entry-level work into better pay- ing, higher skilled occupations. This model suggests that employers also benefit because labor pro- ductivity increases as workers accumulate knowledge about production processes. Although such a ladder may not exist in a single manufacturer, the concept of a career ladder is still appropriate for understanding occupational mobility in a local economy as well as within an industry.
For most production jobs, the traditional model has been for employers to seek entry-level applicants with strong basic skills. In the case of the metalworking industry, for example, employ- ers prefer to hire workers who have completed high school, are able to read and write English, and can demonstrate proficiency in mathematics (Theodore, 2000). Strong communication skills and the ability to work well with others are also required for work sites organized around team con- cepts. Entry-level metalworking employees often begin as helpers or assistants to experienced operators. The responsibilities of an assistant include material feeding, removal of finished prod- ucts, and cleanup. As their responsibilities increase, trainees adjust feed speeds, change cutting tools, and inspect the quality of finished products.
As workers gain familiarity with technology and work practices, they may become machine operators responsible for an entire set of machinery. In most cases, metalworking machine opera- tors learn their trade on the job. During this time, workers develop a basic proficiency in operating machines, hone these skills over the course of several years as they improve their technique, and eventually become highly skilled operators. Workers who advance to the position of setup operator are required to exercise discretion over the entire work process and must be multiskilled because they work with several machines (many of them computer-controlled) and often in teams. Increas- ingly, these workers communicate with other functional areas within the workplace and even with customers.
Moving between semiskilled assistant and the skilled machine operator positions is critical to advancing from low-wage to livable wage employment (Jenkins, 1999). Whereas the median hourly earnings of a material handler (semiskilled) in the Chicago metropolitan area was $9.90 in 1998, the median wage of skilled machinists was $14.08 an hour. The most advanced production positions, such as numerical controlled machine programmers, pay median hourly wages of around $21.
It appears that new pressures for flexibility have disrupted job ladders and muddled job responsibilities, especially in small establishments.
Union seniority rules traditionally guarded the rungs on the ladder, calibrated wages, and made promotion decisions more predictable (Dresser & Rogers, 1997). Does this model still hold? It appears that new pressures for flexibility have disrupted job ladders and muddled job responsibili- ties, especially in smaller establishments. Recent studies suggest that career ladders are becoming flatter and that certain entry-level occupations are becoming disconnected from high-quality jobs to which workers had traditionally advanced (Cappelli, 1999; Cappelli et al., 1997; Fitzgerald & Carlson, 2000; Herzenberg, Alic, & Wial, 1998). Even those workers who progress beyond the most poorly paid entry-level jobs may find that the career paths offered by their employers have been dramatically shortened or eliminated.
Career ladders are already truncated or nonexistent in many small companies because of their less developed divisions of labor. The smallest firms offer the fewest opportunities for promotion, their highest paid positions having the least turnover. Like their larger customers, small manufac- turers are frequently turning to temporary staffing agencies to provide entry-level workers.