The Governor is right that talent is a big issue. He’s wrong about how to solve it.
Reading the guest commentary Governor Snyder penned for Bridge Magazine explaining the ideas behind his Marshall Plan for Talent was like riding a roller coaster. It’s clear Governor Snyder understands that the world of work has fundamentally changed and that Michigan’s education system has failed to adapt. He rightly asserts that the rate of change in the economy is only going to accelerate. And yet his prescription for the 21st century problem he correctly diagnosed is a 20th century solution: more training in job-specific skills and an attitude of active discouragement toward college-going for our young people.
Let me take you through a few of my highs and lows.
Governor Snyder writes:
Although this transformation will be very challenging, it is our opportunity to create a more engaging educational system that leads to well-paying careers in high-demand jobs.
Yes, great, let’s do that! Good-paying careers for all Michiganders is the right goal, and reforming our education system is a critical strategy for meeting that goal.
He follows that up with this:
For example, there is very high demand for many professional trades and yet we live in a society that does not encourage young people to enter career technical education programs to gain the necessary and important skills to meet these needs.
There will never be enough good-paying jobs in the professional trades in Michigan for this to be the right strategy to meet his stated goal. According to the state’s own Pathfinder site, the median wage for carpenters is $43,070. Only 10 percent of carpenters make more than $66,880. Fifty percent of welders make less than $36,410. And only 10 percent make more than $55,290. According to the United Way’s ALICE report, a family of four needs to make more than $56,000 just to afford basic necessities. That income level doesn’t even allow a family to save for retirement, let alone buy a little cottage up north. And if we do indeed have a shortage of skilled work for these professions, the wages aren’t likely to rise if the labor market is awash with new carpenters.
Plumbers do slightly better, with a median wage of $63,610. The state’s website predicts an 11 percent growth rate in the number plumbers needed over the next ten years. Not bad! But not close to the wages and growth rate of mechanical engineers.
On top of that, the numbers of job openings in each professional trade just don’t support the governor’s enthusiasm. According to Pathfinder, there will be 393 annual openings for carpenters through 2024. There are 279 openings for plumbers, and 489 openings for welders. These might seem like big numbers. But not when you look at the total number of job openings. Through 2024–again, according to the state–there are projected to be about 140,000 job openings annually. With a certificate for any one of the professional trades (e.g., carpenter), you are prepared for fewer than one percent of those jobs because if you become a carpenter, you aren’t simultaneously prepared to be a welder.
Don’t get me wrong: we need carpenters, and for some kids it might be the perfect career. But we only need a few hundred more each year. I added up the number of annual job openings expected in the state’s list of “hot 25” professional trades, and it is almost 7,000. In other words, if we have 102,000 high school seniors graduating every year, we need 7,000, or just 6.8 percent, of them to pursue a professional trade. And only nine of those 25 occupations have a median wage higher than the ALICE rate. This just is not the mass solution to “well-paying careers” that the governor suggests.
Not to mention—for an economy to provide jobs to people in the trades, there needs to be a customer base: a population who are working in truly high-wage jobs, which tend to require a college degree. According to the 2012-2016 ACS, the median wage for all Michiganders who have some post-secondary education but not a college degree is $31,801. The median wage for those with a B.A. is $49,711.
Governor Snyder notes:
Our current system does a poor job of providing students useful information regarding the connection between fields of study and well-paying careers.
Too true! Kids have no idea what different jobs pay, or what income level equals a comfortable living, or how to prepare for a good-paying career. For instance, many people push kids to consider carpentry based not on the young person’s interest, but on the fact that carpenters are legitimately really busy these days. And also a guy they went to high school with is a carpenter and he makes $100,000. Yet the actual median wage of carpenters is well under the United Way’s ALICE rate for supporting a family with two kids. The carpenter who makes $100,000 is an outlier. Being a carpenter is the right choice for some kids, but it doesn’t come with a guarantee of strong lifelong earnings.
He follows up with this:
A positive exception that does better than most is career technical education. It often provides the appropriate competency for a well-paying job at either the high school or college level. But as a society, we push college degrees and tend to diminish the value of CTE.
If we are pushing college degrees, we are pretty bad at it. Only 27.4 percent of Michiganders 25 and up have a college degree or higher. By the way, their lifetime earnings are expected to be between half a million and almost three million dollars more than those without a degree (studies vary). This gap is largely thought to be widening over time—not shrinking.
One of the enormous challenges of post-secondary education today is the issue of cost. It is expensive to solely go to school for two, four or more years of education. Staggering student debt is something that causes many not to finish or significantly burdens those who complete their programs.
Yes! I would love to hear his ideas about reducing the costs of college and helping kids persist to achieve their degree, since having a well-educated population is so fundamental to our economic success. Not to mention it promotes equity and fosters an educated citizenry. Of course, incurring debt to get a college degree pays off over time in significantly higher lifetime earnings.
With a competency-based certificate model, students can move into well-paying jobs within a year or two in many cases, and with much less financial burden.
It may be true that some skilled trades pay relatively well within two years of the certificate being awarded. But what matters in the economy that the governor correctly understands is going to be full of increasingly rapid change isn’t whether that first job pays well—it’s whether that individual is set up for a career of good-paying jobs. There is simply no comparison between the lifetime earnings of most people with a college degree and most people without one.
Employers are already struggling to find people with the necessary competency in fields as diverse as information technology, manufacturing, healthcare and the professional trades. Job providers are hiring people who have the skills but not a degree.
While some employers may feel this way, this just isn’t true from the perspective of a citizen. The unemployment rate for Michiganders with a post-secondary credential that isn’t a college degree is 6.8 percent. The unemployment rate for those with a college degree is 3.3 percent. People with degrees are having a much easier time getting jobs. (Not to mention, they have a higher rate of labor force participation: 85.6 percent vs. 77.1 percent).
While the governor doesn’t mention the failed Amazon HQ2 bids of Detroit and Grand Rapids in his commentary for Bridge, the entire Marshall Plan is seemingly a response to the loss—neither city even made the list of finalists. Does anyone think that Amazon didn’t decide to locate here because we have a shortage of plumbers? Did the governor really miss the key message: Amazon—and other companies that offer good-paying careers—need a population that is high-skilled. And by high-skilled, they mostly mean college degree-holding.
I understand the desire among many to emphasize CTE and skilled trades for young people. Our talent gap—especially in college degree attainment—is daunting. It’s a lot easier, and cheaper, to get a young person to complete a certificate course than to graduate from college, and we know that high school graduates who don’t pursue any post-secondary education are most likely going to live a life of financial hardship. On top of that, the trades offer honorable and reliable work, and some do pay well. But overall, discouraging college and promoting a lower educational credential is the wrong solution, for our young people, and for Michigan. Governor Snyder seems to think it’s silly that our society values a college degree over a recognized set of earned competencies. I disagree, but it’s not my opinion that matters—it’s the market’s. And there is simply no evidence that the market is suddenly going to stop valuing college degrees and start valuing a set of earned competencies.
Governor Snyder closes:
We are in a fast-changing world that may soon look like a place some of us may not yet even be able to imagine. But as we travel this path, we must lead the way for the sake of our children and grandchildren.
He’s absolutely right about how urgently this transformation requires a new approach to education. Unfortunately, in his prescribed response to this transformation, many of his ideas are absolutely wrong. And more than anything else, I fear they lead to a state where, instead of figuring out the difficult work of how to make sure college is an opportunity every child is prepared for and, if they want to pursue it, supported through, we throw up our hands. We decide to accept that college and the choices it affords are reserved for the affluent, and hope that everyone else can make a good living pursuing their passion for pipe-fitting.
For an alternative approach, check out our recommendations on policy changes that would actually improve outcomes for kids.