Employers favor trained workers; degrees may not be the wisest choice

Employers favor trained workers; degrees may not be the wisest choice

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Vern Scott
Copy Editor


Is the United States in an economic recovery? Apparently so, say the economists, but it just doesn’t feel real to a lot of people on the street. If I don’t personally see signs of recovery around me, am I just out of the loop? Or maybe my distrust of official statistics has blinded me.

Economists gather data in order to measure ‘economic activity,’ usually expressed as Gross Domestic Product. The purpose is to determine ‘growth’ versus recession. The definition of GDP seems to change periodically, however. Yet, decision makers who rely on the term don’t seem to notice. This also applies to other statistics, notably inflation and unemployment.

GDP, which doesn’t necessarily refer to productivity or prosperity, was ill defined in the first place and doesn’t connect to people’s lives very well. Riots and exploding bombs are generally considered bad for productivity and prosperity, but GDP just looks at the expanded economic activity from all the cleanup required to fix the damage. If we all thought like economists, we might consider riots and exploding bombs to be good for the economy.

Hired by corporate and government decision makers to analyze current operations and evaluate the ramifications of alternative practices, economists have a huge impact on the economy. Once upon a time, companies stayed loyal to employees who had proved their loyalty. Now, employment is just another economic variable to be considered.

The current state of the job market has its roots in the push to relocate jobs to locations with lower labor costs. With advances in technology, robots and computers began to replace humans because they could work faster, more precisely, took no breaks and didn’t unionize. This trend hit a peak during the ‘Great Recession’ of 2008, when approximately two million people lost their jobs.

Demographically, the labor pool continues to increase in size, so competition for the best jobs becomes more and more intense. The seller’s labor market of the 1950s has shifted decisively to the buyer’s market of the 21st century. Employers, feeling their power, ask for more experience and job skills from applicants, and offer less training, fewer benefits, less opportunity for advancement and less money.

In the 1950s, a college degree was a mark of distinction. Many jobs required a degree, any degree, regardless of the field of study. That soon changed, as illustrated in the stereotype from the 1970s of Ph.D. holders driving taxis because their degrees had no relevance to the job market. Both my brother and cousin are examples of grads who, while living with parents, worked as bus or taxi drivers because they could not find work in their fields.

The ‘Great Recession’ of 2008 has changed the game radically. Many so-called elite degrees seem to have lost their luster. Among the thousands of newly minted college graduates who can’t find jobs in their field are lawyers and MBAs. This may be temporary, but when corporations learn that they can function with fewer employees, they also learn a reluctance to hire.

Young people with limited experience take longer to get up to speed. Older people with more experience are likely to desire higher pay and have less energy to put into the job. Blessed are the young with experience who will work cheaply.

To have any economic value in today’s world, a field of study must relate to job requirements. College degrees still have value in the market, but they have to be the right degrees. English, sociology, psychology? Forget it, unless it’s just a stepping stone to an advanced degree. Much better are petroleum engineering or nursing, for those who are up to the task.

In general, though, the era of looking good on paper is over. When an employer receives a hundred applications for a single job, paper credentials count, but the deciding factor is likely to be ‘job readiness.’ Someone with relevant experience who can start working the first day with little or no training is ideal.

The decline in value of a degree is coincident with an increase in the value of diplomas or certificates from programs specific to particular jobs. Trade schools and targeted community college job programs are more relevant to the market than ever. Employers have effectively outsourced the bulk of their expensive training programs to schools.

In the 1970s, trade schools appeared inferior, suitable for those who couldn’t or didn’t want to handle college. This was based on the notion that a degree was a ticket to higher income jobs. Since that is no longer true, training for a specific job can be a wise first choice for many, as well as a viable back up plan for the unemployed.

Based on an existing state program, President Obama’s proposal for government to subsidize community college education seems quite timely. Though likely doomed to fail at the national level due to partisan gridlock, states could make it a reality by leading the way. In particular, the draft bill in Oregon’s legislature would make community college much more affordable for thousands of people. Job specific programs would become viable for many who now see them as out of reach.

This may not be enough, however. If the number of job seekers continues to outweigh the number of available jobs, we will still be in the same boat. A robust economy will require more entrepreneurship to create jobs. A program emphasizing entrepreneurial skills could go a long way toward balancing the equation. Then we might see a real economic recovery.

 

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