Economists use the terms skilled and unskilled labour to refer to two different types of possible employees as well as two different types of labour market. The term "unskilled labour" is not used as extensively in economics as it once was, in recognition of the fact that skill is a continuum rather than something a worker does or does not possess.
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Skilled workers come to a job with a particular set of technical or professional knowledge. This may be the result of formal education or derive from an apprenticeship or similar training. These workers are valuable to employers because of the skills and experience they bring with them. Examples of skilled workers include carpenters, mechanics, electricians, computer programmers and technicians of all kinds. Skilled workers have historically been organised into guilds or craft unions.
By contrast, unskilled workers lack any specific job-related education. They may receive training on the job, but it is often specific to the company. Knowledge of company products or procedures, for instance, is important for many jobs, but isn't usually transferable from one employer to another. Occupations that are typically considered unskilled include warehouse employees, agricultural labourers, customer service representatives, receptionists, retail clerks, cleaners and many types of food service worker.
One reason for the decline in use of the term "unskilled" to describe the second set of workers comes from the fact that they may in fact have relevant skills which are either not easily measured or come from sources other than traditional education. For instance, professional cleaners often apply skills learned in the home rather than in a school. Similarly, "soft" interpersonal skills may be very useful in fields such as sales.
Skilled and unskilled workers perform very differently economically. In most cases, skilled labour has a significant economic advantage: unskilled workers typically earn less than their skilled counterparts and are at higher risk of unemployment. In some cases, unskilled workers may find that increasing automation in an industry reduces the demand for unskilled labour. Skilled workers may sometimes be at a similar risk -- the demand for coopers, wheelwrights and chandlers has declined dramatically over the last few centuries, for instance -- but are usually more insulated against this type of problem.
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