Skills Gap- Myth or Reality

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1 Skills Gap- Myth or Reality Mary Crabbe Gershwin, Ph.D. Senior Fellow, Center for Workforce Success, The National Association of Manufacturers

2 Three Questions What are the trends in demand for skilled workers? What are the trends in supply? What factors can legislators address?

3 Our workforce has changed Skilled 20% Professional 20% Professional 60% Unskilled Skilled 15% Unskilled

4 Belief The supply of skilled workers in the U.S. is steadily on the rise.

5

6 Projected Change * in Percent of Population Age with an Associate Degree or Higher, New Mexico California Arizona Nevada Colorado Texas Connecticut Rhode Island New York Massachusetts Illinois Delaware Kansas United States Idaho Georgia Utah Oregon Florida Nebraska Washington Maryland Virginia New Jersey Minnesota Wyoming Oklahoma Louisiana Wisconsin Arkansas North Carolina Mississippi Indiana South Dakota Montana Alaska South Carolina Pennsylvania Alabama Tennessee Iowa Missouri Ohio Vermont Michigan Kentucky West Virginia New Hampshire Maine Hawaii North Dakota *Projected Change is based on 2000 educational attainment by race/ethnicity and the projected changes in the population age by race/ethnicity Source: U.S. Census 2000, U.S. Census Bureau s 1995 Population Projections

7 Belief. The US has the most highly educated workforce in the world.

8 Reality we used to. Adults with post secondary education: 1 st in OECD rankings Young adults with post secondary education: 8 th in OECD rankings

9 Belief. The four year degree is the key to success.

10 Not just about 4 Year Degrees 60% 40% 20% 0% Share of new jobs, % High school dropout 22% High school diploma 36% Some postsecondary 31% Bachelor's degree Jobs that require at least some postsecondary education will make up more than two-thirds of new jobs. Source: Carnevale, Anthony P. and Donna M. Desrochers, Standards for What? The Economic Roots of K 16 Reform, Educational Testing Service, 2003.

11 HIGH SKILLS MATTER Semi-conductor Manufacturing Engineers 2% Technicians 14% Operators 84% Ratio: 1 to 2 to 7

12 Factors for Legislators to consider Income gap and access to post-secondary- little progress in 30 years. Race and Ethnicity slow pace in closing gap Community College Role

13 Income Yet minimal progress in closing the income gap Young people from high income families enroll in college/pse % % Young people from low income families enroll in college/pse 74% 82% Gap 29% 28%

14 College Graduates by Age 24 Young People From High Income Families Young People From Low Income Families 75% 9% Source: Tom Mortenson, Postsecondary Educational Opportunity..

15 Workforce Demographics Increasingly Diverse (national statistics from Bureau of Census) 80% 60% 40% 20% 0% White 73% 65% 53% Hispanic 11% 16% 24% Black 12% 13% 14% Asian 5% 7% 11%

16 70% 65% Yet slow progress. College-Going Rates of High School Graduates Aged 18 to 24 by Ethnic Group, Asian 60% 55% 50% 45% 40% White, Non-Hispanic Black 35% Hispanic 30% 25% 20% Source: U.S. Census Bureau

17 High Leverage Policy Opportunities Reward results- Make producing graduates a top priority Current financing funds enrollment, not graduates Address problem of expand our talent pool (not just competing for the same students) Support partnerships to strengthen programs for growing occupations Use what s working in career pathway models Some levers for change Finance/Accountability/Data/Leadership

18 Solutions Community colleges are a key resource to help close the skills gap. Legislators should consider focusing on this vital sector because Scale and performance Potential for significant impact

19 Size: Over 45% of all post-secondary students are U enrolled in community colleges Other, 1% Community college, 45% Public 4-year, 34% Proprietary 4- year, 3% Private not-forprofit 4-year, 16%

20 Demographics 60% 50% 46% of all students in undergraduate higher education 7 million students nationally High portion of 1 st generation college students. P ercentage 40% 30% 20% 10% 0% SES Quartile No college Two-year college Four-year college

21 Performance: Employers report that community college graduates are ready for entry level work 87% Adequately Prepared 13% 40% 81% 4 year college 2yr college HS/GED Poorly Prepared 19% 60% 0% 20% 40% 60% 80% 100%

22 Affordability: Lower tuition makes college an option for more people $37,500 $35,000 $34,760 $32,500 $30,000 $27,500 $25,000 $22,500 $20,082 $20,000 $17,500 $15,000 $12,500 $10,000 $7,500 $5,000 $2,500 $ $5,132 $2, $9,364 $2, yr public 4-yr public 4-yr private

23 Challenge: Far too many students drop out Of 100 9th Graders, How Many Graduate from High School Enter College Enroll Sophomore Year Graduate Within 150% with Bachelor's Degree

24 What percent of CC students do not transfer or earn a degree or certificate? (First CC enrollments, after 8 years of HS) All CC students 50% Hispanic students 60% Low income CC students 63% Black CC students 74%

25 Between 1/6 and 1/5 of CC students earn fewer than 10 credits (8 years) What percent earn fewer than 30 credits? All CC students 39% Hispanic 47% Low income 46% Blacks--56%

26 2. Uneven Capacity: Access to coursework in high demand/high wage occupations is uneven The cost of providing courses for disciplines such as nursing, manufacturing, science exceeds costs of traditional courses. The potential for a feeder system to expand science, technology, engineering, math workforce (STEM) is untapped

27 High Leverage Policy Opportunities Reward results- Make producing graduates a top priority Current financing funds enrollment, not graduates Address problem of expand our talent pool (not just competing for the same students) Support partnerships to strengthen programs for growing occupations Use what s working in career pathway models Some levers for change Finance/Accountability/Data/Leadership

28 Business Champions: Promoting the 45% Solution Business Champions are focusing on efforts to strengthen community colleges in four key areas. Workforce Competitiveness: Meet employers needs for skilled workers in key industries that pay good wages. Individual Opportunity: Meet the needs of youth and adults to access flexible education and training pathways leading to good jobs and opportunities for ongoing education. Appropriate Accountability: Measure the progress of community colleges in closing the skills gap and reward their success in preparing students for high skill jobs.

29 For more information on Business Champions for a Competitive Workforce Mary Gershwin

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