Is Bilingualism Values in the U.S. Labor Market?

January 2004

By Nancy R. Lockwood, SPHR, HR Content Expert

The article, “The Value of Bilingualism in the U.S. Labor Market,” published in the October 2003 issue of Industrial and Labor Relations Review, describes the first study in the United States to consider the wages of bilingual workers versus those of workers who speak only English. While the research literature shows substantial labor market payoffs for foreign workers who speak English, there is no research regarding the payoff for workers with both English and foreign language skills. Consequently, this study covers new territory regarding the value of bilingualism in the United States.

How the Study was Conducted
The study was based on the 1992 National Adult Literacy Survey (NALS). The 1992 NALS was selected because it offered the most recent U.S. data of salary for bilingual workers. Approximately 26,000 adults were interviewed in person by interviewers who spoke either English only, or both English and Spanish.

The survey asked detailed questions regarding language proficiency, reading and writing materials used, and language habits. By definition, bilingual workers know a foreign language “well” or “very well.” (However, the 1992 NALS only included people who learned to speak a second language—in addition to English—in their formative years, i.e., before beginning their formal education.)

Key Findings
The authors stated that they did not find strong evidence overall that the U.S. labor market highly values second language skills. Yet at the same time, the study revealed that second language skills could increase earnings in particular geographic areas and in certain occupations. The study indicated mixed results regarding the value of bilingualism in the U.S. labor market:

1. Nationally, 14 percent of people speak a language at home in addition to English.

2. The nominal wages of bilingual workers exceed those of their monolingual peers.

3. When considering human capital characteristics of employees, bilingual skills do not lead to a statistically significant contribution to weekly wages.

Geographic Concentration of Second Language Speakers
The study measured whether certain states have a high level of second language speaking employees:

1. In 12 states, the proportion of second language speakers exceeds the national average of 14 percent.

2. New Mexico is the state with the greatest concentration of second language speakers—nearly 36 percent .

3. Bilingual workers are more likely than their English monolingual counterparts to be born abroad.

4. Bilingual workers are more likely to live in metropolitan areas and tend to live on the West Coast or the Northeast of the United States.

Education Level
Education level is a key aspect that differentiates English monolingual workers and bilingual workers. Bilingual workers tend to have education levels at one of two extremes. Compared with monolinguals, bilingual workers either are less likely to have completed high school or more likely to have completed at least a bachelor’s degree.

Wage Payoffs of Bilingualism
Using 1990 and 1992 data, the study compared the weekly wages of English monolingual and bilingual male workers. All together, the sample had 7,921 male workers between ages 18 and 64. Each worker had a positive weekly wage and was proficient in English and/or a foreign language.

• Bilingual workers earn slightly more than English monolingual workers.

• Among Hispanics, however, there appears to be no gain associated with being bilingual.

• The average earnings of immigrant bilingual workers substantially exceed those of their English monolingual counterparts.

• Within racial/ethnic groups, bilingualism is associated with much higher wages among Asian and Pacific Islanders and non-Hispanic whites than among other groups.

Research Limitations
The research study had a number of limitations:

• Due to the 1992 study’s sample size, it was not possible to investigate the determinants of wages for detailed occupations.

• The 1992 study had a narrow sample group because it eliminated people who learned languages after starting their formal education.

• Although the wage equations accounted for 11 major occupations that covered all employees, there was no major occupational category with second language skills that showed a statistically significant impact on wage earnings.

Commentary by the Authors
The authors acknowledged that while English is the predominant language used in the United States, employees who have multiple language skills can probably expect to have an earning advantage as well as provide their employers with a competitive advantage in a global economy. In fact, the authors noted that it is conceivable there may be significant premiums for foreign language skills within certain occupations and labor market sectors (e.g., educators, executives in multicultural corporations, foreign service officers in the U.S. State Department).

At the same time, the authors stated that they do not believe the data and their analysis would reveal different conclusions using data that reflect the current U.S. labor market. Consequently, they believe that the overarching key finding would remain the same, namely there is no strong evidence that the U.S. labor market values bilingualism.

SHRM HR Content Insights
From the vantage point of January 2004, when considering the study findings described above, they are noteworthy in view of the increased need for greater intercultural understanding in today’s world, and in the United States, the growing demand for foreign language skills, particularly proficiency in less commonly known languages (e.g., Arabic, Chinese). However, it should be acknowledged that this study is based on data that are more than a decade old and include only workers who acquired their foreign language skills prior to their formal education.

Taking a broader look at the use of foreign language skills in the U.S. labor market, there is an increasing need for foreign language skills in certain parts of the nation where the workforce tends to be bilingual. For instance, this would include regions where there are significant Hispanic populations (e.g., a city -- New York City -- and states -- California, New Mexico, Arizona, Texas, Florida).

In today’s labor market, U.S. companies are beginning to market their firms to Hispanic groups (e.g., positions that require considerable contact in the marketplace with the Hispanic population), such as business development and community outreach. For example, in the health care industry in New York City, staff—both employees and management—is often required to speak Spanish. With the increasing emphasis placed on employee relations and diversity in the human resource field, HR professionals who can communicate in more than one language and understand languages spoken in their workplace will be well positioned to better solve workplace conflict and address organizational change.

Taking a broader human resource perspective, companies in the United States are increasingly becoming global with a cross-cultural workforce at home and abroad. Gardenswartz and Rowe, authorities in diversity, explain that frustrations of not being able to communicate with another have to do with power, control and influence. They feel strongly that being monolingual can be a detriment in today’s world. As pointed out in Developing the Global Organization, leaders who work in the global arena will be more successful if they have foreign language competencies, and thus are better able to relate to their workforce. Although English is the international language of business, and most global leaders are not expected to be fluent in a number of languages, even the minimal use of a foreign language can yield significant levels of respect, trust and loyalty. Finally, as noted in International Human Resource Management: Managing People in a Multinational Context, the use of language skills -- domestically and overseas -- can be critical regarding task performance and cultural adjustment.

Looking to the future, the U.S. labor market can no longer afford to be strictly monolingual or ethnocentric in its viewpoint and skills. Global competition will continue to increase, and companies who can bridge the cultural gaps through language skills will have a critical advantage in the marketplace.

Sources:
Dowling, P. J., Welch, D. E., & Schuler, R. S. (1999). International human resource management: Managing people in a multinational context. Cincinnati, OH: South-Western College Publishing.

Fry, R., & Lowell, B. L. (2003, October). The value of bilingualism in the U.S. labor market. Industrial and Labor Relations Review, 57, 1, 128-140.

Gardenswartz, L., & Rowe, A. (2003, May). Understanding issues around multiple language usage in the workplace. Mosaics, 9, 2, 3-4. Alexandria, VA: Society for Human Resource Management.

Moran, R. T., Harris, P. R., & Stripp, W. G. (1993). Developing the global organization: Strategies for human resource professionals. New York: Gulf Publishing Company.

http://www.shrm.org/research/translations_published/Is%20Billingualism%20
Valued%20in%20the%20U.S.%20Labor%20Market.asp