Tag Archives: Harry Holzer

Landing “good” jobs requires more than just a degree

Posted on May 2, 2011 | 2 Comments

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.

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Generation Recession–peering 10 years into the future looks pretty dim

Posted on January 5, 2011 | 1 Comment

In the several interviews I’ve now done for the book, the conversation has generally hewed to kids living at home and why that’s a good thing. We’ve talked about how it leads to a more secure future when kids have the space, literally and figuratively, to create a good foundation with education or training, and the time to figure out how to get on a good escalator in the workforce. We’ve talked about parents’ role in this period–the valuable resources they provide in offering that launching pad.

We’ve also talked about the many, many young adults who are trying to play by the old rulebook and trying to reach “adulthood” on the same time-table as their parents did. Those kids are more often than not treading water at risk of sinking, because today’s world is a lot different from when their parents were 20. The stakes are higher all around today– in jobs, in education demands, and in many other areas of life as well. It’s (sadly) easier to dig yourself into a hole, and much harder to get out.

So it was sobering to read in this issue of Democracy the prognosis of leading labor force experts for the next ten years, and by default for this generation. Things have only gotten worse since we published “Not Quite Adults,” and it makes me worry that the ranks of the “treaders” is going to grow even larger (and include many more college grads).

Here’s Thea Lee of the AFL-CIO on what life might look like in 2021:

Ten years from now, the trauma of the Great Recession will still be with a lot of workers. We’ll have permanent scars of long-term unemployment…We worry about a “lost generation,” young people coming into the labor force right now and finding they don’t have jobs. There might be a several-year period of excessively high unemployment or underemployment where their skills are underutilized.

She goes on to warn that the pillars of recovery have been seriously eroded. Consumption, that tried-and-true growth engine? Nope, we consumers are maxed out. Investment? The private sector is in lock-down because we consumers have no money. Exports? Too many others (like Germany) are far ahead of us in that game. Innovation? We lack the basics. We are sinking in education, we don’t invest in training, and our infrastructure is crumbling.

The result for this crop of 20-somethings just entering the workforce? Here’s Sherle Schwenninger of the New America Foundation:

There will also be a new form of generation conflict because a lot of baby boomers aren’t going to vacate jobs that 25-year-olds normally would get…They will be hanging onto their jobs as long as possible. This will create a bottleneck for generational mobility, affecting the employment prospects of new entrants into the labor market.

Even the college-educated will feel the reverberations of this enduring pain, as Harry Holzer, an economist at Georgetown, notes:

“My fear is that all of them [workers with low, middle, and high levels of education] will live, if not with more inequality, certainly with more insecurity over time. Even if we recover from this downturn…if you have a college diploma, it’s growing increasingly clear that that’s no longer the kind of guarantor of a decent standard of living (though it’s better to have one than not to have one) or of job stability. People at all levels will feel more insecurity, and the public sector will provide less of a safety net.

One man on a comment board recently complained that Not Quite Adults was just one big excuse for a coddled generation. Claiming that “times change,” he ranted, is a liberal cop-out. What’s really at fault, he said, is bad parenting and spoiled children. Well, if there was ever a refute, the three comments above are it. It is not coddled kids or bad parenting that is preventing young people from launching their adult lives. Times had already changed when we wrote Not Quite Adults. Jobs had become less secure. Education was in higher demand. Americans were increasingly left on their own to fashion their personal safety net in a do-it-yourself economy. But now, all those changes have been exacerbated beyond imagination–and it is this generation that will bear the brunt.

When we focus too much on personal blame and finger-pointing, we shift our focus away from the real issues, in this case the huge social forces –from globalization, technology, political disinvestments in education and R&D, changing social conventions –that have altered the playing field. Times do change. And we must respond to those changes and not try to recreate a nostalgic “golden era” of growing up.

This generation faces a tough road ahead. We need to start thinking about how to make that path to adulthood smoother and more secure, for everyone. Parents cannot continue to bear the full responsibility of the after-effects of these profound social changes–the latest being the long-lasting recession.

As Harry Holzer suggested, a good place to start is to invest in improving worker education and skills along with the quality of jobs–perhaps with an employer tax credit to spur on-the-job training. It also means revamping education policy. Education policy cannot be only about raising test scores. It must be about preparing a generation for viable work, and retraining people for the skills we will need in the future. As he says, it’s not about getting more people into college. It’s more about making sure they finish college, whether that be two-year or four-year colleges. It’s also about making paths to good-paying middle-tier jobs more visible earlier on in life. It’s also about helping kids discover their interests and strengths, even if those interests are not as lofty as we as parents had hoped. When kids follow their interest, whether that be into neuroscience, engineering, or mechanics or phlebotomy, they will more likely love what they do. If they love what they do, they will do a good job at it. And that, alone, is something to be proud of.

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17 million Americans with college degrees are doing jobs that don’t require a BA

Posted on November 23, 2010 | 1 Comment

“A college grad walks into a bar….”  Well, actually, the joke should probably start “A priest walks into a bar and is served a drink by a college grad….” After all, one in six bartenders has a college degree. Order some food, and you’ll probably be served by a college grad.

In his blog over at the Chronicle of Higher Education, Richard Vedder has done some tallying up of the Bureau of Labor Statistics data and finds this little nugget:

Over 317,000 waiters and waitresses have college degrees (over 8,000 of them have doctoral or professional degrees), along with over 80,000 bartenders, and over 18,000 parking lot attendants. All told, some 17,000,000 Americans with college degrees are doing jobs that the BLS says require less than the skill levels associated with a bachelor’s degree.

Yep, you can be feel pretty good that you spent $25,000 to park that Hummer.

Of course, much of this is a result of the current recession, and some of it is the age-old result of just not being sure what you want to do with your life. But with the cost of college creeping ever upwards, and the numbers dropping out with a bill but no degree rising as well, it does raise the question: should everyone go to college?

We’ve been demanding a BA for some time now as an entree into the work world, largely because, if you ask me, it’s the lazy way of winnowing out applicants. A BA certainly doesn’t convey expertise in the subject matter, unless you’re a historian or opening a philosophy shoppe. (The exception of course is in the professional schools, like engineering, law, medicine). College was designed to teach young people how to think and how to ask good questions–as well as giving them four years to mature. (Those are important skills, don’t get me wrong. Critical thinking is absolutely king.) But over time a BA has become a commodity, in exchange for which you (hopefully) get a job. The message we tell kids is, “go to college if you want to get a good job.”

Kids have heard that message loud and clear. Most kids aspire to college. And many enroll. They do so on the wing and a prayer that if they finish, they’ll earn a lot more than would a person who goes to trade school.

And, if they’re average or above average, they’re right.  The return to college is, on average, quite large.  But there’s a distinction that is often overlooked in this assumption (myself included). The high returns we read about are average returns.  So on average a student with a BA earns much more over a lifetime than the typical person with just some college, or a certificate, or just a high school degree.

But within the folds of that typical story are stories like the bartender and janitor and the flight attendant. Perhaps the bartender wasn’t ready for college, or perhaps he just didn’t have the smarts to hack it. No shame in that. This isn’t Lake Wobegon after all where every child is above average. Yet, he went to college because he heard the message that it was the only way to earn a decent living and have a stable life (college as a commodity again). But that’s not always true. He might not be average. If he’s below average, his return might just be below average as well. He might not have a shot at the high-end job that his dorm-mate had–the straight A kid from an elite high school with well-off and highly educated parents. Instead, he might land in a middle management job. Still a decent job, but not the six-figure salary his roomie is making. And yet he doesn’t pay any less for that degree. Thus, his “return” is less.

Those are the realities of college today, and while it is true that college still pays, it is something that every parent should think about when helping to choose a college. It’s a tough call, because you don’t want to unnecessarily crimp your child’s future, and who knows, he or she may blossom in college. But if a young person has done ok but not spectacularly in high school, if she’s not that interested in Thucydides, maybe he or she could blossom just as easily at a less-expensive state school instead of a pricey private school. Or maybe he could find his happiness as a landscape designer, or a radiologist, or an EMT.

Young people today need to know the odds of their success in a four-year college. If they’re in the bottom ranks of their high school class, they need to be told they have only a 20% chance of getting a BA.  And more important–they need to have clear, viable other options. They’re out there. We just need to work harder to make those options apparent and the path to them swift and successful.

When asked in a recent Heartland Monitor Poll whether a four-year degree is a ticket to the middle class, only 46% of young people aged 18 to 29 with a BA or still in college said yes. That’s a serious crack in the dike on the education front.

We’ve been ignoring the story of those less sexy, but decent paying “middle tier” jobs. While some economists say that the workforce now looks like a barbell–with jobs concentrated at the high end, demanding a lot of cognitive skills, or the low end, with dismal pay and no job security. These economists argue then that we should be spurring kids on to four-year colleges to sharpen those cognitive skills, so they won’t end up at the other end, forever scrambling to just keep their head above water.

But Georgetown labor economist Harry Holzer and the Urban Institute’s Robert Lerman argue otherwise. In a recent Brookings Institution paper, “The Future of Middle-Skill Jobs,”  they use Bureau of Labor projections to determine where the jobs will be.

Overall, we conclude that the demand for middle-skill workers will remain quite robust relative to its supply, especially in key sectors of the economy. Accordingly, accommodating these demands will require increased U.S. investment in high-quality education and training in the middle as well as the top of the skill distribution

Indeed, of the 30 jobs projected to grow at the fastest rate in the next decade, only seven require a BA.

I’ve heard from too many young adults who struggle in college or who wonder why they are now fighting for a job as a cashier or a bartender (with a college debt hanging over their head) when they were promised better. And they were. We promised them that. So let’s change this message that college is for all, and let’s give kids real alternatives.

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Status update on young adults and recession

Posted on October 29, 2010 | Leave a comment

Spoiler alert: Pop some prozac. This post will be a downer.

Unemployment is hanging tough at 14.8% for those age 20-24. It’s 10% for those 25-34. No wonder nearly half of young adults aged 18-24 were living with their parents in 2009. (Unemployment, of course, is not the only reason. In fact, there’s been a 50% increase since 1970 in living at home even for the older group, age 25-34. In a word: changing “norms.”) But I digress.

The real news today is the job market and its lingering effect on the ability of this generation to grab the horns of adulthood, and ultimately, achieve that quintessential goal of us all, to live the American Dream: a house in the burbs, kids in good schools, a good job that pays enough to take a vacation every year, splurge now and then, and bank enough for a secure retirement.  In other words, a standard of living equal to –and preferably better than–their parents’.

But is the American Dream at risk for a generation? Seven in ten adults surveyed recently said that young people starting in their career today will not have as much success as they did. Six in ten think they won’t  see better standard of living.  Ask Millennials themselves, and half believe they will not recover in their careers.

They’re probably right. Young adults (particularly men and women with just a HS degree) have been living through about four decades of stagnant or declining wages. In 1970, male high school graduates earned about 64 cents for every dollar earned by the male college graduates. By 2008, this had fallen to 42 cents. (and we talk about the gender gap!)

While the decline in wages is disturbing, even more alarming is the fact that large numbers of these young men are throwing in the towel and dropping out of the workforce entirely. In 2008, even before the recession sunk in, only 70% of young men age 25-34 with just a high school degree or less were working when the survey team visited. That’s a lot of idle young men in their prime working years. And lest you think this group with just a high school degree is a small one, it’s not. Fully 60% of the US workforce has a high school degree or less. Shocking, huh? As I’ve said before, a lot of young people aspire to college, even enroll. But far too many drop out and never get a degree of any kind.

University of Michigan economist Sheldon Danziger calls the number of men who have thrown in the towel and aren’t working,  “the most troubling trend of the last 40 years.” Harry Holzer, a Georgetown labor economist, testified before Congress in May, also about the alarming figures. It’s not only that they’re not working, but should they keep trying to return to the workforce, they’re going to find it hard to do.  As Holzer told Congress, long-term unemployment erodes workers’ skills, especially if their jobs had been permanently eliminated and they need to shift to new sectors.

Check this chart out, put together for me by Sheldon Danziger and his grad students in economics at University of Michigan.

These less-educated workers are scarred by a recession, but the pain has been coming on strong for a while. The recession was the final nail in the coffin for many.

As a nation, we’re feeling adrift, paddling alone today as the twin effects of a staggering recession and a long-term shift toward a “do-it-yourself” workforce join together like strands of DNA. Our  youngest workers, just getting started in their careers, are suffering as they work more for less. They’re fighting a tight labor market with older workers staying put longer, which makes it even harder to get a foot in the door. It’s very easy to get discouraged when everyone says you need experience to land the job, and the experience you’re up against is a worker with 15 or 20 years under their belt. Many young people are turning reluctantly to part-time work, which pays even less and offers few, if any, benefits. During the recession, young adults were the most likely to be working part-time involuntarily among all age groups.

Whatever burst of optimism we might have felt last spring is dashed, according to the latest Heartland Monitor Poll. We know now just how long this slog will be. Consumer confidence is where it was in the winter of 1975, when oil prices were shocking us for the first time. Jobs are going to be scarce for a while. Cash and loans are going to be hard to come by. Credit cards are being cut off. How are young people going to get started in life? There’s going to be a big group of people who will remain on the sidelines for a long time to come. In the end, all this is a recipe for sustained political volatility (“volatility” is probably the understatement of the year given the hi-jinks going on out there on the political front).

So in the immortal words of Bette Davis, fasten your seat belts. It’s going to be a bumpy ride.

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The kids aren’t alright

Posted on March 5, 2010 | Leave a comment

Unemployment numbers are in once again, and it seems employers have quit firing but haven’t quite resumed hiring yet. In this economy, we’ll take every bit of incremental progress we can take I suppose. But most economists say we’re in for high unemployment for several more years.

We hear a lot about joblessness and housing woes — and rightly so. People are hurting. But lost in this conversation is a fundamentally more sobering statistic: child poverty.

(I know, most people on Friday offer funny little games or humorous group-blogging feats. Not me: Friday is “social science” day! While I’m not a social scientist–as I was haughtily reminded by my coauthor– I do play one on tv.)

I just finished a project called Illinois KidsCount. It’s part of the national KidsCount books put out by the Annie E. Casey Foundation. Every year, states tally up all the indicators of child well-being, like poverty, health, education, crime, etc. The goal is to keep tabs on how we’re doing as a nation in supporting our children.

And today, times are tough for everyone, but especially kids. In Illinois, which is a state that has both rural areas and big cities and so is pretty representative of the nation as a whole, 17% of children are in poverty–and that was in 2008, the latest data available. Most experts think that today, about 19-20% of kids nationally are in poverty in the state, and the tally is climbing.

I’ll remind you what poverty is these days: for a family of four (mom, dad, two kids, it means living on about $22,000 a year. A year!) Median rent in Cook County is $880 a month. That’s about 40% of the budget right there.

I can bombard with statistics all day. But it’s the personal stories of poverty that get to me. I interviewed a group of women on the West Side of Chicago back in September of last year.  They all were part of a neighborhood organization, COFI, that works to better their community, mainly so their children can lead better lives.

A woman’s husband had been working 60-70 hours a week for $8.40 an hour in a paper factory prior to the recession.  His boss recently cut his hours back to 32 a week. Between rent, gas, and the electric bill, the mother of four says,  “it’s too much for us.”  Quietly, she tells me she feels she is a burden to her family. The medications and frequent doctor’s visits for her heart condition are draining their budget. Her husband, she says, basically hands over his check to pay for her condition. At night, she lays awake worrying but tries to hide her fears from family, not wanting to burden them again.

Another mother in her early thirties says that after paying the utilities and rent, it’s hard to keep a gallon of milk in the refrigerator. She was worried what the winter would be like, hoping they could manage to keep the heat on. Another’s husband works only three days a week now, and they have a hard time paying for the CTA bus, which her son must take everyday to school. He often goes without lunch money. Many teens, in fact, want to drop out of school and go to work to help their families.  A woman confesses they are behind three months in the rent since her husband lost his job.  They fear they and their four children will be evicted soon. Another mother who works in a bread factory had her hours steadily pared back until she was recently laid off. The gas is cut off, the house is cold, and she says, they cannot get it turned back on because they have too many back-payments due. Another young mother recently decided to stop taking her medicine for diabetes to save money.

Note– these mothers are all married and their husbands are working.

Most are too proud to turn to the government. “A lot of people have pride,” says one woman, “and they don’t ask for help. But we have pride for all the wrong reasons.”

You can see how poverty grinds you down. For children, it has long-lasting effects in ways both big and small. When families are poor, they struggle to put food on the table and pay the rent. The strain is palpable. Tempers flare, stress undermines parenting. Health declines. The jobs poor families take often have crazy hours, at night, on weekends; an afternoon shift this week, and evening shift next. It makes finding child care nearly impossible. Dora, a mother that a researcher I know interviewed, had to rely on her 10-year-old to care for the toddler while Dora worked. Needless to say, hot dogs for dinner and the 10-year-old wasn’t doing any of her schoolwork. Another married mother, Tamar, whom Kathy Newman interviewed in The Missing Class, would leave early in the morning to take two busses across town to work for roughly minimum wage. At the end of the day, she’d flop in her chair too exhausted to do much of anything. Her son Omar meanwhile was out getting into trouble. (all this is in a book I ghosted called “Mothers’ Work and Children’s Lives (W.E. Upjohn Press).

One thing is certain: poverty in childhood has lasting effects. Children who grow up in poverty do less well in school (and more often drop out completely). As a result, they struggle in the job market later in life. They have more health and mental health problems as children and as adults. Greg Duncan and Harry Holzer, two economists who focus on low-income families, estimate that child poverty costs this country $500 billion a year, or about 4% of our GDP. That’s the toll from poorer health, later imprisonment, higher public assistance costs, and other long-term effects.

The most sobering statistic in my mind is the fact that, based on the patterns in past recessions, child poverty will likely rise to a whopping 24% by 2012 and hang tight above 22% for at least another five years after that.

One in four children living on less than $20,000 a year in the land of plenty is shameful. And costly. (and don’t get me started on the huge divides by race. Ok, too late: nearly four in ten (!) black kids in Illinois were in poverty in 2008). Let that one sink in. And we wonder why our public schools struggle.

The answers you ask? Better wages, unionization to advocate for better benefits and pay, clearer routes from high school to work for kids who are not college-bound, and I’m afraid to say it, higher taxes this year, at least in Illinois. We have a budget deficit that is the size of four major public programs combined. We can’t slash services for the families I interviewed, cut them off completely. We just can’t. The long-term costs are simply too high. And the personal costs to a child’s life are not something I want on my conscience just so I can save a couple hundred dollars on my tax bill. I can sacrifice a couple meals out at nice restaurants to cover that higher tax bill.

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