I’m reading a new book by Harry Holzer and colleagues called “Where Are All the Good Jobs Going?” and it reminds me of the importance of moving beyond the averages and big-picture portraits and look between the folds.
Holzer is a labor economist at Georgetown whom I talked with a few weeks ago. He is often the counterweight voice in discussions that claim the job sector is hollowing out in the middle, creating a lot of high-end jobs and a lot of low-end jobs with very little in between (think barbell). Holzer finds some of that, but not as much as others claim. In fact, he finds a growing group of middle-tier jobs that require less than a four-year degree but some kind of training after high school. In his book, he goes into detail about how jobs have changed, with an eye toward those with the least education and experience.
Holzer and his team use a novel set of data (Longitudinal Employer-Household Dynamics) that categorizes workers by their education, work experience, race, gender, age, and whether one is an immigrant or native-born. They account for such intangibles as people skills, parents’ background, critical thinking skills, perseverance, and educational quality. They also are able to categorize a person based on whether the skill sets they have are valued in the workforce. A highly skilled blacksmith, for example, would be rated lower because we just don’t need that many blacksmiths.
On the other side of the supply and demand equation, they categorize firms by how well they pay (wages only, not benefits) and how progressive their human resource strategies are (such as whether they offer job training or career ladders). Then they examine the shifting fit between skills and wages. Doing this can tell us all sorts of things, like whether jobs for those with the least skills are disappearing and in what fields.
What did they find? Among other things, the areas that pay well that require some training after high school but not necessarily a BA have been growing, and include skilled crafts in construction (which Holzer believes will recover nicely after the recession), wholesale trade, as well as health care (nurses, technicians, and therapy assistants), administrative services, and public administration. Interestingly in manufacturing, those with the highest skills have hung onto the jobs and are well compensated for their skills, while those with more basic skills have lost jobs en masse, even more so in the recent recession. The industry, in other words, has shed its right-out-of-high-school jobs and are instead paying a wage premium to those with math and engineering skills that machinists or welders need in the new world of manufacturing.
Holzer also doesn’t discount the service sector, with some good retail jobs available, as well as service jobs in the financial services field. While most of the financial services jobs require more education, the field itself pays very well up and down the ranks. Low level clerical and mailroom jobs, in other words, pay well in these firms.
What I found interesting was the “between the folds” story of education and earnings capacity in chapter 2. Many with BAs and Master’s degrees do end up in a good position in the job market, but not everyone. For instance, about 20% of those with a professional (doctor, lawyer, engineer) or a doctoral degree still have earnings potential in the bottom two quintiles, as do about 30% of those with a BA. More than one-third of those with just a high school degree end up in the top two quintiles of pay premiums, as do more than one-fifth of high school dropouts. (Earnings capacity in this case is made up of in-demand skills, job experience, education, and other “good worker” attributes.)
Overall, up to 40% (!) of people are in lower or higher-paying jobs than their skills set and education along would predict. Wowza.
Thus, as they put it in the book,
While the level of educational attainment is certainly important–and has become more so over time–it is far from a perfect predictor of an individual’s long-term pay prospects. Variation in educational quality and cognitive, analytical, and communications skills accounts for large parts of the observed spread in pay…”
In other words, a four-year college degree (particularly one from an unknown or lower ranked university) is no guarantee of big earnings. It has to be backed up with personal drive and ambition, charm, and a classic work ethic as well as some good critical thinking skills and the ability to do some math.
Good workers tend to get good jobs. Period. I guess that’s not so surprising, but the bigger conversation that we regularly hear makes it sound that a BA is a golden key to a good job. It’s not. It certainly helps, but it has to be backed up with something more, especially today, in this highly, highly competitive workforce.
Given Richard Arum’s recent findings in “Academically Adrift” that colleges aren’t even imparting the critical thinking skills that jobs require, one wonders when the value of a BA will reach that tipping point where the average kid– the knuckleheads who don’t have that passion and drive that some of their peers possess in spades– should really question whether a BA is for him or her. Maybe getting some real work experience for a few years first, learning to say “yes boss” and to show up on time, would be a good strategy before applying to school. (Mary Quigley’s blog talks about the kinds of skills that get noticed on the job.)
Maybe looking to technical schools is a better option.
Not to discount the importance of the “marker” that a BA signals to employers, but if more kids with average skills from an average four-year school are going to be stuck in mid-level, insecure jobs while they have to pay back $40,000 or more in college loans, it does at least beg the question: why not go the cheaper route at least at first?
Later in the week I’m talking with one young woman who is telling the stories of kids who are doing just that. Stay tuned. I’ll also dig more deeply into Holzer’s book and tell you what he thinks of how we can do a better job of ensuring young people get off on the right foot in the job market.