I addressed this issue in the keynote speech I gave recently at the 23rd Annual Economic Outlook Symposium of the Federal Reserve Bank in Chicago. I’ll summarize my talk here.
Does Everyone Need a College Degree?
Gone forever are the days of semi-skilled, well-paying blue-collar factory jobs that can provide a 19-year-old dropout or high school graduate with a living wage. For the United States to retain its competitive edge, it must build up its talent in STEM (science, technology, engineering, or mathematical) areas. At the top of this STEM jobs pyramid are scientists and engineers with advanced degrees who are inventing new technologies.
However, installing, applying, and maintaining these technologies across the entire spectrum of the U.S. economy requires an even broader base of middle jobs for knowledge technologists. Over the next decade 60 percent of these positions will not require a four-year college degree at the entry level, but rather appropriate occupational certificates, two-year degrees or post-secondary apprenticeships.
The United States is falling behind a number of other nations in the percentage of youth finishing high school and obtaining specific career preparation at the postsecondary level. For the first time in American history, the next generation of workers will not be better educated than the generation now retiring. Too many American workers are not equipped for today’s rapid pace of change in which jobs come and go, and skills can rapidly become obsolete.
Moreover, because of declining populations in Europe and some Asian nations and the movement of India and China into high-skill products and services, the United States cannot count on importing skilled talent needed for new high-tech occupations and the replacement of boomer workers. The current recession will only quicken the pace in eliminating low-skill jobs throughout the U.S. economy. Current economic upheavals may for a time mask these talent shortage issues, but over the next decade they will not be able to reverse the major socioeconomic forces behind this global talent showdown.
Solutions both National and Local.
There are, however, businesses and communities that have begun working to change this talent black hole into a decade of opportunity. They are beginning to create community-based organizations (CBOs) that I call “Gateways-to-the Future.” CBOs are partnerships among a broad spectrum of community groups to rebuild the jobs pipeline by reinventing local education-to-employment systems, retraining workers, and providing information on in-demand careers and the education and training needed for them.
But even more is needed. At the national level, the U.S. Congress can encourage these community investments by allowing businesses to capitalize investments in training and education, just as they now capitalize investments in plants and equipment. This will help reduce unemployment by encouraging companies to once again offer entry-level job trainee positions to fill vacant positions.
The United States has faced difficult economic odds before and beaten them throughout our history by encouraging flexibility, renewal, and growth. America’s competitiveness can be revived by moving away from a dependence on consumer consumption and by expanding technological innovations that boost exports and the manufacturing and service sectors.
(I’ll have more posts on this subject in the near future.)