Reports from the Economic Front

a blog by Marty Hart-Landsberg

Problematic US Labor Market Trends

It seems like everyone talks about the importance of education to our economy.  Unfortunately, the US business community, the people our politicians call the “job creators,” doesn’t seem to care.  To be blunt: they continue to create jobs that don’t require higher education skills.

The US Bureau of Labor Statistics regularly does employment projections.  The table below shows their recent projection for the 15 fastest growing occupations over the next decade in terms of numbers of workers.  The list accounts for more than a third of all projected labor growth.

job growth

As you can see eight of the fifteen require “no formal educational credential.”  One requires only a high school diploma. Just four require a bachelor’s degree.  Only four have an annual wage above the median.

Doug Henwood, who blogs at LBO news, summarized the educational requirements for the entire projected labor force as follows:

Just over half, 51%, require no more than a high school diploma for entry, and another 14% some post-high school education short of a bachelor’s.  Just 35% require a bachelor’s, and 9% an advanced degree.  The educational distribution of the workforce will change little from today.  For example, 25.6% of today’s jobs require a bachelor’s or more for entry; in a decade, that will rise 0.6 point to a dizzying 26.2%.  Today 63.6% of jobs require no more than a high school diploma; in 2004, that will plummet by 0.8 point to 62.8%.

education

To be clear, these are the educational requirements associated with the jobs to be created according to Bureau projections.  Nothing says that growing numbers of jobs requiring only a high school diploma won’t be filled by college educated workers.  In fact, the Wall Street Journal highlights the growing possibility of just such a trend:

Underemployment—skilled workers doing jobs that don’t require their level of education—has been one of the hallmarks of the [current] slow recovery. By some measures, nearly half of employed college graduates are in jobs that don’t traditionally require a college degree.

Economists have generally assumed the problem was temporary: As the economy improved, companies would need more highly educated employees. But in a [2013] paper released by the National Bureau of Economic Research, a team of Canadian economists argues that the U.S. faces a longer-term problem.

They found that unlike the 1990s, when companies needed hundreds of thousands of skilled workers to develop, build and install high-tech systems—everything from corporate intranets to manufacturing robots—demand for such skills has fallen in recent years, even as young people continued to flock to programs that taught them. . . .

[U]sing Labor Department data, Mr. Beaudry and his coauthors found that demand for college-level occupations—primarily managers, professionals and technical workers—peaked as a share of the workforce in about 2000, just as the dot-com bubble was about to burst, and then began to decline. The supply of such workers, meanwhile, continued to grow through the 2000s. The subsequent housing boom helped mask the problem by creating artificially high demand for workers of all kinds, but only temporarily.

While it is impossible to know the future course of the economy, projected trends are far from worker-friendly.

 

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