June 14, 1999

Rural areas must develop a labor force with the skills and flexibility demanded by modern employers, a report from USDA shows. The earnings premium for skilled over less skilled workers is increasing, and that is a concern for rural areas that tend to attract relatively few skilled jobs.

The mix of white collar "nonproduction workers," or managers and professionals, and less skilled blue-collar production workers in manufacturing has stabilized during the 1990s, the reports notes. But salaries and wages for white collar workers have increased faster than wages for blue collar workers.

"Competition from low-cost foreign competitors may have played a role in this divergence by inducing manufacturers to hold down production worker wages and move operations to nonunion plants," the report says. "At the same time, many companies cut back on the number of middle managers in the early 1990s which may have boosted average white collar wages." It seems clear that the "earnings premium for skilled over less-skilled workers is increasing."

For rural communities, the implications include the demand to develop a labor force with the skills and flexibility that modern employers demand. "Higher productivity, obtained through technical knowledge and ability, good work attitude, and skills in teamwork and problem solving can enhance rural business competitiveness not only in international markets but also in the vast domestic market," the report says.