With skyrocketing unemployment, a growing chorus of policymakers, pundits, and advocates are using … [+]
The economy has been wrecked by the coronavirus. More than 40 million Americans—a quarter of the workforce—have filed for unemployment. With skyrocketing unemployment, a growing chorus of policymakers, pundits, and advocates are using the words “reskill,” “upskill,” “retrain,” and more to push short-term job training as the way out of this recession. But a lack of skills isn’t the problem and more skills training isn’t the answer.
Proponents of short-term job or skills training say people are in need of skills to get back to work. But this recession is like no other. People didn’t lose their jobs because they didn’t have the skills needed, they were just the victims of this pandemic. And sadly, it is the most vulnerable who are hit the hardest by the pandemic.
Research published in April found that college degree holders were less likely to become unemployed due to the coronavirus, and a lot of that had to do with their ability to work from home. According to the research, college-educated Americans were eight percentage points less likely to lose their job than workers without a degree.
And new data from the U.S. Census Bureau shows this too. Bachelor’s degree holders are clearly the ones holding onto their jobs right now. While their unemployment rate jumped from 2.5% in March to 8.4% in April, that is less than half of the 17.3% unemployment rate of those with just a high school diploma.
For those with “some college” or an associate degree, the picture doesn’t look much better. They went from 3.7% to 15% in the same time — a rate nearly 80% higher than those with a four-year degree. This category includes those who didn’t finish a college degree, those with an associate degree, as well who completed the short-term job training or other certificates some are pushing right now.
Forty million people out of work is a crisis like no other. The urgency of the crisis understandably drives many to take an “all hands on deck” approach to do anything and everything we can to help American families. Some policymakers have proposed tax credits to provide short-term training or other education for those who have lost jobs. Former Chicago Mayor Rahm Immanuel wrote an op-ed this week calling for a bonus for people to go online to study “coding, advanced manufacturing, or nursing assistance.”
For others, the crisis provides the opportunity to advance policies they were already pushing. Earlier this year, the White House, Apple, IBM, and others announced a campaign to promote alternatives to a four-year degree. Others have been pushing different bills that would give Pell Grants to extremely short-term job training programs currently not eligible for Pell Grants.
But the fact of the matter is that not only is skills not the problem now, it wasn’t the problem before. Even with 2019’s record low unemployment, college graduates were less likely to be unemployed. Those with some college, no degree—which includes those with short-term job training—had an unemployment rate 22% higher than those with associate degrees and 50% higher than those with bachelor’s degrees.
2019 Unemployment Rates By Education. Source: U.S. Bureau of Labor Statistics. … [+]
More skills training isn’t the answer, at least not in the way some mean it. In a more general sense, a college degree can provide a number of skills to graduates as the enter the workforce. To be clear, education won’t save anyone from the pandemic, but it’s obvious that college graduates have been better able to weather the storm.
This recession is different from past economic downturns, but the recovery will likely show college graduates to be more resilient overall. After the Great Recession, all net new jobs created in the recovery went to those with bachelor’s degrees. Meanwhile, millions of Americans without a college degree lost jobs they never regained.
Of course, for those laid off, getting some sort of education or training isn’t necessarily a bad thing. But the training or education they get should lead to a well-paying, high-quality job. One with good benefits and things like predictable schedules and upward mobility if they want it.
Unfortunately, that often isn’t what comes from many short-term job training programs. Research shows that certificate holders see very different outcomes depending on the field studied, if they were working in field, and even across gender and racial lines.
There are almost 7,000 short-term certificate programs that the Department of Education has earnings data on currently, most of which would be classified as “vocational.” Some are post-baccalaureate, but most are considered below the associate degree level. Of the nearly 7,000 programs, just 7% leaves the median graduate earning above $40,000.
On the flip side, more than 4,900 of them had median graduates earning below the average high school graduate. And that’s for the programs long enough to get federal student aid. We don’t know a lot about the extremely short programs, but what we do know is mixed at best.
The future economic ripples of this crisis will likely be worse than what we see now. More people will probably lose their jobs, even those with a college education. But before people latch on to short-term programs that may promise economic security, buyers should beware. Sometimes if something sounds too good to be true, it’s because it is.
