People who lost their jobs wait in line to file for unemployment following an outbreak of the coronavirus disease (COVID-19), at an Arkansas Workforce Center in Fort Smith, Arkansas, U.S. April 6, 2020.
Nick Oxford | File Photo | REUTERS
On Friday, President Donald Trump is expected to announce an executive order that could have far-reaching economic implications for Americans without college degrees. For the first time, the federal government (the nation’s largest employer) will prioritize a job applicant’s skills over where, or whether, they went to college.
Trump’s move, while bold, is not entirely novel.
Financial giant J.P. Morgan announced plans to end on-campus recruiting last year, and major tech firms, from Apple to Alphabet, have loosened degree requirements in recent years. Perhaps with good reason: A growing number of employers now question whether college graduates are ready for work, and Americans who attended college often question the relevance of their education in an increasingly dynamic labor market.
Major employers should take note, because research suggests that there may be as many as 71 million Americans who have the skills to thrive in higher wage roles but lack the degrees or other credentials that employers often require.
The elimination of so-called pedigree requirements holds potential to not only get Americans without degrees back to work faster but upend the no-college stigma that holds workers back and contributed to rising economic inequality in the decade that followed the Great Recession, when the top 1% of Americans captured 85% of income growth.
According to Maria Flynn, CEO of workforce nonprofit JFF, Americans without degrees are often the first fired in a downturn, and the last hired during periods of economic recovery. That means that workers without a college education, who have been disproportionately harmed by the pandemic, are likely to be overlooked in favor of the 36% of Americans that already have earned a four-year degree.
Despite conventional wisdom, working Americans without degrees are not low skill. So-called STARs (or workers “Skilled Through Alternative Routes” ) are the nurses, pharmacy technicians and electricians that make up the vast majority of the labor market. They have highly valued, and often transferable skills, that can be applied in higher wage work.
Ending the stigma of no-college-degree pedigree
While the Trump administration’s move is focused on clearing the path for workers who haven’t gone to college, the shift toward skills-based hiring will matter during periods of economic growth as well. Months ago, where we were in the tightest labor market in 50 years, seemingly endemic skills gaps were rooted, in part, in the not-so-subtle stigma attached to skill vs. degree-based jobs.
Seventy-three percent of parents say it is “extremely” or “very” important to them that their children earn a college degree. And almost twice as many high school graduates head straight to a four-year college as do a two-year institution. Perhaps with good reason: A four year degree still lights the path to the middle class for many.
But it is, all too often, viewed as the only path.
This reality needs to change. Americans without a degree have the skills and knowledge to thrive in higher wage jobs. And jobs that don’t require college can offer a less expensive, shorter pathway to a good career, oftentimes with a higher starting salary. They are often “stackable,” allowing workers to layer new skills and credentials by weaving work with learning and avoiding the student debt trap.
In fact, the Georgetown Center on Education and the Workforce found that a quarter of all “good jobs,” those that pay at least $35,000 for young workers and $45,000 for older ones, don’t require a four-year degree. They also found that the earnings potential grows over time for many of these jobs, with certain certificate programs providing a greater long-term ROI than many bachelor’s degrees.
Ironically, the no-college stigma tends to overlook the fact that college, as we know it, is failing a growing number of students. A third of those who start at a public four-year institution haven’t completed their degree six years later, and many never will. And the numbers are far worse for African American, Latinx and low-income students when you look at key demographic segments.
Some 36 million Americans have some college education, but no credential — and many are saddled with debt. The picture isn’t rosy even for those who complete a bachelor’s, with 41% of recent graduates underemployed before the downturn, working in jobs that don’t require their level of education and are often low-paying.
In fact, the bottom 25% of bachelor’s degree holders don’t earn any more than the average American who stopped their education at high school. And student debt has reached crisis levels, with too many borrowing for programs that don’t provide a positive ROI. With statistics like that, it should be no surprise that a Strada-Gallup survey suggests that “individuals who complete a vocational, trade or technical program are more positive about their education decisions than are individuals with an associate or bachelor’s degree.”
Against that backdrop, it stands to reason that employers are beginning to embrace the emergence of new (or revived) models for preparing students for the world of work jobs, including apprenticeships, on-the-job training, badges, certificates, certifications and associate degrees. They are also awakening to the positive ROI associated with investing in the creation of talent (as opposed to the old model of searching for existing talent).
We cannot afford to impede access to, or steer Americans away from four-year degrees. But ignoring the potential of workers without degrees reinforces the “all or nothing” narrative that has left millions of Americans saddled with debt, without a viable economic future.
Americans without degrees should not be overlooked for jobs at any rung of the economic ladder. And there is dignity, and nobility, in jobs that have not historically required a college diploma. If we want to help millions of Americans navigate the current crisis and build a more inclusive, equitable future,, we’ve got to think more broadly than the four-year degree as a gatekeeper for economic mobility — and resilience.
— By Chris Keaveney, CEO of Meritize and Jane Oates, president of Working Nation
For more on tech, transformation and the future of work, join the most influential voices disrupting the next decade of work at the next CNBC @Work Summit this October.