Occupations in the sub-baccalaureate labor market have been affected by several organizational and technological trends: the shift to firms with flatter hierarchies with greater responsibilities for individual workers; the ubiquity of computer applications; and the slow and uneven pace of technological innovation, which often requires workers to be capable in various production processes. Educational institutions have responded with increases in computer-related courses and with total quality management (TQM) as a reflection of the expanded responsibilities production-level employees now have. These changes also mean that the conventional occupational divisions are blurring and that certain capacities--communication skills, initiative and motivation, and problem-solving abilities--are increasingly important.
The sub-baccalaureate labor market is plagued with cyclical variation. Employment opportunities vary substantially over the business cycle, and the intermittent employment undermines incentives to accumulate extensive training and experience. Enrollments in community colleges and technical institutes also expand substantially during downturns, increasing the numbers of students just at a time when there is little demand for graduates.
A third characteristic of the sub-baccalaureate labor market is that it is almost entirely local. Firms search for their employees locally and informally, and individuals search for work locally; community colleges, technical institutes, and area vocational schools orient their programs almost entirely to local employers. The only exceptions arise in cases of severe local labor shortages or when an employer has established a close relationship with a particular nonlocal educational provider. The local nature of these markets may make adjustments to changing labor demand slower and less certain.
Entry into the sub-baccalaureate labor market seems to be dominated by small firms; those in search of better positions move to larger firms or perhaps to more sophisticated middle-sized firms. The providers of education and training are also small in the sense that at a particular time there are relatively few completers in any one occupational area. The fact that both demand and supply are dominated by small institutions may thwart the development of the information necessary for markets to operate efficiently.
Not surprisingly, there are notable differences among local labor markets. Frankton, with its origins in agriculture and processing, is technically much less sophisticated than Palmdale and Cotooli, for example. The dominance of high-tech development and manufacture in Palmdale has affected its economy much more than the diversified economy of Rosefield. The high costs in Palmdale and the relative isolation of Frankton have caused somewhat idiosyncratic problems in attracting well-trained workers. However, the commonalities across different communities in the characteristics of sub-baccalaureate labor markets are more striking and allow us to generalize based on these four case studies.