More trouble ahead for America’s job market

By Katherine Klingseis,

The Georgetown University Center on Education and the Workforce released a report in July concluding there will be a deficit of 300,000 college graduates per year based on the number of job openings for college-educated workers in 2018.

“A lot of this [increase in demand for college-educated workers] is attributed to the increasing use of technology in all areas of production and economic activity, not just in manufacturing, but in the service sector as well,” said Peter Orazem, ISU professor of economics.

According to the study, the economy will not fully recover until 2015. After this point, jobs will begin to reappear. However, these jobs may be a bit different than those before the recession.

“College skills tend to be complementary with information technologies, and lower skills seem to be substitutable by information technologies,” Orazem said. “As a consequence, as it becomes cheaper and cheaper to acquire information technologies, that will make your production more efficient, allow you to produce more at a lower cost and you will also use more college graduates than high school graduates.”

The study reports that, by 2018, the economy will create $46.8 million job openings. Nearly two-thirds, about 63 percent, of these jobs will require workers to have some college education.

“You absolutely get a lot more people interested in looking at your credentials if you have a college degree,” Orazem said.

Luckily for the economy, students are responding to the demand. Sixty percent of high school students go to some sort of college, according to the study, which is a great increase from the 28 percent that went to college in the 1970s.

“Even with that large increase in the supply of college graduates to the labor market, the demand has still tended to outstrip supply,” Orazem said.

The labor market will suffer a deficit of three million college-educated workers by 2018, the study reports. While the deficit is a problem for America, Orazem believes that the solution will be simple.

“We are very good at providing jobs to people with skills,” Orazem said. “A lot of people in technology-oriented sectors in the economy believe that we should increase the number of H-1B visas that are available,” Orazem said.

H-1B visas is a non-immigrant visa in the United States, which allows employers to temporarily hire foreign workers in speciality occupations. A speciality occupation would be a job that requires a particular body of knowledge, including architecture, mathematics, engineering, social sciences, medicine, etc.

“[H-1B visas] are the ones that you issue on the basis of talent,” Orazem said. “So, we can import skills if we don’t think we will produce enough of them domestically.”

Orazem does not believe America has a problem providing college graduates to the labor market. He believes that primary and secondary schools are not preparing students well enough for college.

“The key thing, though, is what they are bringing to college in terms of skills,” Orazem said. “That’s where the U.S. is falling behind.”

In a technology-driven world, Orazem believes American school systems are not providing students with enough mathematical skills to compete with foreign students when they enter the job market.

“If you come to college without those skills, you are really behind the eight-ball when it comes to what’s going to happen after you leave,” Orazem said.

President Obama announced Race to the Top on July 24, an educational program created to spur reform in primary and secondary schooling. Of the $4.35 million, the largest portion will be going to improving effectiveness and quality of America’s teachers.

However, Orazem thinks teachers aren’t the only people to blame.

“If you live with a single parent who doesn’t emphasize education or may not have an education, your chances of developing the skills that you will need to succeed are much smaller,” Orazem said. “There’s not a lot schools can do to repair the damage done by a parent to a kid.”

In the past, studies have shown that high-quality preschools may be capable of repairing some of the damage. For instance, the High/Scope Perry Preschool Project evaluated a group of 128 children, 64 who received a high-quality preschool education, and 64 who did not receive any preschool education.

The study followed the students throughout their lives. The results found that, at 27 years old, the students who did the preschool program had higher monthly earnings, higher percentages, higher level of schooling and fewer arrests, with a lower percentage receiving social services.

“What was key [in the study] was that the kids got individualized attention and they also provided outreach to the mothers, to tell them how to do better,” Orazem said.

Iowa State offers remedial courses and placement tests to try to help students who may not have developed the necessary skills to succeed in college.

“Preparation matters,” Orazem said. “We try to do things when people come in with inferior preparation, but at some point, it’s sink or swim. We can’t guarantee that students admitted to Iowa State will succeed.”

Although 60 percent of students go to college, many of those students drop out before obtaining a degree. The reason why many students drop out of college is because they lack skills needed to succeed in college or are just lazy.

“It’s a real waste to come to college and leave with debt and no skill,” Orazem said. “We could easily solve this supply problem if 25 percent of college students who don’t finish college, just simply finish college. It’s not that there aren’t enough people starting college, the problem is that there aren’t enough people finishing college.”

(Posted originally on on Aug. 2, 2010)

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