Select Page

Free Labor Markets Benefit Workers and Businesses



By Chris Edwards, Cato Institute


Governments undermine flexible labor markets with occupational licensing, collective bargaining, minimum wages, and other regulatory interventions. So it is nice to read about how—despite the government‐​imposed rigidities—U.S. labor markets are successfully responding to the changing demands of today’s workers and businesses.

The Wall Street Journal reports on blue collar workers moving into higher‐​skilled tech‐​oriented jobs. Workers are taking short noncollege training courses to fill the many new positions, and companies are expanding their on‐​the‐​job training opportunities. Tech jobs are generally union‐​free and depend on voluntary certifications, not government‐​imposed occupation licensing.

The pandemic created shifts in the U.S. economy, and many workers and businesses have new needs. The Journal article suggests that free labor markets are meeting those needs with focused training courses and new flexibilities in recruitment policies.

As the labor market reorders, more Americans are making the leap from blue‐​collar jobs and hourly work to “new collar” roles that often involve tech skills and come with better pay and schedules. … Many of the new jobs are in software and information technology, as well as tech‐​related roles in logistics, finance and healthcare.

… Companies have struggled to hire all the talent they need, so many have dropped prequalifications like prior work experience or a four‐​year college degree.

… Alexis Ayala, 27, enjoyed the hustle of retail sales in his job at a cellphone shop in San Francisco before the pandemic. He had immigrated from Mexico as a toddler and, like his parents, didn’t go to college. … In January, Mr. Ayala started as a business development associate at Okta Inc., which provides tools that allow secure access to business applications. … By next year, he hopes to be promoted to account executive and make six figures selling software to corporate clients, well beyond the $80,000 he made in his best year of retail sales. … Okta said it removed college‐​degree requirements for a number of sales positions last year to cast a wider recruiting net.

… Many employers from International Business Machines Corp. to CVS Health Corp. now say they are happy to help relatively inexperienced new hires get trained up in coding, cybersecurity and healthcare technology to fill positions.

… After losing his Atlanta bartending job in March 2020, Zack Williams, now 36, took a landscape construction gig to tide him over. … Then in August 2020, he met a woman named Lindsey on a dating app. She worked at the Flatiron School, one of more than 110 coding boot camps that have sprung up around the U.S. over the past decade. … Mr. Williams was nervous at first about the intensity of the nine‐​month $15,000 program, but he said he took to it easily after completing his first project, constructing a digital tic‐​tac‐​toe game. Armed with a software engineering certificate, Mr. Williams started a new role in January as a software engineer at media company Gannett Co.

… In the Oliver Wyman poll, U.S. workers who described themselves as blue collar prepandemic said that enrolling in a specialized course or boot camp, or acquiring another credential, had unlocked new kinds of jobs in sectors such as tech, data processing, healthcare and electronics manufacturing.


Chris Edwards is the director of tax policy studies at Cato and editor of Down​siz​ing​Gov​ern​ment​.org.