Job Rationing, Human Capital, and Normative Behavior: An Example from Oregon's Wood-Products Industry

Abstract

John A. Young is Assistant Professor of Anthropology and Research Associate in the Western Rural Development Center at Oregon State University. Joe B. Stevens is Associate Professor of Agricultural and Resource Economics at Oregon State University. The authors wish to acknowledge the contribution to this paper made by William Pierson, who assisted in data collection act/vit/'es. Valuable cornments on an earlier draft of the paper were received from Jerry Moles, Jan Newton, Margaret Simeral, and Harland Padfield. Support for research and completion of the paper was provided by the Western Rural Development Center, Oregon Agricultural Experiment Station (Technical Paper No. 4294; Regional Research Project W-118), and Grant No. GA SS 7404 from the Rockefeller Foundation. A NTHROPOLOGICAL AND ECONOMIC PERSPECTIVES are combined in this study to examine some social consequences of an impending reduction of job opportunities in Oregon's wood-products industry. The primary concern is with the externalized consequences (to individual workers and to society) of the behavior (albeit rational or irrational) of firms as they deal with surplus labor. Although the existence of surplus labor is commonly regarded by the firm as an opportunity to select workers who are in some sense best, the existence of unemployed and underemployed workers does constitute a social problem in a broader context. During 1972, the 71,000 wood-products jobs in Oregon were held by 110,000 different workers (Stevens et al. 1975). In other words, the number of workers in this industry exceeded the number of jobs by 56%, compared to a 30% figure for all other forms of employment in the state. The ratio of workers to jobs in this case is likely to increase in the future, as the number of wood-products jobs available in Oregon is projected to decline by 45070 by the year 2000 (Wall 1973). From the point of view of the worker, the hiring decisions of employers constitute job rationing, i.e., the allocation of scarce jobs among individuals who belong to a pool of surplus labor. Workers seeking to change jobs within the industry as well as those desiring to enter the industry for the first time will be affected by the hiring decisions of employers. The questions of primary importance are: What worker attributes d o employers consider important in the hiring process? What are the attributes of workers who are not likely to be hired and thereby face future difficulty in maintaining their economic viability? What possible longterm social consequences can be identified as resulting from the rationing of jobs in a labor market where opportunities are becoming increasingly scarce? The following account of the job-rationing process in Oregon's wood-products industry is based on interviews with personnel managers and unemployed wood-products workers. The degree of agreement among managers, among workers, and between managers and workers is measured to separate idiosyncratic judgments from those that are shared. The perceptions of both groups are then checked for accuracy against statistical analyses of records of actual hirings by several firms. Important worker attributes are identified and the circumstances of workers are then assessed in light of their perceptions of these attributes.