New jobs require higher skill levels

If you haven’t been convinced already by the approximately one million posts MFI has written over the years about the importance of a college degree for individual job security and earnings, and for the importance of college degree holders to an area’s economy (see here and here for some of our most recent), here’s one more piece of evidence for you.

Recent research published by the National Bureau of Economics suggests that following the Great Recession, employers got choosier about who they hired for particular occupations, looking for more specific skills and higher levels of training tied to increasing use of technology. As technology replaces jobs that can be automated, new jobs are created that involve running and analyzing the technology. Leaving the worker who is only trained for the automated task out of luck. An Atlantic City Lab article about the research explains:

For example, a sales job that used to consist of developing relationships with customers now involves using data analysis tools to target products for certain clients. A quality control manager who used to sit scanning products moving along a conveyor belt may now spend her time troubleshooting the machine that scans them for her.

This “upskilling”—which could have been a simple symptom of job scarcity, where employers took advantage of the high numbers of high-skilled but unemployed workers—hasn’t evaporated with the recovery of the job market. Instead, it has persisted, contributing to the difficulty that uneducated workers are having finding a job.

One impact of this upskilling is a further widening in the opportunity gulf between those with higher levels of education and those without. For Michigan’s unemployed, and especially our long-term unemployed, whose skills are likely depreciating or atrophying rather than increasing, this is bad news. According to a December 2015 report from Michigan’s Department of Technology, Management and Budget Bureau of Labor Market Information and Strategic Initiatives shows that Michigan’s long-term unemployed jumped from 21.2 percent to 30.0 percent (of total unemployed) between 2006 and 2015 (though the overall rate of unemployment has declined).

If Michigan is to become a high-prosperity state once again, we can’t leave these workers permanently sidelined. We also need to get ahead of this trend for adults who are low-skilled, and when setting goals for our kids and what their education must provide. For the greatest chance of economic success, once again, it’s a college degree.


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