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Skilled Labor in High Demand

That may not have mattered for much of the last century. As the economy's growth engine shifted from agriculture to heavy industry to electronics, workers with a high school diploma could still reasonably hope for a long-tenured, relatively well-paying job on the local assembly line, performing largely repetitive tasks on equipment that changed little over the years.

For most of the post-World War II period, moreover, the inflation-adjusted wages of highly educated workers rose at about the average pace for all workers, while wages also rose for the less educated.

A Widening Gap Over the past 24 years, the wage gap has nearly doubled between college graduates and workers with only a high school diploma.

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But about two decades ago, many workers started falling behind. As wages for the more highly educated workers took off at an above-average rate, wages for low-skilled workers stagnated, according to Federal Reserve Chairman Alan Greenspan, who has noted with concern in frequent public statements the widening difference in earning power between higher- and lesser-skilled employees.

Those with a college degree now make about 74 percent more than those who have only a high school education, a figure that has nearly doubled since 1979, Labor Department figures show. The unemployment rate for those who hold at least a bachelor's degree is 2.7 percent, compared with 8.3 percent for those without a high school diploma.

Increasingly, employers say, a college degree has become a proxy for a host of basic qualities -- good communication skills, analytic ability and the capacity to keep learning on the job -- that are critical in the modern workplace.

"High school grads are not ready for prime time in modern manufacturing," said Ron Bullock, chairman and chief executive of Bison Gear & Engineering Corp., of St. Charles, Ill., which makes motorized gears for restaurant rotisseries, kidney dialysis equipment and other machines. He said about one in seven of his employees has some kind of engineering degree.

The company is "looking for people who can be group leaders," show up for work reliably and exercise initiative, Bullock said. "We don't get what we need from the public schools."

Modern auto manufacturing involves computer systems and global satellite positioning equipment. Automatic flush toilets in public restrooms require maintenance of electronic systems. Janitors have traded in their mops and buckets for more complicated machines and need basic math to dilute industrial chemicals properly.

"The basic skills have changed. . . . It's not just about brawn in manufacturing anymore. It's brains," said Phyllis Eisen, vice president of the Manufacturing Institute, the educational and research arm of the National Association of Manufacturers, whose members are grappling with the skills shortage. "The pressure of the global economy has made it impossible to have ordinary workers anymore. Businesses can't afford it. They can't afford the defects, the waste of time. . . . You've got to have a different kind of worker."

As it becomes harder to find the right workers here, entrepreneurs like Hurley say they begin looking for options, whether it's outsourcing work to another country or navigating the immigration bureaucracy to hire a foreign employee. The other alternative -- bidding up the price of labor to attract qualified applicants -- often isn't realistic, many business owners say, because it would make them uncompetitive.

But sometimes that is the only choice. In the health care industry, labor shortages have become acute as baby boomers age, life expectancy increases and Americans expect to be cared for with ever more sophisticated drugs and equipment.

Statewide, California projects a need for 10,000 new registered nurses every year for the next 10 years. But the state's educational institutions are producing only about 5,000 a year, a figure unlikely to grow in an era of budget deficits and cuts to the college and university system.

To stay competitive, San Jose Medical Center in California pays starting salaries of $70,000 a year and signing bonuses of up to $7,500 for nurses right out of school, said assistant administrator Leslie Kelsay. The hospital also has trouble hiring the technicians who do lab work and run X-ray and ultrasound machines.

Health care-related jobs account for more than half of the 30 occupations forecast to grow the fastest nationally in the next 10 years, according to the Labor Department.

President Bush, citing the need to train Americans "to fill the jobs of the 21st century," has proposed reorganizing federal worker retraining programs to help community colleges prepare workers for jobs in industries with identified labor shortages.

Job-training advocates welcome Bush's support after years of proposed federal cuts. But they complain that his initiative would reduce other training programs. In addition, they note that the focus also needs to be on education: Better-educated workers, research has found, are easier to retrain if they become unemployed.

The alternative, said Eisen of the manufacturing association, is for the economy to drift even further toward "a dual economy, an economy of haves and have-nots determined in terms of skills."

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