Labor Day is an opportune time to write about American jobs and what the national employment picture means for Midwestern workers. I’ll start with employment changes, both by occupation and by educational attainment.
The most startling labor market fact is that for the past quarter century, total employment has declined for workers with a high school diploma or less. From 2007 to 2015 (the most recent available data), total employment has risen by 3.2 percent, or 4 million jobs. However, employment by workers without a college degree has declined by 7.2 percent, or more than 5.1 million jobs, during the same time period.
In contrast, employment for those with a college degree has risen by 16.7 percent or by 9.2 million jobs. Nothing quite like this has ever before happened before in the U.S. economy. Right now, 51.3 percent of jobs are held by non-college grads. That is down from 56 percent in 2007. In 2017, I predict half of all jobs will be held by college grads.
Some think the employment shifts are linked to the misfortunes of the housing market. Employment in construction is down by 1.3 million workers, and this sector has many workers without a college degree.
However, for college grads, total employment in construction is up by a few thousand. Sadly, the real story is not the impact of the Great Recession; rather, it is the accelerated technological change occurring in occupations.
In every sector except farming, employment of non-college graduates has declined. There are broad shifts between sectors, with management and professional occupations creating almost 5.5 million jobs since 2007. Still, employment for non-college grads in these occupations are down almost a quarter million jobs.
Employment among production workers is down by 749,000 jobs, but within that sectors there are 225,000 more folks with a college degree working. It isn’t just the job losses, but the deep shifts within occupations that impacts workers without a college degree.
It is important to say plainly that these jobs aren’t coming back. This isn’t some temporary underemployment, nor is it a story about foreign trade. Job displacement is caused almost wholly by technology and shifting demand. Manufacturing in the U.S. is at record production (yes, inflation-adjusted), but with fewer workers.
Ironically, the free trade opposition crowd will almost surely make things worse. The only sector in which non-college grads have seen employment growth is in transportation and logistics. That is one sector that a trade disruption of the kind championed by both presidential candidates will clobber. A trade war will devastate workers without a college degree. So what to do?
There are no easy fixes. Educational attainment has never been more tied to the economic viability of people and places than it is right now.
Unfortunately, more than one in 10 of our high school students melt away before graduation and almost four in 10 kids who do graduate fail to pursue more schooling. For these kids, the future is anything but bright.
Michael Hicks is the director of the Center for Business and Economic Research and an associate professor of economics in the Miller College of Business at Ball State University. Send comments to firstname.lastname@example.org.