Working with business leaders and responding to changing workforce needs

Nicole SmithAugust 2012

2012 SHEEO Higher Education Policy Conference

Universal Challenges

• Recessions accelerate process of skills-biased technological change.

• Jobs that remain, require more and more postsecondary education and training.

• Fastest growing industries are the ones that use postsecondary education most intensely

• The United States has been underproducing college-educated workers for decades (Goldin/Katz). 

• The undersupply of postsecondary-educated workers has contributed to inefficiency, inequity and mismatch

• If we continue to underproduce college-educated workers, the large and growing gap between the earnings of Americans of different educational attainment will grow even wider.

Skills biased technical change is the engine that favors services

SOURCE: The Georgetown University Center on Education and the Workforce analysis of Census and O*NET data

The Economic Value of College Education has increased over the past 40 years.

Wage growth by education level for men

Wage growth by education level for women

Source: Center on Education and the Workforce Analysis

We know that employment is related to education

Post recession 2007: The growth has been in college level jobs

The man-cession has an education dimension

About 65 percent $772 billion on education and training is spent outside of the formal postsecondary education system. (in

billions of dollars)

Characteristic of Mismatch

Knowledge, skills, abilities that for all intents should have been learned in the education system remain wanting. Even soft skills such as communication skills, networking, general people skills have grown in importance but remain insufficient.

5.6 million people in the US have been unemployed for six months or more.

43% of all unemployed and just over 4 percent of the entire labor force.

Disproportionately minorityMore likely to be male, Significantly more likely to have high school as the highest level

of education attained.

Skills matching depends upon both on non-cognitive and cognitive competencies

Physical and mechanical skills are on the decline

Cognitive skills are on the rise

Taxonomy of Tasks

TaskType

Task Description

Example Occupations

Potential Impact of

Computerization

Routine ‘Middle Skill’

• ‘Rules-based’• Repetitive• Procedural

• Bookkeepers• Assembly line workers

• Direct Substitution

Non-Routine Cognitive (‘Abstract’)‘High Skill’

• Abstract problem-solving• Mental flexibility

• Scientists• Attorneys• Managers• Doctors

• Strong Complementarity

Non-Routine Manual Tasks(‘Manual’)‘Low Skill’

• Environmental Adaptability• Interpersonal Adaptability

• Truck drivers• Security guards• Waiters• Maids/Janitors

• Limited Complementarity or Substitution

Our Responsibility

Impact Those “At Risk”:First generation college attendeesStrengthen high school to college pipelineImprove graduation ratesReduce need for remediationImprove workforce preparednessLeverage resources between public and

private sectors to support educational excellence