A Training Shortfall: New Report Shows that America's Workforce Is Not Prepared for Tomorrow's Jobs

College Campus

Living in the 'College Economy'

The job market may be tough for new college grads right now, but at least they have one advantage: a degree. According to a new report by Georgetown's Center on Education and the Workforce (CEW), 63% of all U.S. jobs will require at least some postsecondary education by 2018. That means that employers will need 22 million workers with a college degree - and at the country's current rate of educational attainment, we'll fall short by a staggering three million.

This is particularly bad news for an economy that's still struggling to recover from a serious recession. Jobs are scarce right now, and the CEW report predicts that they won't fully recover until 2015. When they do, we won't be prepared - to fully meet the demands of the growing workforce, colleges would have to increase the number of degrees they confer by 10% annually, or an additional 300,000 graduates per year. That's a pretty overwhelming challenge for institutions that are already crushed by shrinking budgets and overcrowded classrooms. But if we don't catch up, the report warns, more and more jobs will simply go overseas.

Job Projections 2018 Figure 5 from Georgetown CEW

From Help Wanted: Projections of Jobs and Education Requirements Through 2018, page 5.

Everybody's heard it - today's college degree is yesterday's high school diploma. Over the past several decades, it's become increasingly difficult to climb the career ladder without a postsecondary degree. The CEW reports that the proportion of U.S. jobs requiring at least some college education climbed from 28% to 59% between 1973 and 2008. The organization predicts that that number will keep climbing over the next decade, making it difficult to even get in at entry-level without some college education.

Their analysis found that nine out of ten workers who have a high school diploma or less are limited to three main occupational industries: food and personal services, sales and office support and 'blue collar' jobs, such as factory labor. Most careers in these areas already pay less than other fields, and their wages are in decline. As a result, college education has effectively become the prerequisite for access to the middle class - in 1970, only 26% of the middle class had postsecondary training. In 2007, 61% of the middle class had at least some college education. In today's economy postsecondary training is essential for economic mobility. The CEW's report warns that, at the current rate of educational attainment in the U.S., 60 million Americans are at risk of being 'locked out of the middle class.'

In fact, almost all of the fastest growing industries and occupations require some postsecondary education. The following industries will provide 40% of all jobs in 2018, and 75-90% of jobs in these areas will require a college degree:

  • Information Services
  • Private Education Services
  • Government and Public Education Services
  • Financial Services
  • Professional and Business Services
  • Healthcare Services

Furthermore, about 90% of the jobs in four of the five fastest-growing 'occupational clusters' require postsecondary education:

  • Healthcare Professional and Technical Occupations
  • Science, Math, Engineering and Technology (STEM) Occupations
  • Community Services and Arts Occupations
  • Education Occupations

Apple iPod MP3 Player

Today's Worker: The Specialist

The CEW's report points to the integration of computers into the modern workplace as the root of the reduction in lower-level jobs. Computers automate many repetitive tasks, eliminating an entire category of support jobs. The remaining jobs tend to be professional or managerial and require advanced training that, in most cases, can only be acquired through postsecondary education.

And it's not just low-level office workers who are disappearing. The U.S. economy has become far less reliant on production. As a result, many manufacturing jobs are disappearing overseas or simply becoming devalued. The CEW uses the extremely popular iPod as an example of a 'post-industrial product' - less than 20% of the value in the manufacture of audio and video equipment in the U.S. comes from those who are actually doing the manufacturing. By contrast, roughly 80% comes from the skilled workers who design, finance and market these products, as well as those who manage global production and distribution. For most companies, this makes for simple math: The people who add more value get paid higher salaries, while the workforce that adds less value gets continually reduced in order to maximize efficiency and profit.

Because specialized training is required for so many jobs, the very nature of the American career is changing. Gone are the days when someone would start in a company at the bottom rung and climb to an executive office - career pathways are now found within occupations, not industries. Today's professionals acquire both general skills and highly specific training through postsecondary education and then progress through an occupational hierarchy. For some that means staying in one industry (healthcare occupations, for example, tend to be closely tied to the industry), but most occupations allow for movement across a broad range of fields. This mobility is important since even some new industries have limited hiring potential. However, occupation-based career pathways make it even harder for people who lack education to compete, even if they have experience in the field.

Of course, specialized training has its drawbacks. Recent research has shown that many employers feel that over-specialization has led recent college graduates to be less employable. They've sacrificed fundamental skills such as critical analysis and 'thinking on your feet' in exchange for highly specific training that only prepares them for one type of workplace.

Technology Professional

Nevertheless, students are well-advised to carefully consider their prospective careers when choosing a college major. While any education is better than no education, it's ultimately your training, and therefore occupation, that will determine your earning potential - not your degree level. The CEW found that 27% of people with postsecondary certificates and 31% of people with associate's degrees earn more than the average individual with a bachelor's degree. And bachelor's degree holders in Managerial and Professional Office and STEM jobs earn more than those with graduate degrees in fields like Education, Community Services and the Arts. Ultimately, the fields that offer the greatest financial rewards for higher education are STEM and Managerial and Professional Occupations.

Of course, money isn't everything, and many individuals will find themselves just as happy in a lower-earning career that they enjoy. But even in the lower range of the salary scale, almost all professional careers over the next decade will require some college education. And if American colleges and universities don't find some way to drastically increase the number of college graduates, our labor market will find itself sorely underprepared.

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