Characteristics of a highly skilled labor market
As with the labor resources of ordinary workers, the accumulation of knowledge and techniques takes time. However, the labor resources of skilled workers have their own unique characteristics.
- 1 Scarcity. Knowledge and technique are not innate. On the contrary, these traits are acquired through continuous study. The process is not easy, and becoming a highly skilled employee requires certain characteristics, education investment, and a long period of learning. The development of such resources also requires the willingness of the individual, persistence, and perseverance. Not everyone can develop such characteristics. Meanwhile, time is limited, and capital stock does not have long-term cumulative properties. Therefore, those who can master substantial knowledge and skills account for only a small proportion of the total population, which implies that highly skilled individuals are scarce market resources.
- 2 Individual ownership. Individuals are the natural carriers of knowledge and skills. Knowledge and skills cannot play their roles without carriers; therefore, the ownership of knowledge and skills belongs only to workers.
Although highly skilled workers acquire knowledge and skills through study, there is a difference in the knowledge and skills that each person accumulates. The knowledge accumulated in the development process is extensive, and it is not possible for anyone to obtain all knowledge and skills. Each individual behavioral agent can only master knowledge in one area due to limited time and energy. Therefore, specialization in a specific area is the best description of highly skilled labor. Each skilled individual can only display technical expertise in a particular industry or field. Moreover, resource heterogeneity implies that it is not possible to compare different behavioral agents or for them to replace each other. Therefore, even if there are many highly skilled individuals in the market, there will not be enough competition, and a monopoly will be the inevitable consequence due to differences in resources.
- 3 Implicitness. Skilled labor differs from physical resources because it is intangible. In the market, only the effects of resource owners’ behavior can be observed, but the quantity of and difference among the owners cannot be judged by observation. The implicitness of skilled labor resource creates blind spots when the demand side evaluates the resource. If they cannot prove the quality and quantity of the resources to hand, owners are unlikely to be acknowledged by their employers. Although educational level is often used as justification of a person’s capability, this method is subjective. Therefore, individuals who recently attained degrees cannot receive higher wages nor share the surplus of a firm. Only through experience can the ability to efficiently create value be proved.
- 4 Cumulative in nature. The production and consumption of physical resources are two separate processes and both cause resources to decrease over time. However, the resource of highly skilled labor does not follow this pattern since the production and consumption of such resources are combined. Over time, the quantity of the resource is increasing as experience accumulates. For this reason, labor resources are continuously growing in the production process along with the corresponding power.
- 5 Difficult to measure. Skills and techniques cannot be separated from the production process. However, due to the characteristics of highly skilled labor, it is difficult to calculate to what extent labor affects production. The measurement of the contribution of highly skilled labor to production has always been a challenge for economic studies, and employers and workers cannot reach agreement on the contributions. Consequently, there is room for negotiation on the interest distribution between the two parties.