Issue 390: 8 / 29 / 2011
Recession Widened Education Gap in Job Market
Reprinted from The Wall Street Journal.
Aug 12, 2011
By Justin Lahart
A college education pays big dividends in today’s job market. But it doesn’t always feel like that.
“I don’t know that I’d say it’s much of an advantage,” says Rachel Klemm, 25, of the degree she got from Western Michigan University in 2007.
After getting laid off as a graphic designer a year ago, she spent months looking for work before finding a job as an administrative assistant at a Grand Rapids, Mich. engineering firm. “It’s not really the kind of thing I want to be doing long term,” she says.
But while Labor Department figures show that workers with four-year college degrees face the toughest job market on record, for workers with less education, it’s been far tougher.
Last week’s jobs report showed that the unemployment rate for workers 25 and over with at least a bachelor’s degree was 4.3% in July, down from a September 2009 of high of 5%, but more than double the 2.1% registered when the recession started in December 2007. There are 2.5% more people with bachelor’s degrees working now than were working at the end of 2007 — the unemployment rate rose because the pool of college-educated workers expanded at an even faster rate.
Employment among workers with “some college” — those who either dropped out before getting their bachelors, or with associates degrees and the like — has fallen 3.8% since the end of 2007, raising the unemployment rate from 3.8% to 8.3%. For high school graduates, employment has fallen 7.8%, pushing the unemployment rate from 4.7% to 9.3%. And for workers with less than a high school degree, employment has fallen 12.2%, sending the unemployment rate from 7.7% to 15%.
The job gap between more- and less-educated workers has widened steadily over the past 40 years as technical change and offshoring placed huge competitive pressures on industries like manufacturing that traditionally employed workers that lacked a college education. But the recession intensified the process, says economist Adam Looney, a senior fellow at the Brookings Institute.
“Those forces went into overdrive,” he says “A lot of firms that were on the cusp of succumbing to them went under all at once.”
Moreover, many jobs that would in the past have gone to workers with less education are going to college graduates instead. David Gauger, head of San Francisco advertising agency Gauger + Associates, says he just hired an administrative assistant whose skills “go way beyond any other admin we’ve ever had.”
“She came not only with a college degree in business but she went back and got a degree in graphic web design and she knows 8 or 10 programs,” he adds.
When Southwest Tennessee Community College, in Memphis, Tenn., surveyed recent graduates in 2007, it found that 99% of them were working. In this year’s survey, that number slipped to 90%.
“We’re happy with that number frankly, for what’s happening in the economy,” says director career services Brenda Williams.
In the current job market, it can sometimes be difficult to convince students that what they’re doing is worthwhile, so Ms. Williams shows them statistics on how much better off people tend to be for getting a degree. Not only do workers with associate degrees have lower unemployment rates than workers who didn’t go beyond high school, Labor Department statistics show their weekly earnings were 23% higher in 2010.
“But I also try to be realistic with them about what’s going on in the job market, and use that as a motivation for them to do well in their classes,” she says.