Eyes Wide Open: Pulling Back the Curtain on Jobs and Education

January 7, 2013

by Dr. Watson Scott Swail, President & CEO, Educational Policy Institute

Back in 2005, I wrote a piece for the Bill & Melinda Gates Foundation titled Is More Better? The Impact of Postsecondary Education on the Economic and Social Well-Being of American Society. The report concluded that college graduates receive higher wages, are more likely to be employed, and when unemployed, likely to find new jobs faster. As well, graduates receive social returns to education, including increased life expectancy and better general health, improved quality of life for self and offspring and increased social status. The report concludes that higher education can best serve the nation by targeting low-income and other historically-underrepresented groups. This remains true today.

However, the report also documented, using Bureau of Labor Statistics (BLS) data, the largest and fastest growing jobs in America. This was perhaps the most interesting—and most ignored—piece of the policy report, because it showed that many, if not most, of the largest and fastest growth jobs did not require postsecondary credentials.

Recently in the Chronicle of Higher Education (January 3, 2013), journalist Eric Kelderman reported that state governments are likely to keep higher education as a top priority. “A majority of states are now committed to increasing their percentage of college graduates so their citizens will be better able to compete in the global market, where most jobs being created will require some post-secondary education.” This has been the rejoinder of almost all politicians and most policy scientists. But is it true?

After reading the Chronicle piece, I thought it would be interesting to review the latest BLS data. For those of you who wish to review all the extant data from BLS regarding employment, go to http://www.bls.gov/emp/ep_table_107.htm. You will find your mother lode there.

The data I analyzed in 2005 and the new data are basically the same. There is quite a lot of data, so any summation depends largely on what data is being analyzed, and, of course, how. It is possible to come to more than one conclusion, and bias can certainly play a hand. I state this at the outset. But the basic trends cannot be understated: most of the job growth in America will not require a substantial amount of postsecondary education, and certainly not anything including a BA or beyond.

Most analysis focuses on the fastest job growth. That is, the largest percentage of growth between now and somewhere in the future. This is useful, but it is completely imprudent if we do not consider the size of this growth. For instance, the fastest job growth, measured at 70 percent increase between 2010 and 2020 by BLS, is for “personal care aides.” That occupation also has very large growth in terms of actual jobs, with 675,000 new or replacement jobs required by 2020 out of 54 million. That is significant in both analyses. But these positions require high school or less for employment. Perhaps a better example is that of biomedical engineers, which will require an increase of 62 percent over current employment. That is significant, but only accounts for about 9,700 jobs over the next decade. So be wary of reports that talk ONLY of fastest growth by percent.

LARGEST JOB GROWTH IN NUMBERS OF JOBS

In 2010, there were 143 million people in the US workforce. By 2020, this is projected to rise to 164 million, or an increase of 21 million jobs (14.3 percent). Adding on standard attrition due mostly to retirement (aging out), the US economy will require approximately 54 million new/replacement jobs, understanding that 33 million jobs will be replacement and 21 million new. This assumes that some replacement jobs will likely be for repurposing, meaning that the previous job will evolve in to something slightly or completely different. Regardless, 54 million jobs amounts to 37 percent of today’s workforce by 2020. This is significant.

Of those 54 million jobs, about 26 to percent will require an associate’s degree or higher. Only 5 percent will require a master’s or doctoral degree, 16 percent bachelor’s, and five percent associates (Exhibit 1). If we tack on a postsecondary credential that is a non-degree award (e.g., certificate), we get to 30 percent. As Exhibit 1 illustrates, over two thirds of new jobs by 2020 require either a high school diploma or less. For those analysts and critics that want to suggest that the economy in 30 or 40 years will require more, well, we have no possible idea of what we will need then because we don’t know what the economy, and certainly the economic and social conditions, will look like.

Exhibit 1. Distribution of new jobs by typical educational credential needed, 2010-2020.

Microsoft Word - Exhibit1.docx

Exhibit 2. Distribution of BLS job types by education requirements, 2010

Degree Requirements of Job Types

Total

%

High school diploma or equivalent

350

47%

Bachelor’s degree

154

21%

Less than high school

96

13%

Associate’s degree

47

6%

Postsecondary non-degree award

42

6%

Master’s degree

29

4%

Doctoral or professional degree

25

3%

Some college, no degree

6

1%

Grand Total

749

100%

Exhibit 3 illustrates the top 25 growth jobs, by number, between 2010 and 2020. The full table, available here, provides data on 749 job “titles.” Of those 749 jobs listed by BLS, a full 60 percent, or 504 job titles, require a high school diploma or less, 21 percent a BA, 6 percent an associates degree, and 7 percent an advanced degree.

Exhibit 3 provides some real interesting information about the largest projected job growth in the United States between 2010 and 2020. Of the top 10 jobs with the highest expected “new” openings by 2020, only one requires any postsecondary education: a registered nurse with an associate’s degree. Of the top 25 positions, equivalent to over 20 million jobs and representing almost 40 percent of all new and replacement jobs by 2020, only 4 require any postsecondary at all, of which 3 require a BA or higher. Arguably, we can surmise that truck drivers require a credential, but a Class A commercial truck driving license involves 144 hours of training, equivalent to 3-4 weeks, certainly not a BA, nor an AA, nor even a nine-month certificate.

Reviewing the table, the top growth positions include retail sales (1.96 million), cashiers (1.78 million), waiters/waitresses (1.32 million), registered nurses (1.21 million), and food preparation (1.15 million). We have to drill down to the 14th spot on the list to get to “postsecondary teachers” for our first postsecondary credential, and then to the 16th spot for “elementary school teachers.” Otherwise, these 20 million new and replacement jobs focus largely on health care aids and other workers that simply do not need a postsecondary credential.

This stated, many employers still require a postsecondary credential for many of these jobs, not because the credential is necessary, but because this is the simplest way to filter people out of the selection funnel. Why hire a personal care aid with a high school diploma when someone with an associate’s or bachelor’s degree will do the same job at the same pay? This is a serious problem with the US economy, and the suggestion that we need more postsecondary credentials is biased completely by they way we, as employers, choose to filter out new employees.

FASTEST GROWTH BY PERCENTAGE OF JOBS

Exhibit 4 illustrates the fastest growth, by percentage, of jobs between 2010 and 2020. These are the 25 fastest growing jobs in the US, but unlike Exhibit 3, only represent approximately 10 percent of the new jobs over the course of this decade. This is important to understand. As stated before, growth by percentage is important, but growth by number is ultimately the most significant factor for an economy.

Thirteen of these 25 jobs do require postsecondary education, and 8 require a minimum of a BA. The jobs in this Exhibit that require some form of postsecondary education account for less than one quarter of the job growth represented on this chart and only 2.5 percent of all new job growth projected by 2020.

The top 10 of this list provides an interesting look at the future: Personal Care Aides, Home Health Aides, Brickmasons, Carpenters, Veterinary Technologists, Rebar Workers, Physical Therapist Assistants, Plumbers, Pipefitters, and Meeting, Convention, and Event Planners. Jobs that, for the most part, are recession proof, but require very little postsecondary study.

CONCLUSION

So what does this all mean? To me, it means we need to take a much more careful look at the labor data and not swallow other analysis that suggest we need massive increases in degrees and certificates. Unless the BLS data system is extremely flawed, and I do not believe it is, we have as much higher education as we need for the next 10 years, and arguably longer.

However, policymakers and analysts are pushing families to incur massive amounts of debt to send their children to associates and bachelors programs, followed more and more by graduate programs. This is a tricky situation, because we don’t want the government or anyone else to get in the business of suggesting who should get a degree and who should not. Individuals, and families, should be the primary decision maker. But with this great push from philanthropies, governments, and politicians, families are scared into doing what they will always do: anything for their kids.

But at what cost?

This brief analysis obviously doesn’t match job openings with the postsecondary pipeline, such as engineers, accountants, et cetera. That would be the next step to equate overall need. But this discussion should make apparent that the rhetoric is simply beyond the pale regarding the global economic needs and the role of higher education. We must be much more pragmatic in our education policy, especially with the huge cost to taxpayers and individuals.

Exhibit3

Exhibit4

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About Educational Policy Institute

The Educational Policy Institute is a Washington, DC-based research think tank on education and the social sciences. EPI conducts evaluation and policy studies on various educational issues from Pre-K to workforce outcomes in the United States, Canada, and beyond. Visit us at educationalpolicy.org.
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6 Responses to Eyes Wide Open: Pulling Back the Curtain on Jobs and Education

  1. Very interesting article. I would, however, caution against reading too much into this particular data set: the “Typical education needed for entry” column does not in my view accurately reflect what level of education is truly needed to obtain a position in the real world, regardless of what is stated by an employer on a job posting (which, if I may be cynical for an instant, is often done to reduce the salary offered to the successful candidate) or even what might be required in any objective sense. In my personal experience, I have rarely applied for positions that did not receive over 100 applications. Not all applicants are equal, of course, but such numbers can easily allow an employer to hire someone with a PhD and over ten years’ relevant experience, when all they were asking for (and prepared to pay for…) was someone with an MA and a few years experience (this is a fictional example, of course… or maybe not).

    • Good point, but yours makes mine: yes, there are lots of people who are “overqualified” for positions. I see it almost every day in my work. It isn’t because the position demands the excellent, but because employers use it as filters. One must separate competency and credentialism.

      So my point is made: employers filter out using higher and higher credentials because so many people who have them are underemployed.

      • On the point of “credentialism,” I could not agree more: the fact of having a degree (even one that is more specialised than, say, an MBA) is in no way a guarantee of competence, even at a basic level. Having said this, should we then tell people not to bother with a university degree because they can probably get a decent job right away without one? Is less university education actually a good thing on a personal and social basis? Instead, might we not want to reinforce the good old liberal arts education which, in spite of its perceived flaws, can actually teach people the rudiments of writing and critical thought? Aside from the individual and social benefits, surely these two qualities are useful for any good employer (we’ll leave out the very many bad ones out of this for the time being)? In fact, with a few exceptions like doctors, engineers and the like, should we not do away entirely with “professional” degrees and focus on developing minds, not professional competencies (which, it seems, can only be done on the job, so to speak).

      • This is the crux; we are asking people to pay unbelievable gobs of money for something that “may” help them, and “may” is determined by the rhetoric that it is important, if not critical, to have a postsecondary degree. This is the total American way: amp it all up to the detriment of most. The haves will always have advantage. They have it from their prior schooling which leads to better schooling, better spouses, better jobs. For the majority of Americans, they are left trying to get to the same levels, and parents in great fear that they cannot possibly do enough for their children. At what cost? We just aren’t doing a good job by scaring people to get more when they don’t really need more. But that is the cycle we have created, and it is very problematic. TO MY POINT: if it is so important, then the government has a responsibility to provide an avenue that is no or low cost. Otherwise, they are seriously deteriorating the retirement and debt burdens and parents and students.

      • On the issue of student and parent debt, I could not agree with you more that state and federal governments in the United States are not doing enough to ensure that education – especially higher education – is affordable and within reach for all. Things are better in that regard here in Canada, but raising tuition rates combined with our absurdly high housing prices (especially in Metro Vancouver) are almost wiping out this advantage for us. My only concern in this case is that my past personal experience in government tells me that civil servants and especially elected officials tend to follow the path of least effort: if they are told that the working force is over-educated, they will simply cut funding for university education, instead of trying to figure out a way to make the system more affordable and relevant to economic, social and individual needs.

        Be that as it may, I have probably taken up more of your time than I should have. Thank you for writing this piece – you have provided some thoughtful insights on the question. I hope it will lead to more discussions and maybe even some positive change!

  2. Pingback: Free College Tuition? Not So Quick, Mr. President | The Swail Letter on Higher Education

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