The New York Times had an interesting and informative editorial this week, “College, Jobs and Inequality.” It highlights several important issues facing our nation: the fact that even people with college degrees are having a difficult time finding a job in today’s economy, the urgent need for our economy to create and sustain good-paying jobs and the need for a skilled workforce in today’s competitive global economy.
Here’s from the editorial:
Searching for solace in bleak unemployment numbers, policy makers and commentators often cite the relatively low joblessness among college graduates, which is currently 5.1 percent compared with 10 percent for high school graduates and an overall jobless rate of 9.8 percent. Ben Bernanke, the chairman of the Federal Reserve, cited the data recently on “60 Minutes” to make the point that “educational differences” are a root cause of income inequality.
A college education is better than no college education and correlates with higher pay. But as a cure for unemployment or as a way to narrow the chasm between the rich and everyone else, “more college” is a too-easy answer. Over the past year, for example, the unemployment rate for college grads under age 25 has averaged 9.2 percent, up from 8.8 percent a year earlier and 5.8 percent in the first year of the recession that began in December 2007. That means recent grads have about the same level of unemployment as the general population. It also suggests that many employed recent grads may be doing work that doesn’t require a college degree.
Even more disturbing, there is no guarantee that unemployed or underemployed college grads will move into much better jobs as conditions improve. Early bouts of joblessness, or starting in a lower-level job with lower pay, can mean lower levels of career attainment and earnings over a lifetime.Graduates who have been out of work or underemployed in the downturn may also find themselves at a competitive disadvantage with freshly minted college graduates as the economy improves.
When it comes to income inequality, college-educated workers make more than noncollege-educated ones. But higher pay for college grads cannot explain the profound inequality in the United States. The latest installment of the groundbreaking work on income inequality by the economists Thomas Piketty and Emmanuel Saez shows that the richest 1 percent of American households — those making more than $370,000 a year — received 21 percent of total income in 2008. That was slightly below the highs of the bubble years but still among the highest percentages since the Roaring Twenties.
The top 10 percent — those making more than $110,000 — received 48 percent of total income, leaving 52 percent for the bottom 90 percent. Where are college-educated workers? Their median pay has basically stagnated for the past 10 years, at roughly $72,000 a year for men and $52,000 a year for women.
Several major issues and challenges in all of this. Here are two:
- We are not creating and sustaining enough jobs — especially those that pay well and offer career opportunities.
- Baby Boomers are not exiting the workforce en masse as predicted. Here’s from an article in USA Today, “American workforce growing grayer“:
The number of people 55 and older holding jobs is on track to hit a record 28 million in 2010 while young people increasingly are squeezed out of the labor market, a USA TODAY analysis finds.
The portion of people ages 16-24 in the labor market is at the lowest level since the government began keeping track in 1948, falling from 66% in 2000 to 55% this year. There are 17 million in that age group who are employed, the fewest since 1971 when the population was much smaller.
Yet despite these statistics, having a postsecondary degree or other credential with market value is important today and will be even more so in the years ahead.
In fact, as Sara Toland wrote in a recent Corporate Voices’ blog post, many employers have jobs that they are trying to fill. According to a recent NPR segment Employers Pickier About Job Applicants Skills, employers want their future employees to be educated, trained and ready to work.
Glenn Cook, director of staffing, at Boeing, says,
What we really want to do is hire people with experience so they can hit the ground running and help us out immediately.
Potential workers are getting rejected because, despite their extensive experience, they do not have a college degree or a postsecondary credential. Georgetown University Center on Education and the Workforce reported the demand for new college degrees will fall short by 3 million postsecondary degrees by 2018.
This education skills gap is a crisis affecting individuals, families, communities, businesses and the national economy.
Learn and earn initiatives are one crucial strategy for addressing the skills gaps that are hindering workers and businesses.
Through the support of the Bill & Melinda Gates Foundation, Corporate Voices for Working Families has compiled a series of micro-business case studies highlighting employers who are establishing learn and earn partnerships. These employers, who include Expeditors, CVS Caremark, and Bison Gear and Engineering Corporation, are collaborating to provide working learners with the opportunity to pursue postsecondary credentials while simultaneously working and earning a living.
Corporate Voices believes that when business and industry partner with education to create opportunities for individuals to advance academically and along career pathways, business, education and students can all reach their goals. As reported in the recently released “From an “Ill-Prepared” to a Well-Prepared Workforce: The Shared Imperatives for Employers and Community Colleges to Collaborate,” through collaboration:
- Individuals will be supported and encouraged to complete postsecondary credentials essential to obtaining or growing into employment with family-sustaining wages.
- Businesses will gain skilled, work-ready talent.
- Education will be more closely matched to labor market demands, and businesses will support the college completion agenda.
Partnerships between business and education are essential to improving the lives of working families. Corporate Voices, through its workforce readiness platform, will continue to highlight industry leaders, to participate in research design and to educate policy makers, all in an effort to help explain the challenges and opportunities around the education and skills gap facing our country today. Corporate Voices invites employers who might have a learn and earn model to be highlighted and/or would like to join the Learn and Earn Business Leader Team to explore peer to peer learning of promising practices, to contact us.