Capitol Report: Nine out of 10 new jobs are going to those with a college degree

Nine of out ten new jobs created in the last year have gone to those with a college degree, a finding showing the American economy’s growing reliance on a trained workforce as well as the changing demographics of the country.

A three-month average finds that 91% of the net increase in jobs held by those at least 25 years old are filled by those with at least a bachelor’s degree, according to data compiled by MarketWatch using the May jobs report released by the Labor Department on Friday.

That American employers want a higher educated workforce is not a new trend — there’s been a premium in wages for the college-educated since the early 1980s. But the most recent recession seems to have accelerated the divide.

Despite some lurches here and there, difficulty for those without a higher education has been the norm since the U.S. entered the worst economic period since the Great Depression at the end of 2007.

Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce, said the recent data fits the pattern since the recession, which is to show rising employment for those with at least bachelor’s degree, more muted gains for those with some college education, and a decline in employment by those with a high school degree or less.

The number of workers with a college degree has risen by 12 million since the recession, while the number with a high-school degree or less has fallen by more than 4 million.

Part of what is happening is what he calls upscaling. Some three-fifths of the 55 million job openings in this decade are to replace retiring baby boomers, according to a Georgetown study that Carnevale co-authored. But employers now will demand these replacements be better trained, rather than let them learn on the job.

“Now the person coming through the door, they’ll demand more education,” he said.

There are varying explanations for what’s going on — from the increasing role of technology and changing organizational structures to the switch from an industrialized economy to a service-oriented one.

America’s new jobs require a combination of decision-making, communications, analysis, and administration skills that are helped by post-secondary training. Fast-growing fields in health, science, technology, engineering and mathematics require these advanced skills.

The fact that new jobs are overwhelmingly going to the college-educated shows the value of the $1.5 trillion in student loans that have been racked up. Georgetown found that two-thirds of the new jobs being created need some post-secondary education, with about a third needing at least a bachelor’s.

One explanation that Carnevale doesn’t give much weight to is the idea that a college degree is just a signal for employers of a candidate’s credentials.

“It’s a weak argument in economics,” he said. “If, over time, the signal is the degree, and if it doesn’t work, the market will adjust.”

A Harvard Business School study finds differently. That study said employers seeking college graduates makes many “middle-skills jobs” harder to fill, and once hired, subjects employers to higher turnover rates as well as increased pay.

With a record number of job openings, there might be something to that. Surveys of employers frequently find complaints about the talent of the work force.

The one thing that could change the dynamic for those without a college degree is if there were a big push toward building infrastructure. “An infrastructure bill would take us back to 1950, it would be a full employment act for high-school graduates,” said Carnevale. He acknowledged it wouldn’t be a panacea, particularly after the infrastructure is actually created.

“At the end of 10 years, the stuff is built, then you have the same issue we have now with manufacturing,” he said. “But you get 10 years of heaven.”

Rex Nutting contributed to this report.

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