Wake Up to the New Economy

Sunday, September 24, 2017
Kathleen Mathers

For a majority of Americans in the 20th Century, the route to economic and career success was simple and direct: graduate from high school and find a blue-collar job or clerical role that provided stable employment and paid good wages. For today’s students, that predictable, reliable sequence no longer holds true. The economy has changed; college has changed; and career opportunities have changed. It’s time to wake up to the new economy.

The chances of a high school graduate reaching the middle class without any additional education or training are near zero. For example, after the Great Recession, 99% of all new jobs created required some postsecondary education and training but not necessarily a 4-year degree. We have to move past the vision of college as 18-year old full-time bachelor’s seeking students. That is not the case today, and has not been the case for at least a generation. Forty percent of all students enrolled in postsecondary education do so at a 2-year college, and that number continues to rise.

Technology and globalization have changed the labor market, making more room for skilled, technical, postsecondary-level workers and less room for others. Car mechanics have become computer technicians; assembly line workers have become high-tech operators; and programmers have become the backbone of our economic infrastructure.  In fact, American manufacturers now post more jobs for software developers than production workers. This shift is reflected in workers’ wages as well. Overall, 30% of associate degree holders out earn the average individual with a bachelor’s degree. Success in the workforce clearly necessitates a postsecondary credential with labor market value, just not a specific 4-year degree.

Despite these shifts, our policy and advocacy approaches have not caught up to the present reality of the economy, jobs, or postsecondary education. For the past three years, Education Strategy Group has worked with states, districts, and national organizations to help change this reality. We believe there are three steps that all communities should take to wake up to the new economy and open doors to economic prosperity for all youth and adults.

Use labor market information to identify and scale high-quality career pathways

As the Council of Chief States School Officers’ report Opportunities and Options: Making Career Preparation Work for Students recommended, states and districts need a “demand-driven” system for determining which educational programs and pathways warrant continued development and investment, and which should be scaled down or phased out. That means basing all programmatic decisions on real-time, regional labor market data and engagement with employers. For example, Monroe Community College in Rochester, NY surveyed position and skill needs of over 2,400 employers and data-mined employment statistics to shape program design in four workforce clusters: advanced manufacturing, applied technologies, health care, and information and computer technology. This process led the college to create a 22-week precision machining certificate program. In the first year of the program, 90% of the students found a job upon completion.

Provide all students opportunities to earn credentials with value in the labor market.

High schools and community colleges have a significant role to play in providing students with a leg up on their future learning and earning. Forty percent of undergraduate students work more than 30 hours per week while enrolled. Most of that work occurs in the service sector—waiting tables, folding clothes, making copies—which is a significant missed opportunity for students and employers. A deeper focus on providing individuals with a certificate in a technical field would enable them to increase their earnings while in school, connect them with employers in their field, and set a foundation for stackable credential attainment. However, not just any certificate will work. Education leaders need to partner with business and industry to identify the certificates that have the greatest value in the labor market. ESG is currently leading a process through the New Skills for Youth initiative to recommend strategies for states to identify “credentials of value,” so that students are provided opportunities with the greatest likelihood for long-term economic gain. Recommendations will be available in early 2018.

Educate students and parents about the new economy.

The reality of the new economy has not permeated the general public. According to a recent PDK poll, over 80% of parents expect their child to attend college either part- or full-time, but nearly 90% of those parents expect their child to do so at a 4-year college. In our efforts to promote postsecondary education for all, we have not done enough to educate students and parents about the realities of college and the new economy. As we identified in our recommendations to improve career readiness in Montgomery County Public Schools, states and districts must help families understand the array of opportunities available in the new economy that do not require a bachelor’s degree but still lead to economic and career success. This starts with increasing the availability of information about regional career opportunities and wages. And it must include educators and counselors valuing career readiness in the same way they value college readiness to put all students on a path to employment that brings security for themselves and their families.

For years, we have heard that postsecondary education is the key to economic prosperity. While that drumbeat remains, the cadence has quickened and the drum set has expanded. Technological advances have fundamentally reshaped the economy, and at the same time, triggered changes in the landscape of postsecondary education and career opportunities. K-12, higher education, and workforce leaders must be responsive to this new reality in their vision and policies.