What is labor market segmentation? Which groups of workers are most negatively affected by such segmentation? What can be done to reverse the trend toward greater labor market polarization?

Julie is a 30-year-old first-generation Filipina Canadian. She holds a Bachelor of Arts degree from a well- respected university yet has recently been forced to take a barista job at a local café. Use the human capital and labor market segmentation theories to analyze Julie's labor market position. Which perspective do you find more convincing? Why?

Answer:

1.

Labor market segmentation refers to the division of the market for labor into distinct settings. In these settings, work is found in different ways and workers have different characteristics. there is only a slim chance of moving from one setting to another. The Labor Market Segmentation Theory states that there is no single, open labor market. Instead, there are two distinct labor markets whereby better and worse jobs tend to be found in different settings. It emphasizes the barriers that limit access to the primary labor market and the ability of primary market participants to maintain their advantages

Women and visible minorities are most negatively affected by segmentation due to their difficulty accessing the primary labor market for jobs. Reversing the trend towards greater labor market polarization requires public policy encouraging higher education, anti-discrimination laws, and unions to protect workers.

2.

Human Capital Theory: a job's rewards are directly linked to its economic contribution to society. Workers compete in a single, open labor market where qualified individuals have equal access to opportunities and job information.

Julie should invest further in human capital by returning to school to get a better job and to escape her current underemployment situation. Labor Market Segmentation Theory: existence of two distinct labor markets: the primary and secondary markets. The primary market has better paying, safer jobs and with better career advancement opportunities. The secondary market has lower-paying, less secure jobs for unskilled or semi-skilled workers with little to no advancement opportunities

Julie's situation represents the growing secondary market and the difficulties she faces when trying to enter the primary labor market (being a female, visible minority) Both theories are true to an extent: It is likely that Julie has education/skills that are not desirable by primary labor market employers and so she should return to school in order to gain access to the primary labor market. 

References:

https://www.encyclopedia.com/social-sciences/dictionaries-thesauruses-pictures-and-press- releases/labour-market-segmentation

https://www.researchgate.net/publication/5192062_Labor_Market_Segmentation_Theory_Reconsideri ng_the_Evidence

https://www.jstor.org/stable/4225152

https://www.tandfonline.com/doi/pdf/10.1080/10301763.1989.10669066