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Skilled Labor Vs. Unskilled Labor

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Labor is one of the three most important parts of the free-market economic system. Proper labor strategies ensure that businesses can produce goods at the lowest possible cost and earn a solid share of potential market share. Two types of labor exist in all economies: skilled and unskilled. Understanding the types of labor helps managers run successful companies and produce efficient goods.

Skilled Labor

Skilled labor is the portion of workers that have specific, technical industry skills relating to business and the production of goods. Engineers, welders, accountants and scientists are a few examples of skilled labor. These individuals bring specialized skill sets to the marketplace and are essential in advancing industries through developing new techniques or methods of productions.


Although skilled workers are more expensive than other workers in the market, they provide tremendous value to companies willing to employ them. Skilled workers can improve many different processes in a company depending on their expertise. Skilled workers can improve production processes, financial reporting and research and development.These improvements can create a strong competitive edge for businesses and push inefficient producers from the market.

Unskilled Labor

Unskilled labor is the cheaper and less technical portion of the workforce that makes up a large part of an economy’s labor market. This workforce plays the important part of performing daily production tasks that do not require technical abilities. Menial and repetitive tasks are the common tasks of unskilled labor; some unskilled labor tasks may include customer-service positions that help consumers when purchasing goods from a company.


Unskilled labor is an inexpensive way for businesses to accomplish their production or service goals without raising consumer costs. Front-line jobs for many companies are not technical or demanding, so unskilled workers can complete the tasks with little or no formal education of the positions. While unskilled labor is inexpensive, it is not cheap; most individuals must earn a living wage when working for a company.

Best Uses

Many successful companies use a mixed-labor strategy. Some skilled workers are necessary to improve business operations and develop market strategies for maintaining market share. Unskilled labor performs the daily operations of a company and produces the goods or services when production is similar.Paying too little for this labor market will create inefficient company processes and increase consumer costs.

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