Media Contact: Dr. Mike Walden, 919.515.4671 or firstname.lastname@example.org
By Dr. Mike Walden
North Carolina Cooperative Extension
Some may call me geeky, or others may just call me strange, but I like to read academic reports. My standard excuse is, “Someone has to read them!” When my wife sees me curled up with the latest 100-page version, she just shakes her head and says, “You’ll be asleep soon.” But to me, the reports are almost as fun as the latest John Grisham thriller. Well, not quite.
Anyway, I just finished three great reports that focus on the jobs of the future and the education needed for those jobs. With the condition of today’s economy, these are reports that have important information and wide interest. Let me summarize the key findings from them and let you decide what conclusions can be drawn about improving the job market.
The first report is by the McKinsey Global Institute, an international consulting firm that focuses on economic and business issues. They paint a challenging picture of today’s job situation. Over the next decade, the national economy will have to create 21 million jobs to return the unemployment rate to 5 percent by 2020. Unfortunately, at the rate the country has been creating jobs in the last decade, we’ll only get halfway there.
One of the issues the McKinsey folks find — and we’ve heard this many times before — is a growing mismatch between the skills of available workers and the skills needed by firms. If businesses can’t find workers with the right skills and training for their jobs, then the jobs won’t be created, will be shipped to a foreign country or will be replaced by technology or machinery.
According to McKinsey, the country is creating too many workers with a high school diploma or less and too few workers with some college (but no degree) or a college degree. Specifically, they estimate a shortage of 3 million workers with a college degree or some college by 2020, but a surplus of over 6 million workers with a high school degree or less in that same year. The message: we need to accelerate our educational training.
The second report, from The North Carolina Commission on Workforce Development, echoes much of what the McKinsey report says, but for North Carolina. Training requirements for jobs — particularly good-paying jobs — are increasing. Jobs in the past that paid solid middle-income salaries for workers with only high school degrees are rapidly disappearing. Over the next 10 years, employment for workers with college degrees in North Carolina is forecast to grow twice as fast as jobs for workers with high school degrees or less.
So the take-away message from these two reports might be, go to college in order to get a job. Certainly this is an important message. Indeed, today’s unemployment rate for workers who have a college degree is about half that for workers without that higher education diploma.
However, stopping here would miss some other important messages that are brought to us by the third recent report I read, from Harvard University. Although the Harvard report agrees with everything stated in the McKinsey and North Carolina reports, it puts their conclusions in context with some important qualifications.
First, while the jobs of the future requiring a college education are increasing, still, over one-third of the jobs in the nation and almost half of those in North Carolina in 2020 will need a high school degree or less.
Second, while we constantly shout to both students and parents that education is crucial to their economic future, statistics show we have a problem with this message being followed. Nationally, almost half of college students don’t finish on time in four years, and a high proportion leave college without a degree. In the 1970s the U.S. was first among industrialized countries in high school graduation rate; today we’re 13th.
The Harvard study concludes that a significant number of students don’t see the connection between what they learn in school and specific jobs in the workplace. In fact, at the high school level, Harvard says there may be too much emphasis on directing students to go to college (again, this is Harvard University talking). This lack of a “learn-job” connection can lead to dropouts in both high school and college.
One solution, Harvard says, is a renewed focus on vocational and technical education as early as the junior year of high school. Europe has been doing this for decades. Of course, care must be taken to make sure all students have time to explore their talents and interests before committing to a track that can limit their future job opportunities.
But Harvard sees three advantages to a broader vocational/technical track in high school. First, it should reduce the high school dropout rate. Second, it should also reduce the college dropout rate if more students who enter college have the interest and desire for academic training. And third, it should provide more job seekers with the skills and training in demand by employers for the millions of jobs that will continue to be open for high school graduates.
The condition of the job market is the top issue in the country today, and it will likely continue to be for several years down the road. Step one in solving the jobs crisis is making sure workers have the skills needed by employers. You decide if we need a different approach to this goal. And by the way, happy reading if you also decide to read the three reports!
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Dr. Mike Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide column every two weeks. Previous columns are available at http://www.cals.ncsu.edu/agcomm/news-center/tag/you-decide
Related audio files are at http://www.cals.ncsu.edu/agcomm/news-center/category/economic-perspective/