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This blog is dedicated to exploring new data and trends in economic development.
By: Katherine Mangan
Via: The Chronicle of Higher Education
Eight states are tackling a growing disconnect between the nation’s education system and its economy by exposing more middle-school and high-school students to jobs, making education relevant to careers, and beefing up alternatives to the four-year college degree, according to a new report from the Pathways to Prosperity Network.
The network, which began in 2012, works with 10 states to build pathways that connect the final years of high school with the first few years of career training in fields facing worker shortages, including information technology, health care, and advanced manufacturing. Led by the nonprofit group Jobs for the Future and the Harvard Graduate School of Education, the network is trying to increase the number of high-school graduates earning a postsecondary credential that will lead to a decent-paying job.
“There’s a lot of momentum around the idea of providing a much stronger set of career pathways for young people,” said Robert Schwartz, a professor emeritus at the Harvard education school.
Mr. Schwartz, one of several experts on work-force training who discussed the new report in a conference call with reporters on Monday, is a co-author of a 2011 report, “Pathways to Prosperity: Meeting the Challenge of Preparing Young Americans for the 21st Century.”
That report, which he said had galvanized support for a national network, concluded that Americans put too much emphasis on getting a degree from a four-year college, which it said fewer than one-third of young adults accomplish by age 25. It called for more focus on alternative paths that include career-focused education and apprenticeships.
The new report outlines the steps taken so far by California, Georgia, Illinois, Massachusetts, Missouri, New York, Ohio, and Tennessee. (Arizona and Delaware joined the network last month.) Their efforts, which include early-college high schools, technology-focused schools, and mentoring partnerships with local businesses, are a response to “the growing disconnect between our education system and our economy,” said Anthony P. Carnevale, a research professor and director of Georgetown University’s Center on Education and the Workforce. Mr. Carnevale is a national expert on work-force training whose studies about the economic value of various degrees are widely cited.
The landmark 1983 report “A Nation at Risk” was the impetus for providing solid academic offerings to every public-school student, he said, instead of steering underprepared students into vocational education. “We’re at the point where it’s too much of a good thing,” he added. As curricula became more academic and less applied, students were less likely to see the relevance of much of their learning, he said.
Dropping out or opting out of further education has serious consequences for today’s youth, who can’t just head to a factory to get a job the way their parents could have, he said. Automation has eliminated many of those jobs, and the only ones left “are the ones their bosses used to do,” said Mr. Carnevale. By integrating academic and skills training, “we’re providing the missing middle in American higher education.”
Among 2012 high-school graduates who didn’t enroll in college the following year, only 45 percent found work of any kind, the report notes, and only half of those jobs were full time.
Contributing to the problem is the “disengagement of American businesses” from the task of educating the next generation of workers, said Nancy Hoffman, a vice president and senior adviser at Jobs for the Future and the author of the state-progress report.
Early-college high schools, which allow students to start earning college credits while they’re in high school, are one way to provide momentum, she said.
Companies like IBM are struggling to fill jobs when many applicants come straight from high school and are underqualified, or have Ph.D.’s and are overqualified, said Maura Banta, director of citizenship initiatives in education for IBM. Businesses need to be more actively involved in providing mentors and internships to help cultivate more qualified workers, said Ms. Banta, who is also chair of the Massachusetts Board of Elementary and Secondary Education.
Darrell Steinberg, president pro tempore of the California State Senate, said he had helped secure $500-million over two years for a “career-pathways trust” that seeks to re-engineer the state’s high schools to make education more relevant to the needs of regional businesses.
By: Karen Beard (Intro)
In recent years, the widespread availability of high speed internet access coupled with a proliferation of new technologies and the growth of transparency movements like the federal Open Government Initiative, have resulted in dramatic growth in data visualizations. In its broadest sense, the term applies to any pictorial representation of data including charts and infographics. But the true power of data visualization is best seen when the tools are applied to enormous data sets to reveal patterns that would otherwise be impossible to discern.
A new interactive data visualization from Ben Schmidt, an assistant professor of history at Northeastern University and core faculty at the NuLab for Texts, Maps, and Networks, is an example of this power. Schmidt’s flow diagram—presented under the heading “What are you going to do with that degree?”—visualizes employment and education data from the American Community Survey. The figure explores the relationships between college majors and professions.
In many cases, the data reflect the common wisdom that many people work in fields unrelated to their degree. For example, less than half of people employed as police officers have degrees in criminal justice. The visualization also highlights differences in employment outcomes between narrowly focused degrees and those that are more academic. As might be expected, career-specific degrees such as nursing and education, have more consistent outcomes while broader fields of study, like mathematics and communications, feed into a more disparate array of professions.
Additional data visualizations created by Mr. Schmidt can be found here.
By: Dave Claborn, Director of Development and Community Relations, Ohio State University, Marion (Workforce 2014)
Via: Area Development
A resurgent manufacturing sector, and shifting workplace technology, has government, business, and academic leaders combining to build a modernized system of work and learning capable of equipping the workforce for 21st century careers.
The rates of change for technology, cultural shifts, economic cycles, and educational restructuring are nowhere near the same. It is that asynchrony, as much as any single cause, that has resulted in the “skills gap” that so occupies the conversations of CEOs and corporate hiring managers, particularly at manufacturing firms, says a new Georgetown University study (Failure to Launch: Structural Shift and the New Lost Generation).
It wasn’t long ago that American students were led to understand that manufacturing would, for the most part, occur overseas in countries paying a fraction of the U.S. wage; and if they hoped to have a sustainable career, it would be in finance, healthcare, design, communications — service rather than production. Couple that understanding with Bureau of Labor Statistics (BLS) data on earnings, unemployment, and educational attainment showing a 63 percent premium in median weekly earnings for those with a bachelor’s degree over a high school diploma, and a 4.5 percent unemployment rate for the BA holder vs. 8.3 percent for the high school grad — and it isn’t hard to see why the sons and daughters of well-off baby-boomers choose college over vocational training.
Now, with a resurgent manufacturing sector, the U.S. finds itself in the anomalous position of having four million job openings at the end of 2013 (BLS data), but only one out of three adults in their early 20s and just over half of adults in their late 20s are employed in full-time jobs according to the Failure to Launch study by Georgetown University’s Center on Education and the Workforce.
There’s been a dramatic shift in workplace technology over just four decades. In 1970, only one in four jobs required more than a high school education. Today, close to 70 percent require more training, but that training, in many cases, is more specialized and skills-based than might be found in a traditional liberal arts education. The Georgetown report notes, “As a result of increasing human capital requirements for both young and old, the education and labor market institutions that were the foundations of the 20th century industrial system are out of sync with the 21st century economy. The first step to a modernized system of work and learning is greater transparency in the alignment between post-secondary programs and career pathways. In addition, young adults will need to mix work and learning at earlier stages in the on-ramp to careers, and older adults need a less abrupt transition from working to retirement.”
Where Government, Companies, and Colleges Combine
The good news is we’re beginning to find answers. The answers are coming where government, education, and companies are each putting skin in the game.
Louisiana may be doing it as well as any state. Recognizing the direct connection between workforce training and economic development success, the Louisiana legislature last year authorized more than $250 million in workforce-related projects at community and technical colleges across the state. That’s on top of the $250 million already spent between 2007 and 2012. Called “Facilities with a Purpose,” the plan requires a 12 percent local match for project costs.
The investment is beginning to pay off. In Shreveport, state and local governments are building a $22 million workforce center at Bossier Parish Community College. The commitment to build the training center helped convince German steelmaker Benteler Steel/Tube to invest $975 million in a hot-roll steel tube-making facility that will employ 675 when it is complete. “We are making a long-term commitment, so we need to have certainty about the workforce of the future,” says Matthias Jaeger, president and CEO of Benteler Steel/Tube. “The value of the training facility is almost immeasurable.”
In southwest Louisiana, a new $20 million training center at SOWELA Technical Community College will train welders, process technologists, and other skilled workers, many of whom will land some of the 1,250 jobs in a new $16 billion South African natural gas-to-liquids facility.
In both the steel and gas projects, the companies are playing a direct role in developing curriculum. “What’s being done in Louisiana is exciting,” says Mike Kane, Sasol operations manager for the ethane-cracker project. “It’s a once-in-a-lifetime partnership for Sasol to be able to influence training at a public education institution in this way.”
Tackling the Skills Gap State by State
Louisiana isn’t the only place crafting workforce solutions. In fact, nearly every state that’s serious about business attraction is in the game. Here are some examples:
In Lexington, South Carolina, Michelin has developed a Technical Scholars Program that pays tuition, fees, and books for selected Midlands Technical College students. It’s coupled with a paid co-op position in the Lexington Michelin plant.
- Tennessee Governor Bill Haslam is pursuing a $35 million “Tennessee Promise” — a guarantee that every high school graduate in his state can attend a community or technical college free of charge if he or she so chooses.
- The Texas Skills Development Fund awards job training grants up to $500,000 to companies that partner with a community or technical college. In 2012, awards totaled over $22 million.
- In addition to offering workforce training grants, Ohio is developing a predictive model that overlays federal labor market information with real-time job postings, coupled with company surveys in various industry clusters. The result is data that schools can use to develop curriculum to meet skill requirements in a particular region at a particular time.
- Michigan is considering a statewide version of Bekum America Corporation’s apprenticeship program in Williamston, Michigan, where students receive 8,000 hours of hands-on training coupled with 60 hours of academic instruction in a partnering community college. The training is free to the apprentice, with a job promise at the end of the session. Bekum calls it “The Other Four-Year Degree.”
Unsatisfied with the quality or quantity of STEM-competent graduates available for its programming positions, IBM is getting heavily into the education business. Working with colleges in New York and Chicago, the tech giant is creating its own schools, called P-TECH academies. Eight are open and the company has plans for at least 29 more. IBM helps develop curriculum, heavy in STEM courses, for the six-year program. Graduates emerge with an associate’s degree, no debt, and the promise of a $40,000/year job with IBM.
The IBM P-TECH schools are similar to the German-style apprenticeship programs being organized in Michigan, Wisconsin, and several southern states by the German-American Chamber of Commerce. Under the German model, the company partners with an area community college to develop curriculum that coordinates with in-company on-the-job training. Students apply to the company for available apprentice positions. If accepted, they are paid a stipend and their education is paid for. Graduates earn an associate’s degree and a nationally recognized journeyman’s certificate and, in return, promise to work for the company for at least two years. “The first relationship is with the company,” says the German American Chamber’s Mark Tomkins.
Honda of America Manufacturing, Inc., facing the demographic challenge of eventually replacing its Ohio-based workforce, has developed its own in-house technical training program, but Honda is also putting $75,000 toward development of a mobile technology lab that can be parked outside high schools within its labor-draw area. Students visit the lab for a hands-on experience in modern manufacturing technology, and the hope is that they begin to understand that today’s manufacturing environment is quite different from the one their parents or grandparents experienced. The concept of taking the technology to the students “came together through a series of discussions with other businesses and our economic development partners in multiple counties,” says Caroline Ramsey, Honda’s assistant manager for Government and Community Relations. The mobile lab concept is borrowed from similar efforts under way in Michigan and Wisconsin.
Fixing Basic Education
Even before skills training, basic education needs attention says Ohio State Associate Professor Josh Hawley, recently tapped to head the Ohio Education Research Center, a collaboration of six universities and five research centers whose mission is to develop an Ohio preschool-through-workforce agenda. Compared with other developed nations, Hawley says, U.S. high school graduates have relatively low average skills. And that’s graduates — but what about those who don’t get that far? “From a policy perspective, you cannot ignore the fact that 25 to 30 percent of kids drop out anymore. Because there are no jobs for those people,” says Hawley. “No employer is going to routinely hire high school dropouts without training.”
Ohio’s governor, John Kasich, is taking note. He spent 20 minutes of this State of the State speech this year discussing education and workforce issues, proposing, among other things, vocational training for seventh-graders and online career road maps that could be downloaded on cell phones. “Our kids need direction,” said the Governor. “They need to understand where they are going.”
Via: The College Board
Two new studies prepared by the College Board explore the benefits of higher education. These studies not only examine the payoffs to individuals and society, but address the challenges in obtaining higher education, as well as the disparity of achievement and outcomes across different demographics.
Education Pays 2013: The Benefits of Higher Education for Individuals and Society documents the ways in which both individuals and society as a whole benefit from increased levels of education. The report examines differences in the earnings and employment patterns of U.S. adults with different levels of education. It compares health-related behaviors, reliance on public assistance programs, civic participation, and indicators of the well-being of the next generation. Financial benefits are easier to document than nonpecuniary benefits, but the latter may be as important to students themselves, as well as to the society in which they participate. In addition to the financial and nonpecuniary benefits of higher education, Education Pays 2013 examines the increases and the persistent disparities across demographic groups in college participation and completion. Read more . . .
How College Shapes Lives: Understanding the Issues builds on the information presented in Education Pays 2013: The Benefits of Higher Education for Individuals and Society by discussing some of the ways in which the payoff of postsecondary education can be measured and providing insights into why there is confusion about that payoff, despite strong evidence. The report focuses on the variation in outcomes across individuals, helping to clarify that the existence of a high average payoff and the reality of significant benefits for most students are not inconsistent with disappointing outcomes for some. The aim of this report is to provide background and context for readers to help them become more active and constructive participants in discussions of the role of higher education in the United States. Read more . . .
By: Eduardo Porter
Via: The New York Times
One of the few things that nearly everyone in Washington agrees on is that American workers are the best.
“More productive than any on earth,” President Obama has said of them. They “build better products than anybody else.”
Republicans, somewhat less exuberant, are nonetheless sure that American workers “can surpass the competition” on any level playing field. Even the United States Chamber of Commerce — not always a worker’s best friend — asserts that, along with the nation’s entrepreneurs and companies, America’s workers “are the best in the world.”
Fact is, they are not.
To believe an exhaustive new report by the Organization for Economic Cooperation and Development, the skill level of the American labor force is not merely slipping in comparison to that of its peers around the world, it has fallen dangerously behind.
The report is based on assessments of literacy, math skills and problem-solving using information technology that were performed on about 160,000 people age 16 to 65 in 22 advanced nations of the O.E.C.D., plus Russia and Cyprus. Five thousand Americans were assessed. The results are disheartening.
Though we possess average literacy skills, we are far below the top performers. Twenty-two percent of Japanese adults scored in the top two of six rungs on the literacy test. Fewer than 12 percent of Americans did. We are also about average in terms of problem-solving with computers. Paradoxically, our biggest deficits are in math, the most highly valued skill in the work force. Only Italians and Spaniards performed worse.
Some 34 percent of adult Americans scored in the top three rungs of the assessment for numeracy, 12.5 percentage points less than the average across all countries. Twenty-nine percent of Americans scored in the lowest two rungs — 10 percentage points more than the average. By percentage, more than twice as many Finns as Americans scored in the top two.
The O.E.C.D. study lands in the midst of a contentious debate over whether the United States faces a skills shortage. Over the last couple of years, employers have been saying that they can’t find enough skilled workers. Economists and other commentators have pointed out that employers would probably find them if they offered higher wages.
The report suggests that the sluggish employment growth since the nation emerged from recession probably has little to do with a skills deficit that has been a generation in the making. But it pretty forcefully supports the case that this deficit is an albatross around the economy’s neck.
“The recession did not fundamentally change the structure of the economy in terms of the supply and demand for skills or education,” argues Jonathan Rothwell of the Brookings Institution, who produced a study last year about the education gap afflicting the job markets of America’s largest cities. “Before the recession, inadequate education was a major problem. It continues to be.”
Mr. Rothwell says that the problem is getting bigger: while just under a third of the existing jobs in the nation’s 100 largest metropolitan areas require a bachelor’s degree or more, about 43 percent of newly available jobs demand this degree. And only 32 percent of adults over the age of 25 have one.
The O.E.C.D. puts this deficit into an international context. It finds that advanced economies are generating very few jobs for workers with middling skills. Yet while other countries seem to have gotten the message, racing ahead to build skills, the American skills set is standing still.
For instance, the youngest Koreans, age 16 to 24, scored 49 points more, on average, on literacy tests than the oldest cohort of 55- to 65-year-olds. Young Americans, by contrast, scored only nine points more than their elders.
While younger cohorts in other countries are consistently better educated than older ones, in the United States that is not always the case: 30-year-olds in 2012 scored lower, on average, in literacy tests than 30-year-olds in 1994.
“Unless there is a significant change of direction,” the report notes, “the work force skills of other O.E.C.D. countries will overtake those of the U.S. just at the moment when all O.E.C.D. countries will be facing (and indeed are already facing) major and fast-increasing competitive challenges from emerging economies.”
This will be unsurprising to anybody who has been paying attention to the performance of American students in international tests run by the O.E.C.D. The mediocre skills exhibited by Americans in their early 20s today map precisely onto the mediocre scores recorded by American teenagers in 2000.
And yet, the report raises a couple of vexing questions. The highly skilled in the United States earn a much larger wage premium over unskilled workers than in most, if not all, other advanced nations, where regulations, unions and taxes tend to temper inequality. So if the rewards for skills are so high, why is the supply of skilled workers so sluggish?
“The human capital base in the United States is quite thin,” said Andreas Schleicher, the O.E.C.D, deputy director for education and skills. “The American economy rewards skill very well, but the supply hasn’t responded.”
The United States was the first country to provide for universal high school education. Today, one high school student in five leaves without a diploma, a weaker outcome than in most O.E.C.D. countries. The math and reading scores of American teenagers in O.E.C.D. tests have not improved over the last 10 years. And our college graduation rates have slipped substantially below those of other rich nations.
Schools do not appear to be adding much value. Nor do employers, which do little to train workers. Immigration by less educated workers from Latin America plays some role. But as the O.E.C.D. notes, two-thirds of low-skilled Americans were born in the United States. And the United States has a poor track record in improving immigrants’ skills.
Socioeconomic status is a barrier. Not only is inequality particularly steep, little is done to redress the opportunity deficit of poorer students. Public investment in the early education of disadvantaged children is meager. Teachers are not paid very well, compared with other countries. And the best teachers tend to end up teaching in affluent schools.
Indeed, the United States is one of only three O.E.C.D. countries in which socioeconomically disadvantaged schools have lower student-teacher ratios. But the skills deficit is not only a problem of poverty and marginalization. American college graduates, notes Mr. Schleicher, perform worse than their peers elsewhere: “looking at certificates, the United States looks much better than looking at skills.”
The other question is equally perplexing: if the supply of skilled workers is so poor, how can the United States remain such an innovative, comparatively agile economy? In other words, even if the American skill set is poor compared with that of its peers, who cares?
Mr. Schleicher answered that question like this: today, the American labor market is good at attracting talented foreigners, offering them more money than they could make elsewhere.
Still, it might be risky to stake the nation’s future on maintaining a steady stream of skill from abroad. What would happen if other countries started rewarding their talented workers? What would happen if America’s influx of talent stalled?
Consider Japan, which has some of the most skilled workers in the O.E.C.D but uses them poorly. Regulations make it difficult for firms to hire and fire. Social mores keep companies from rewarding talent with higher pay. Many women are marginalized in the work force.
“Japan has fantastic human capital but uses it quite poorly,” Mr. Schleicher told me. “The United States is the opposite. It has mediocre assets but is good at extracting value from them.”
The question is, which country has the most difficult challenge? Mr. Schleicher says it’s no contest. In Japan, all you have to do is liberalize labor market regulations and allow firms to exploit human capital to its fullest. Here, human capital has to be painstakingly built, one cohort at a time. That work cannot begin soon enough.
By: David Leonhardt
Via: The New York Times
Looking at these two charts together is a quick way to become demoralized about the American economy:
Yes, the unemployment rate has fallen. But almost the entire reason it has fallen is the drop in the number of people in the labor force — either working or actively looking. As Binyamin Appelbaum has noted, the share of adult Americans with jobs is essentially unchanged over the last three years.
In a brief new report from Express Employment Professionals, a staffing firm, the company’s chief executive, Bob Funk, refers to the problem as “the great shift.” This shift long predates the recent financial crisis, too. The labor force participation rate peaked more than a decade ago.
If the decline stemmed largely from an aging work force, it would be much less worrisome. But the initial wave of baby-boomer retirements plays only a small role in the drop; the labor force participation rate has fallen almost as sharply for people aged 25 to 54 as it has for the overall adult population.
As the report notes, economists are not entirely sure what has caused the shift. One factor seems to be the so-called skills gap — the slow growth in educational attainment in recent decades, even as the economy has become more technologically advanced.
A second factor is most likely the weak economic growth of the past 13 years: the 2000-1 dot-com bust, the mediocre expansion that followed, the financial crisis that began in 2007 and the disappointing recovery of the last few years.
Another cause may be the rise in the number of workers on disability. The report cites a study by the Federal Reserve Bank of San Francisco to argue that disability is helping cause the decline in work. That’s probably right, although it is worth remembering that the growth of the ranks of the disabled may be more of an effect of the jobs slump than a cause.
Either way, the decline in labor force participation almost certainly receives too little attention. Each month, small changes in the unemployment rate receive great scrutiny. We often overlook just how flawed a measure of the job market that rate has become over the last 13 years.
Source (all charts): Bureau of Labor Statistics