America’s workforce makeover: college grads’ gain is high school grads’ pain

For the first time, four-year college graduates and those with graduate and professional degrees make up a larger share of the workforce (36%) than workers with a high school diploma or less (34%). This reflects an ongoing trend in our economy where the next job created most likely will require someone with postsecondary education.

This trend seems to have accelerated with the last recession. Our recent report demonstrates that of the 11.6 million new jobs created since the depth of the recession, 11.5 million went to college educated workers. In other words, 99 percent of the net new jobs created since the recession have gone to college educated workers. These workers, on average have been getting good jobs paying over $50,000 with benefits. (The employment numbers we present in the report should not be interpreted as the odds of someone with a particular education level getting a job.)

So, how did we get to this point? And, what does this say about the modern American economy?

Since the early 1980s, when the college wage premium started growing dramatically, there has been a shift away from routine blue-collar jobs in industries such as construction and manufacturing and toward high-skill managerial and professional jobs in industries such as healthcare and business services. This marks a significant change in the composition of the US labor market that favors college graduates and diminishes job prospects for workers with a high school diploma or less. This fundamental change in job prospects away from high school opportunities is one key reason that less and less people stop their education with a high school degree and instead choose to go on to college.

Production industries, such as manufacturing, construction and natural resources, used to employ nearly half of the workforce in 1947. Technology changes replaced the need for many of these jobs, and it shows: these industries only employ 19 percent of the workforce today.

At the other end, today’s growing industries, such as healthcare, business, financial, education and government services, mainly employ high-skill managerial and professional workers. These industries employed 28 percent of the workforce in 1947 and have grown to encompass 46 percent of the workforce today.

The Great Recession and recovery that followed it greatly accelerated these changes. Today, there are 5.5 million fewer jobs for workers with a high school diploma or less and 8.6 million more jobs for workers with a Bachelor’s degree or higher than there were at the start of the recession in December 2007. Blue-collar production and construction and extraction occupations have 1.2 million and 2.2 million fewer jobs, respectively, than at the beginning of the recession. Meanwhile management and healthcare professional and technical occupations have 1.6 million and 1.5 million more jobs, respectively, than they did at the beginning of the recession. It is no wonder that less educated workers have become discouraged when faced with high unemployment and diminished job opportunities. These structural changes have not been kind to the high school dropout, especially.

The largest occupational group in the American economy, routine office and administrative support jobs, lost 1.4 million jobs during the recession and recovery, primarily because of automation and the rise in digital information storage. In many cases, these occupations were a primary source of jobs for workers with a high school diploma or less.

Even as the number of individuals with college education has grown over the past decade, the labor market has continued to absorb them at a higher rate than individuals with a high school diploma or less, whose numbers have been declining among the working age population, and many of whom have dropped out of the workforce. These changes in the education of the population and the labor force have happened in response to growing demand for education and skill and persistently high college-wage premium over workers with a high school diploma or less.

People are getting more education, as they are increasingly realizing that there is a clear divide in the workforce and the economy between those with a college education and those without. Those with a college education and related analytical, critical thinking, and decision making skills are seeing their career opportunities grow. While those without a college education are increasingly relegated to limited and declining pockets of the economy.

So how does one compete in today’s job market? While there is some job growth in occupations that don’t require more education than a high school diploma, such as food preparation and serving-related jobs, it continues to be evident that a college education is a ticket to participate in the modern American economy.

Dr. Carnevale is Director and Research Professor of the Georgetown University Center on Education and the Workforce, an independent, nonprofit research and policy institute affiliated with the Georgetown McCourt School of Public Policy that studies the link between education, career qualifications, and workforce demands. For more information on the report, visit cew.georgetown.edu/dividedrecovery.