Concept of Human Capital
The concept of human capital defines the quality of labor that makes different people earn different salaries within a given organization. Phillips defines human capital as a measure of the value of skills and competencies of an individual and that “the concept of human capital recognizes that not all labor is equal and that the quality of the employees can increase by investing in them” (84). According to Davenport, the worth of different employees can never be equal because of a number of factors (90).
One of the most common ways of determining the value of employees is by determining their levels of education. Investment in education helps in enhancing the quality of a workforce. Employers are looking for people who have the right knowledge in given fields. For instance, an employee who has taken an advanced degree in engineering may not have the same value to a holder of a diploma in the same field.
These two people have different capacities in terms of what they can handle in the fields of engineering. The more one advances a career through further education, the more he or she will become valuable to an employer. Another factor that helps in determining the value of an employee is their experience. Experience is a form of education that takes place in a workplace setting. According to Fitz-enz, the more time one takes in working in a given environment, the more one gets to understand the work environment (25).
Special skills and talents may also make an employer place a given value to an employee. According to Sims, the current workplace environment is very competitive, and employers are looking for imaginative workers who can develop new and unique concepts to address various issues (59).
Having unique skills or talents may help boost innovation within a firm. Davenport says that although education boosts innovativeness, people with minimal education can also be innovative in some perspectives (94). Having a combination of skills, talents, and education makes human capital very valuable. It makes workers be in a better position to understand various environmental forces in society. This way, they will know how to address them in order to ensure that an organization becomes successful.
Human Capital within the City of Scottsdale
According to Modiu, the city of Scottsdale is one of the fastest developing cities in the United States (78). This city is home to about 226,918 people, most of who stay within the city suburbs (Fitz-enz 28). This city has experienced tremendous growth over the past one-century following infrastructural development, especially in the last fifty years. According to Garoogian, most of the people who settled in this region before 1900 were farmers (37).
The climate and type of soil for this region were suitable for growing citrus fruit. However, there has been a consistent transformation in the economy of this city as it explores other sources of income. Currently, tourism is the main economic activity, although there are other major employers within the city. The research by Modiu ranks Scottsdale as one of the cities with the highest education attainments in the country (112).
According to Lang and LeFurgy, over 52% of the residents of this city have a degree or higher education attainments, because of the education policies and the attractiveness of the city to foreigners (53). Davenport says that one of the main reasons why the level of educational attainment of the residents is so high is that some of the people who come to this city as tourists sometimes consider immigrating into this region (20).
The social amenities and the climate in this city have attracted many immigrants, most of whom are professionals with advanced levels of education. The government has also invested a lot in the education sector. The number of schools in this city has increased massively over the last ten years. The government has been constructing and equipping several colleges to meet the increasing demands in education.
Human capital within this city is of great value, given that the number of people with advanced degrees in various fields is high. This explains why some of the best hospitals have established their branches within the city. Mayo Clinic is one of the top American clinics with three branches within the city.
According to Garoogian, the high number of regular visitors may be one of the reasons why these leading hospitals are concentrated in this region (98). The fact that most of the professionals who live in the city and are not willing to move to other cities may be another valid reason why they are setting up branches here. They are assured that these employees will be more willing to work for them when the facility is brought closer to their home.
Though the majority of the residents in this city have advanced levels of education, there are those who have minimal education qualifications. According to Garoogian, one of the main reasons for this is illegal immigration (93). A high number of immigrants have been coming from other parts of this country and neighboring countries in search of employment. They flood the booming service industry.
The unclear immigration policies in the country have made it difficult to deal with this issue. Some of the uneducated citizens in this region are natives who find no value in going to school. Most of them work in the agricultural sector that has become less attractive following the expansion of the service sector.
A section of human capital comes to this city only for a period before leaving for other places. According to Modiu, there are cases where professionals come to the city to address specific technical issues that are raising concerns (71). A clear example has been in the health sector.
Some specialized doctors would visit the top clinics upon request. This has been common at Mayo Clinic (Garoogian 51). In other cases, some of the human capital would come to work within the city while still on holidays. This is common among those who can work online.
According to Sirageldin, this special type of human capital is always ignored when evaluating the current workforce within a region (46). The reason for ignoring this segment of the human capital is the short duration that they intend to stay within the city. If they are factored in when evaluating the workforce of a given area, then they will give a false image because they will leave after a short period.
Poverty within the City of Scottsdale
According to Modiu, the city of Scottsdale is known for its massive wealth generated from the booming tourism industry, agriculture, and other service sectors (59). It has one of the highest human development index and per capita income in the United States.
The people hold the wealth in this state, and not the government. The country government and the leadership of this city have avoided any direct interference in the business sector. Government-owned business entities are very few as the leadership tries to attract investors into the city.
The economic prosperity of this city has been attributed to political policies and stability. The high level of education of most of its populace also means that they earn competitive incomes. Those with advanced degrees find it easy to get well paying white-collar jobs. One of the areas that show the wealth of this region is the value of the real estate. This city is home to some of the most expensive houses in the United States.
Garreau says that Scottsdale has become one of the cities with the most attractive real estate market within the United States, because of the growing tourism and other industries in the region (17). Even those working as casual laborers are well paid because of the strong labor laws that protect the interests of the employees. It is, therefore, very ironical that there are patches of poverty in such a region with massive economic prosperity.
According to Modiu, about 3.4% of families in this city live in abject poverty, hardly managing to meet their daily needs (75). This is a negligible number of people living below the poverty line given the fact that those below 18 years and over 65 years are included in this percentage. However, it is important to explain why they are living in poverty in a land that is full of opportunities.
According to Davenport, the main reason for this is illegal immigration (51). Some of those who come to this country illegally end up paying for pension plans that they cannot claim once they retire. Given the fact that they are illegal workers, they have no mandate to claim their pensions once they rich retirement age. This explains the reason why the number of aging people living in absolute poverty is on the rise in this city.
There are also cases where minors find their way into the country to look for jobs. They have no families to take care of them, and with strict laws prohibiting employment of minors in specific industries, these teenagers depend on informal jobs to earn their living. These two categories make the highest percentage of 5.9% of the people who live below the poverty line (Lang and LeFurgy 67).
However, another group of adults makes up this percentage of people living below the poverty line although they are in employment. This study will focus on this group in an attempt to explain why they live in poverty despite working in various companies.
According to the research by Marans and Stimson, the main reason why some people live below the poverty line despite being in their most active ages is the problem of limited or no education (76). Many organizations are currently looking for people with some form of education even when recruiting casual laborers.
They need a driver who will know the legal policies that guide transportation of the company’s products or raw materials, and they are willing to pay more for this. They also need a cleaner who is able to identify a bomb or any strange materials that may pose some form of threat to the organization. This makes it very challenging for those without education qualifications to get jobs. They are left to scavenge for any little job opportunity available.
When they get these casual jobs, the employers would underpay them, and because they do not know about their legal rights, they are forced to accept the payment. In most of the cases, the pay is hardly enough to meet their daily expenses, making it impossible to have any savings.
They end up leading hopeless lives where it is difficult to predict what the future holds for them. Fitz-Enz says that the quality of labor has a direct relationship with the quality of lifestyle of a person (36). Even in a region of economic prosperity as the city of Scottsdale, without formal education, special skills, or talents, one would lead an impoverished life.
Different Levels of Education and Urban Poverty within the City of Scottsdale
Baron and Armstrong say that the level of education has direct impacts on the level of income that one has in terms of salaries (73). However, it is important to note that different professions have different remunerations based on the industry in which one is employed. Software engineering and medical professions are some of the best paying professions even for the holder of the first degree.
It is possible for a holder of bachelors’ degree in software engineering to earn a higher income as compared to a holder of masters’ degree in psychology depending on the employer. Gaquin notes that in order to survive in most of the cities in the United States, a degree and experience is very critical (41). It is with the degree certificate that one will be able to convince the employer that he or she has the capacity to handle a given task.
This explains why urban poverty within the city of Scottsdale majorly affects those who lack the basic education levels required by the employers. Partridge and Rickman say that over 95% of those who live in absolute poverty in Scottsdale has no college certificate (56). Most of them are high school dropouts with no specific skills that can earn them employment in various industries in the country. They rely on the service sector that is expanding rapidly.
However, this sector also requires professionals, and that is why they struggle to maintain steady jobs. This has resulted in a group of active people who live in poverty because they lack the value desired by employers hence they remain unemployed or underemployed.
Underemployment among the illegal semi-literate immigrants has created a class of people living in absolute poverty. As Rich, Giles, and Stern observe, their condition is always worsened when they retire (131). Most of them always have no savings, and they are not entitled to pensions enjoyed by their peers who were legally employed.
Concentrated Levels of Human Capital Over Three Decades
According to Gaquin, the influx of immigrants into the city of Scottsdale over the past five decades has resulted in concentrated levels of human capital (29). Both skilled and unskilled labor comes to this city from various other states because of the rapid development of the service sector.
They are not only attracted to the perceived availability of jobs, but also to the lifestyle in this city. Lang and LeFurgy say that the development of the entertainment sector within the city has attracted white-collar youths from all over the country (43).
The nightclubs and other entertainment joints are not only attracting the old and middle-aged Americans, but also young adults. As these white-collar style-conscious set of youths come to spend their holidays here, another section comes to the city to serve them. This increase in population within the city has had mixed results in terms of wealth creation.
A section of the society, which includes the wealthy business owners and highly skilled labor have highly benefited financially from this influx. The businesspersons have the opportunity to dictate terms of employment because of the high concentration of the human capital. This means that terms of employment, especially remunerations, remains in favor of the employer. Only highly skilled and talented employees can have their voices heard when it comes to negotiating salaries.
On the other hand, the ill-skilled, less talented employees find themselves in awkward situations where they have to contend with poor payments and unfavorable working conditions. As Becker notes, while the concentration of human capital has been benefiting the rich, it has caused more suffering to the poor who are forced to fight for the limited employment opportunities (42). This is what has been taking place in the city of Scottsdale over the past decades.
Works Cited
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