MARYLAND S FORGOTTEN MIDDLE-SKILL JOBS MEETING THE DEMANDS OF A 21ST-CENTURY ECONOMY March 2010
ACKNOWLEDGMENTS Maryland s Forgotten Middle-Skill Jobs was written by National Skills Coalition (formerly The Workforce Alliance), Washington, D.C., as part of its national Skills2Compete Campaign. The national version of this report, America s Forgotten Middle-Skill Jobs, is available at www.nationalskillscoalition.org. The state and national efforts of the Skills2Compete campaign are made possible, in part, by general support from National Skills Coalition's national funders including the Ford Foundation, Joyce Foundation, Charles Stewart Mott Foundation, W.K. Kellogg Foundation and Annie E. Casey Foundation. In addition, special thanks to the Ford Foundation for funding related to the production and release of this report. Writing: Bronwyn Mauldin Data analysis: Andrea Mayo Design: Axie Breen
CONTENTS 4 Executive Summary 5 Introduction 7 Maryland s Forgotten Middle-Skill Jobs 11 The Face of Maryland s Middle-Skill Jobs 14 Maryland s Middle-Skill Gap Past and Future 15 Greater Pain in High Demand Industries 15 Maryland Educational Projections: A Continuing Middle-Skill Challenge 17 The Middle-Skill Gap and Maryland s Future Workforce 18 An Even Greater Basic Skills Crisis? 19 Closing the Gap 19 The Face of Middle-Skill Education and Training 20 A 21st-Century Skill Guarantee 22 The Benefits and Returns of a 21st-Century Skill Guarantee 24 Conclusion 25 Appendix: Methodology FIGURES AND TABLES 8 Demand for Middle-Skill Jobs is Strong, Will Remain Strong in Maryland 8 Figure 1. Maryland Jobs by Skill Level, 2007 8 Table 1. Maryland Jobs by Skill Level, 2007 9 Figure 2. Maryland s Total Job Openings by Skill Level, 2006-2016 9 Table 2. Maryland Jobs and Total Job Openings by Skill Level, 2006-2016 12 Thirty Middle-Skill Jobs Maryland Can t Live Without 12 Table 3. Projected Maryland Demand for 30 Middle-Skill Occupations, 2006-2016 13 Green Jobs are Middle-Skill Jobs 13 Figure 3. U.S. Employment in Green Industries by Skill Level, 2004 14 Maryland s Skills Mismatch: A Middle-Skill Gap 14 Figure 4. Maryland s Jobs and Workers by Skill Level, 2007 16 Maryland s Future Middle-Skill Gap: Educational Attainment Past and Future 16 Figure 5. Percentage Change in High-Skill Maryland Workers, 1990-2020 16 Figure 6. Percentage Change in Middle-Skill Maryland Workers, 1990-2020 16 Figure 7. Percentage Change in Low-Skill Maryland Workers, 1990-2020 17 Table 4. Actual and Projected Change in Maryland Workers Educational Attainment, 1990-2020 17 Maryland s Workforce of Tomorrow is in the Workforce Today 17 Figure 8. Working Maryland Adults Age 20-64 in the Current and Projected Population, 2005-2020 19 There are Many Different Pathways to Middle-Skill Jobs 19 Table 5: Types of Training Programs for Middle-Skill Jobs HIGHLIGHTS 5 Highlight 1. What is a Middle-Skill Job? 10 Highlight 2. Middle-Skill Jobs in Science, Technology, Engineering and Math (STEM) 11 Highlight 3. Do all Middle-Skill Jobs Pay High Wages? 13 Highlight 4. The Middle of the Green Revolution
EXECUTIVE SUMMARY With a diversified economy made up of industries from agriculture to high-tech businesses, Maryland is rated as one of the top states in the country best prepared to thrive in the 21st century economy. However, there are gaps in the workforce and in training and education policies that threaten to undermine its strengths. Middle-skill jobs represent the largest share of jobs in Maryland some 47 percent and the largest share of future job openings. Middle-skill jobs are those that require more than a high school diploma but less than a four-year degree. Prior to the recession, Maryland was already experiencing shortages of middle-skill workers in crucial industries. Much of the job creation fostered by the American Recovery and Reinvestment Act will be in middle-skill jobs. With rising unemployment in the state, this is precisely the time to ensure Maryland is training the middle-skill workforce that will be critical to economic recovery and long-term success. Addressing the need for middle-skill workers will require attention not only to educational opportunities for young people, but also for those already in the workforce. Two-thirds of the people who will be in Maryland s workforce in the year 2020 were already working adults in 2005 long past the traditional high school-to college pipeline. Who are middle-skill workers? They are the construction workers who build and repair Maryland s bridges and roads. The health care technicians who care for Marylanders and their loved ones. Truckers who keep Maryland s stores supplied. Police and firefighters who keep Maryland safe. Federal funds from the stimulus bill are expected to create millions of new jobs and many of these will be middle-skill, especially in green jobs, construction, manufacturing and transportation. Matching the skills of Maryland s workforce to meet this demand will help its economy recover more quickly and prepare the state for better times ahead. But it doesn t end there. Retirement of large numbers of baby boomers will keep demand for middle-skill workers high for years to come. Maryland can take proactive policy actions to align its workforce and education resources to better meet the state s labor market demand. Maryland can also make investments in training programs that will train many more residents who are laid off, or working in low-skill jobs for better, more plentiful middle-skill jobs and careers. If Maryland is to realize its full economic potential, educational access must reflect the demands of a 21st-century economy and the realities of the 21st-century workforce. The following vision can reshape the state s workforce and education policies and investments to meet these new needs: Every Marylander should have access to the equivalent of at least two years of education or training past high school leading to a vocational credential, industry certification, or one s first two years of college to be pursued at whatever point and pace makes sense for individual workers and industries. Every person must also have access to the basic skills needed to pursue such education. Businesses, labor, educators, community-based organizations and others must work together on this ambitious goal. Policymakers must step in with strong political leadership and commitment to ensure that Maryland has the middle-skill workforce needed to recover and thrive. 4
INTRODUCTION Maryland s economy reflects its unique geography. Rich soil and a long coastline mean agriculture and fishing have long been a strong part of the economy. Proximity to the nation s capital has attracted many industries serving the federal government including defense and telecommunications. Alongside them, Maryland has attracted a host of information technology, biotechnology and other high tech companies. Between 2002 and 2007, bioscience, aerospace, construction, and healthcare showed the fastest job growth rates, with healthcare and hospitality and tourism adding the most jobs. Healthcare and computer occupations are among the occupations with the fastest projected growth rates. 1 A 2008 report by the Kauffman Foundation ranked Maryland third in the nation among states best prepared to thrive in the new economy. 2 Maryland has risen steadily in those ranks, from 15 in 1999 to 5 in 2002. Education Week ranked Maryland s state public education system number one in the nation in its 2009 and 2010 Quality Counts surveys. 3 These rankings are in no small part because of government investments in the state s education system, as well as in its workforce and industries. The Kauffman report ranks Maryland as second in the nation in both workforce education and in federal, state, university and nonprofit investments in research and development. Thanks to those investments in education and workforce training, 88 percent of Marylanders have at least a high school degree and 35 percent have a college degree or more, both above the national average. 4 That workforce has played a key role in the state s growth and success in recent years. This same workforce will be essential to Maryland s ability to rebuild and thrive after the economic downturn. New research on projected job openings and on retirement trends in the workforce shows that the largest share of jobs in Maryland today is in fact middle-skill jobs. On top of that, funds from the American Recovery and Reinvestment Act (ARRA, also known as the Recovery Act) are expected to increase the number of middle-skill jobs in Maryland and nationwide. Middle-skill jobs are those that require more than a high school diploma but less than a four-year degree. The data further show that middle-skill jobs will make up the largest segment of Maryland s total labor market in the foreseeable future. Despite its strong record of postsecondary education and workforce training, Maryland will experience shortages of the middle-skill workers critical to economic recovery and long-term success. Prior to the recession, businesses across the state were reporting the negative impact of skilled worker shortages on their productivity and growth. To maintain its edge and ensure it can 5 HIGHLIGHT 1 What is a middle-skill job? Some 42 percent all job openings in Maryland between now and 2016 will be in middle-skill jobs. What is a middle-skill job? One that requires more than a high school diploma but less than a four-year college degree. Who provides middle-skill training? Community colleges, private career schools, apprenticeship programs, and communitybased training organizations. How can the state meet the demand for middle-skill and high-skill jobs? Every working Marylander should have access to the equivalent of at least two years of education or training past high school and the basic skills needed to enter that training.
take advantage of the job creation generated by the economic recovery, Maryland must invest in both high- and middle-skill education and training to ensure businesses have the talent they need. At the same time Maryland also must make investments to improve the basic skills of its low-skill workers. Maryland has some important policies in place to address the state s shortage of middle-skill workers. Guaranteed Access Grants ensure that more residents can gain in-demand credentials at the state s two-year and four-year colleges by covering the entire unmet financial need for lowincome students. The program s full-time attendance requirement makes it unavailable to most adult students who balance work and school, but the state s Part Time grant ensures low-income working adults who attend school part-time can secure tuition assistance. Maryland also has taken steps to ensure that adults who don t have the necessary basic skills to enter postsecondary education and training can access an educational pathway to skilled jobs. In the spring of 2008, the General Assembly approved legislation that laid the groundwork for the Governor s initiative to realign the state s adult education system to better connect low-skilled individuals with in-demand middle-skill credentials and educational pathways to careers. And growing enrollments and completions in high school Career and Technology Education programs are increasing the pipeline of middle-skill workers. These are important pieces of a strategy to address the state s middle-skill gap, but more can be done. Maryland needs a bold and broad vision to address the educational and economic challenges facing the state during these tough economic times and beyond. Maryland needs a truly transformative vision that allows every worker to be a part of economic recovery: guaranteed access to two years of postsecondary education or training. Every Marylander must have the opportunity to earn the equivalent of at least two years of education or training past high school that leads to a vocational credential, industry certification, or one's first two years of college. It must be available at whatever point and pace makes sense for individual workers and industries. The state must further ensure that every Marylander has access to the basic skills needed to pursue such education. America has done this successfully before. There are precedents for resetting and raising the bar for educational attainment, and there is strong evidence that such broad human capital investments yield substantial dividends for both workers and businesses. Maryland s need for qualified middle-skill workers today is greater than ever before. Federal investments from the Recovery Act will create a boom in industries with predominantly middleskill jobs, such as construction, manufacturing and transportation. Matching the skills of the state s workforce with this demand will help the economy recover more quickly, take advantage of the resulting job creation, and prepare Maryland for better times ahead. 6
MARYLAND S FORGOTTEN MIDDLE-SKILL JOBS Conventional wisdom holds that America has evolved into an hourglass or dumbbell economy: a bifurcated labor market with a small number of highly skilled, highly paid workers and a much larger number of low-skill, low-paid workers. Many people believe that high-skill jobs requiring a college education are the only key to economic competitiveness and success. Within such a model, middle-skill occupations the jobs that fueled the expansion of the world s largest economy in the 1950s and 60s and provided the foundation for a robust American middle class are on the verge of extinction. It s a bleak picture, to be sure. It s also a myth. The truth is that middle-skill jobs, which require more than a high school diploma but less than a four-year degree, currently make up the largest segment of jobs in the U.S. economy, and will continue to do so for years to come. While middle-skill jobs have declined slightly as a portion of total employment nationwide, roughly half of all employment today is still in middle-skill occupations. And nearly half (about 45 percent) of all job openings between 2004 and 2014 will be at the middle-skill level. This compares with one-third of job openings in high-skill occupational categories and 22 percent in occupations requiring no more than a high school degree. 5 The national picture holds true in Maryland as well. Nearly half of all Maryland jobs in 2008 46 percent were middle-skill jobs, representing almost 1.2 million workers (Fig. 1, Table 1). The demand for middle-skill workers in the state will remain high in the decade between 2006 and 2016, with more than 434,000 middle-skill job openings 42 percent of all job openings expected during this time. This compares to low-skill jobs and high-skill jobs, which will account for 23 percent and 35 percent of openings respectively (Fig. 2, Table 2) What s more, as economic recovery funds are invested, a large share of the jobs they create will be middle-skill jobs building and repairing roads, manufacturing renewable energy products and caring for America s aging population. Mark Zandi, Chief Economist at Moody s, projects that by the fourth quarter of 2012, stimulus spending from ARRA will substantially improve employment nationwide in several industries dominated by middle-skill jobs, including construction (802,800 jobs), manufacturing (589,700) and transportation and warehousing (129,600). 6 Despite these numbers, policymakers at both the federal and state levels have increasingly focused on college and university education, without proportionate attention to middle-skill jobs, and the education and training investments needed to ensure that workers have the skills they need to succeed in these vital occupations. This represents a lost opportunity to invest in Maryland s immediate recovery and long-term economic future. 7
Demand for Middle-Skill Jobs is Strong, Will Remain Strong in Maryland FIGURE 1. Maryland Jobs by Skill Level, 2008 High Middle Low 19% 35% 46% High 35% Low 19% Middle 46% Source: Calculated by National Skills Coalition from the Bureau of Labor Statistics website. TABLE 1. Maryland Jobs by Skill Level, 2008 Employment Percent Total, All Occupations 2,561,540 100.0% Management 144,520 5.6% Business & Financial 138,170 5.4% Professional and Related 603,250 23.6% Total, High Skill 885,940 34.6% Sales and Related 267,370 10.4% Office and Administrative Support 424,980 16.6% Construction 143,000 5.6% Installation and Repair 97,730 3.8% Production 99,580 3.9% Transportation and Material Moving 149,560 5.8% Total, Middle Skill 1,182,220 46.2% Service Occupations 490,410 19.1% Farming/Fishing/Forestry Occupations 2,970 0.1% Total, Low Skill 493,380 19.3% Source: Calculated by National Skills Coalition from the Bureau of Labor Statistics website 8
FIGURE 2. Maryland s Total Job Openings by Skill Level, 2006-2016 Low Skill 23% Jobs that require a high school diploma or less Jobs that require a four-year college degree or more High Skill 35% Middle Skill 42% Jobs that require more than a high school diploma but less than a four-year degree Source: Calculated by National Skills Coalition from Maryland Department of Labor, Licensing, and Regulation data. Total number of jobs openings over the ten year period, including new jobs and replacement jobs created by retirement and turnover. TABLE 2. Maryland Jobs and Total Job Openings by Skill Level, 2006-2016 Employment Job Openings 2006 2016 Number % Total, All Occupations 2,759,535 3,147,180 1,027,235 100.0% Management 164,490 182,490 53,560 5.2% Business & Financial 151,465 175,405 50,475 4.9% Professional and Related 613,965 736,735 250,005 24.3% Total, High Skill 929,920 1,094,630 354,040 34.5% Sales and Related 304,700 330,170 122,125 11.9% Office and Administrative Support 438,215 477,190 140,850 13.7% Construction 184,350 221,295 68,660 6.7% Installation and Repair 107,730 119,410 29,680 2.9% Production 102,565 98,565 22,865 2.2% Transportation and Material Moving 160,420 172,650 50,150 4.9% Total, Middle Skill 1,297,980 1,419,280 434,330 42.3% Service Occupations 525,575 627,160 237,215 23.1% Farming/Fishing/Forestry Occupations 6,065 6,105 1,650 0.2% Total, Low Skill 531,640 633,265 238,865 23.3% Source: Calculated by National Skills Coalition from Maryland Department of Labor, Licensing, and Regulation data. 9
HIGHLIGHT 2 Middle-Skill Jobs in Science, Technology, Engineering and Math (STEM) Policymakers have become increasingly concerned about U.S. global competitiveness in recent years, and a broad consensus has developed about the need for a strong science, technology, engineering, and math (STEM) workforce to support innovation industries and emerging technologies. In particular, business and political leaders have called for increasing the number of students receiving bachelor or advanced degrees in these fields. However, these highly skilled professionals aren t the only STEM workers in short supply. Employers have indicated there is a significant shortage of the technicians and middle-skill workers needed to implement the new technologies developed by highly skilled innovators. A 2005 National Association of Manufacturers report found that while 35 percent of manufacturers anticipated a shortage of scientists and engineers, more than twice as many respondents anticipated a shortage of skilled production workers, precisely the kind of middle-skill jobs that require more than high school but less than a four-year degree. 7 In a recent solicitation for grant proposals, the U.S. Department of Labor emphasized the importance of the middle-skill STEM workforce: The STEM workforce pipeline challenge is not just about the supply and quality of the baccalaureate and advance degree earners. A large percentage of the workforce in industries and occupations that rely on STEM knowledge and skills are technicians, including others who enter and advance in their field through subbaccalaureate degrees and certificates or through workplace training. Creating interest and preparing more Americans to be productive in STEM-related jobs will require attention to segments of the workforce that are often overlooked in STEM discussions: incumbent workers who need skills upgrading, dislocated workers who are trying to find new jobs in industries with a future, and individuals from groups traditionally underrepresented in STEM fields. 8 The story is similar in Maryland. A 2007 report found workforce shortages in the state s bioscience industry across all skill levels. It further found that almost 38 percent of the jobs in Maryland s bioscience firms could be filled with persons with less than an Associate s degree, presuming they have adequate training. 9 A truly comprehensive innovation agenda must address the demand for both highly educated innovation professionals and the middle-skill workers needed to implement their innovations. These middle-skill workers are at the roots of a successful STEM strategy, nationally and in Maryland. 10
THE FACE OF MARYLAND S MIDDLE-SKILL JOBS What is a middle-skill job? It requires education or training past high school, but not a four year degree. You may not know it, but you probably see people working in middle-skill jobs every day. In fact, Maryland s communities rely on middle-skill jobs. Middle-skill workers are the police officers and fire fighters who keep Maryland safe. They are the medical technicians and therapists who keep Maryland healthy. They are the air traffic controllers, electricians, and mechanics who keep Maryland s infrastructure up and running. These are local, hands-on jobs, meaning they are unlikely to be outsourced to other countries. Many of these are well-paid jobs, offering Maryland workers a chance at economic security and prosperity. As illustrated in Table 3, these are jobs with good earning potential. Many offer median earnings that exceed the Maryland overall median for 2008 of $37,780. HIGHLIGHT 3 Do all middle-skill jobs pay high wages? Of course, not all middle-skill occupations pay well or have meaningful advancement opportunities. Skills are only part of the economic success equation. But nationally, growth in demand for many middle-skill occupations has been fast enough to generate not only strong employment growth, but also rapid growth in wages. 10 Regional research supports the connection between many middle-skill jobs and good wages. For example, there were 389,620 middle-skill jobs in Maryland with median annual earnings above the overall state median of $37,780 per year. 11 At the national level, the data tell a similar story. Between 1997 and 2005, American workers on the whole saw an overall real wage increase of just 5 percent (adjusting for inflation). At the same time, many middle-skill occupations saw significantly higher wage increases. 11
Thirty Middle-Skill Jobs Maryland Can t Live Without TABLE 3. Projected Maryland Demand for 30 Middle-Skill Occupations, 2006-2016 Employment Net Change Job Median Openings Earnings 2006 2016 Number % 2007 Computers Support Specialists 11,870 13,750 1,880 15.8% 5,545 $46,890 Specialists, Other 12,940 13,635 695 5.4% 4,130 $86,420 Construction Carpenters 31,630 38,930 7,300 23.1% 11,575 $39,160 Electricians 16,915 19,640 2,725 16.1% 7,080 $47,100 Painters 9,925 12,895 2,970 29.9% 4,735 $33,920 Operating Engineers 7,450 8,440 990 13.3% 2,435 $40,350 Plumbers 12,835 15,360 2,525 19.7% 5,170 $47,950 Healthcare Dental Hygienists 2,710 3,475 765 28.2% 1,285 $68,840 Diagnostic Medical Sonographers 1,030 1,380 350 34.0% 490 $67,050 Licensed Practical Nurses 10,415 12,715 2,300 22.1% 5,140 $46,690 Medical Lab Technicians 2,550 3,115 565 22.2% 950 $40,410 Radiology Technicians 3,830 4,940 1,110 29.0% 1,630 $59,290 Respiratory Therapists 1,750 2,545 795 45.4% 1,055 $59,400 Surgical Technologists 1,515 2,200 685 45.2% 1,150 $44,190 Installation, Maintenance, and Repair Auto Mechanics 17,330 19,215 1,885 10.9% 5,365 $37,530 Bus/Truck Mechanics 3,360 3,840 480 14.3% 1,210 $43,450 Heating and AC Installers 7,500 8,625 1,125 15.0% 2,440 $44,660 Heavy Equipment Mechanics 2,185 2,445 260 11.9% 690 $42,840 Industrial Machinery Mechanics 3,020 3,450 430 14.2% 940 $46,560 Transportation Commercial Pilots 175 190 15 8.6% 65 $54,830 Heavy Truck Drivers 26,905 29,595 2,690 10.0% 7,465 $37,770 Public Safety Emergency Medical Technicians 3,330 3,895 565 17.0% 945 $39,060 Fire Fighters 5,360 5,880 520 9.7% 2,470 $47,360 Police Officers 17,505 19,135 1,630 9.3% 6,310 $51,310 Other Architectural Drafters 1,665 1,775 110 6.6% 590 $42,690 Claims Adjusters 7,500 7,565 65 0.9% 1,975 $53,950 Civil Engineering Technicians 2,095 2,350 255 12.2% 660 $48,050 Legal Secretaries 3,700 4,125 425 11.5% 1,010 $39,470 Machinists 3,805 3,760-45 -1.2% 590 $42,390 Paralegals 5,680 6,810 1,130 19.9% 1,875 $47,090 *2007 median annual earnings for all occupations in Maryland = $36,350 Source: Projections data tabulated using Maryland Department of Labor, Licensing, and Regulation data. Median Earnings data from the Bureau of Labor Statistics. 12
HIGHLIGHT 4 The Middle of the Green Revolution More than ever before, policymakers and business leaders are paying attention to clean energy industries and technologies, which promise profound environmental and economic benefits for all Americans. One of the highest priorities in federal and state economic recovery policies has been strong investment in creation of a green economy and green jobs. But what are those jobs? A recent report by the Center on Wisconsin Strategy, the Apollo Alliance, and National Skills Coalition (formerly The Workforce Alliance) found that the skills needed in the green economy closely mirror the middle-skill demands of the labor market as a whole. Greener Pathways examines emerging opportunities in the energy efficiency, wind, and biofuels sectors, and urges stakeholders to scale up green job training by leveraging existing state and local workforce development systems. 12 Green Jobs are Middle-Skill Jobs FIGURE 3. U.S. Employment in Green Industries by Skill Level, 2004 Middle-Skill 66% High- Skill 13% Low-Skill 21% Middle-Skill 71% High- Skill 7% Low-Skill 22% Middle-Skill 56% High Skill 12% Low-Skill 33% Energy Efficiency Wind Biofuels Source: Tabulated by National Skills Coalition from the US Bureau of Labor Statistics website. In 2008, the Maryland Governor s Workforce Investment Board organized an Energy Initiative Steering Committee to analyze workforce demand and supply, and to develop strategies and policies that will assist the Governor, Maryland s workforce system and the industries of the green economy to meet workforce needs. Training initiatives to fill middle-skill jobs in the green economy are already underway in Maryland. The Maryland Energy Administration (MEA), the Department of Housing and Community Development (DHCD) and a consortium of five of the state s larger community colleges have created the Maryland Weatherization Training Program for home energy auditor and weatherization technicians. 13
MARYLAND S MIDDLE-SKILL GAP PAST AND FUTURE Maryland s economic recovery and long-term future depend in part on ensuring an adequate source of skilled workers to fill middle-skill jobs. Those middle-skill jobs are going to comprise the main portion of employment and worker-generated economic activity in the state. Maryland has been experiencing a shortage of middle-skill workers (Fig. 4). In 2007, about 47 percent of all jobs were classified as middle-skill, but only 37 percent of Maryland workers had the education and training required to fill those positions. In reality, the gap was likely even greater in certain industries because many workers trained to the middle-skill level and even those with bachelor s degrees did not have the specific technical skills needed. This means that thousands of well-paid and rewarding jobs were going unfilled in the state, in industries that are and will be essential to Maryland s economic portfolio. Maryland s Skills Mismatch: A Middle-Skill Gap FIGURE 4. Maryland s Jobs and Workers by Skill Level, 2007 High-Skill Jobs High-Skill Workers 34% 42% Middle-Skill Jobs Middle-Skill Workers 37% 47% Low-Skill Jobs 19% Low-Skill Workers 21% Sources: Maryland Department of Labor, Licensing, and Regulation & US Bureau of the Census While Maryland, like the nation, is experiencing high levels of unemployment due to the current economic downturn, as the state moves into recovery employers will once again face the challenge of finding qualified middle-skill workers. This could inhibit economic growth. What s more, as federal Recovery Act dollars continue to flow to the states, a major portion of the resulting job growth will be at the middle-skill level, making middle-skill training a key piece of the recovery puzzle. Guaranteed access to middle-skill training is a crucial investment right now to ensure the state s workforce will be trained and ready to be part of the economic recovery. Maryland s middle-skill challenge is exacerbated by problems at both the high and low ends of the skills spectrum. At the high end, education policies that focus exclusively on four-year college degrees mean that as baby boomers retire and younger workers get older, the share of 14
middle-skill workers available will fall, even as demand for those workers rises. At the low end there are a growing number of residents who lack the basic reading, math and other basic skills needed to qualify for middle-skill training programs. Greater Pain in High Demand Industries State and regional data underscore the challenges facing Maryland. In addition to the demand for middle-skill workers in STEM occupations mentioned above, Maryland s manufacturers, health care providers, and information technology industries show robust demand for middle-skill workers. A recent report from the Manufacturing Steering Committee of the Governor s Workforce Investment Board found that the growth potential of advanced manufacturing in Maryland is significant. In 2008, manufacturing in Maryland accounted for over $15.2 billion of the state s Gross Domestic Product, an increase of 19 percent from 1997. The report cited a number of manufacturing occupations expected to see growth in the next ten years, many of which require middle-skill credentials. 13 Maryland manufacturers, like those across the nation report challenges to finding middle-skill workers trained in advanced manufacturing processes. A 2008 report from the National Association of Manufacturers found that more than 80 percent of U.S. manufacturers report an overall shortage of qualified employees that is affecting their ability to meet customer demands. Nearly half of small and medium manufacturers report that finding qualified employees is one of the most serious problems facing their company. 14 Maryland s healthcare industry remains one of the few stable industries in the state during the current recession and continues to face a shortage of nurses, as well as other healthcare technician occupations. The state is projecting shortages in middle-skill occupations such as surgical technologists, respiratory therapists and technicians, radiologic technicians, physical and occupational therapy assistants, medical record technicians, medical and clinical laboratory technicians, and dental hygienists. 15 These industries, which already have a strong presence in Maryland, are some of the same industries expected to see growth as a result of Recovery Act job creation, suggesting they could face even greater challenges in finding middle-skill workers in the near future. Maryland Educational Projections: A Continuing Middle-Skill Challenge Maryland educational projections (Figs. 5, 6 and 7) suggest that the state is likely to see a shortage of middle-skill workers in the future. During the fifteen years between 1990 and 2005, the state saw an increase in residents with educational attainment at the high-skill level and a decrease in those at the low-skill level. Residents with middle-skill education also fell. Maryland s projected education trends for the subsequent fifteen years suggest that middle-skill worker shortages will continue. The proportion of high-skill workers in Maryland s workforce is likely to fall slightly and the percentage of middle-skill workers is projected to increase only slightly. Immigration trends will do little to boost this minor increase in middle-skill workers, as most workforce growth in the state due to in-migration will likely occur at the low-end of the skill spectrum or at the high-end of the skill spectrum (for example, engineers brought in from overseas through H-1B visas). If not addressed, these educational trends will only make it harder for Maryland businesses to meet their needs from the state s available workforce, stifling economic recovery and growth, while limiting opportunity for thousands of Maryland workers to advance within the state s economy. 15
Maryland s Future Middle-Skill Gap: Educational Attainment Past and Future FIGURE 5. Percentage Change in High-Skill Maryland Workers, 1990-2020 1990-2005 8.7% 2005-2020 -1.0% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% The number of workers prepared for high-skill jobs rose by nearly nine percent between 1990 and 2005. Their ranks are expected to fall by one percent by the year 2020 (Fig 5, Table 4). FIGURE 6. Percentage Change in Middle-Skill Maryland Workers, 1990-2020 1990-2005 -1.8% 2005-2020 0.7% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% The number of workers prepared for what is the largest share of jobs in the state middle-skill jobs fell by nearly two percent from 1990 to 2005. Their ranks are projected to rise less than one percent by the year 2020 (Fig 6, Table 4), even as demand for those jobs increases at a higher rate. FIGURE 7. Percentage Change in Low-Skill Maryland Workers, 1990-2020 1990-2005 -6.9% 2005-2020 0.3% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% After falling by nearly seven percent since 1990, the number of workers prepared for low-skill jobs is expected to rise almost imperceptibly by the year 2020 (Fig 7, Table 4). Sources, Figures 5-7: 1990-2005 attainment calculated by National Skills Coalition using December 1990 and 2005 CPS data. Current attainment calculated by National Skills Coalition using December 2005 CPS data.. 2020 attainment projected by National Skills Coalition using demographic data from the December 2005 CPS and population projections calculated by RAND California Statistics. 16
TABLE 4. Actual and Projected Change in Maryland Workers across Skill Levels, 1990-2020 Change Change 1990 2005 2020 1990-2005 2005-2020 Low-Skill 29.9% 22.9% 23.2% -6.9% 0.3% Middle-Skill 40.2% 38.4% 39.0% -1.8% 0.7% High-Skill 30.0% 38.7% 37.7% 8.7% -1.0% Low-Skill 788,537 662,959 762,539-125,578 99,580 Middle-Skill 1,060,377 1,109,672 1,282,470 49,294 172,799 High-Skill 790,981 1,119,510 1,239,431 328,530 119,920 Total 2,639,896 2,892,140 3,284,440 252,246 392,299 Source: Current and past attainment calculated by National Skills Coalition using December 1990 and 2005 CPS data. Current and past total labor force estimated by the Maryland State Data Center. 2020 attainment projected by National Skills Coalition using demographic data from the December 2005 CPS and population projections calculated by RAND California Statistics. The Middle-Skill Gap and Maryland s Future Workforce Maryland cannot address its middle-skill challenges by focusing its education and training dollars solely on the next generation of workers who are coming out of high school. The fact is that nearly two-thirds of the people who will be in Maryland s workforce in the year 2020 were already working adults in 2005 long past the traditional high schoolto college pipeline (Fig. 8). Maryland should take proactive policy actions to realign its workforce and education resources to better meet the state s labor market demand. This also must include major investments in training programs that will prepare many more Maryland residents who are now at the low-skill level for middle-skill jobs and careers. Maryland s Workforce of Tomorrow is in the Workforce Today FIGURE 8. Working Maryland Adults Age 20-64 in the Current and Projected Population, 2005-2020 2005 2005 workforce (3,231,962 workers) 2010 400,908 2005 workforce is 88% of 2010 workforce (2,954,369 workers) 2015 827,355 2005 workforce is 76% of 2015 workforce (2,617,355 workers) 2020 1,267,077 2005 workforce is 64% of 2020 workforce (2,207,420 workers) Source: Calculated by National Skills Coalition using population projections from RAND California Statistics. 17
An Even Greater Basic Skills Crisis? As Holzer and Lerman point out in America s Forgotten Middle-Skill Jobs, the data supporting education demand projections probably underplays the need for more broadly based basic skills education nationally. 16 Despite the increases in U.S. educational attainment over the last twenty years, the National Assessment of Adult Literacy (NAAL) indicates only a slight increase in quantitative (math) skills between 1992 and 2003, and no improvement at all for prose and document literacy. Nationally, 93 million adults lack the literacy to participate in postsecondary education and training. This means that tens of millions of Americans cannot access middle-skill education and training programs because they lack basic English and math skills, or do not have a high school education. Even for those who enter postsecondary education, basic skills can be a barrier to success. Nearly two-thirds of two year college students must take at least one remedial course. 17 Like the nation as a whole, Maryland faces substantial challenges when it comes to basic skills. In 2003, eleven percent of Marylanders lacked basic prose literacy skills. 18 Over 730,000 Maryland residents do not have a high school diploma or have limited English speaking ability. 19 Only 7 percent of Maryland adults with less than a high school diploma are enrolled in adult basic education, and only 9 percent of Maryland residents with limited English proficiency are enrolled in English as a Second Language (ESL) classes. 20 Like the national picture, basic skill challenges face Marylanders who are able to enroll in postsecondary education. In 2004-2005, 36 percent of Maryland s two- and four-year college students were enrolled in remedial math, 17 percent in remedial English, and 20 percent in remedial reading. 21 Finally, basic skill challenges face many Marylanders who may be trained already to fill highdemand middle- and high-skill jobs, but lack the necessary English language skills. Between 2000 and 2008, immigrants accounted for more than half of Maryland s population growth. Many highly skilled immigrants in Maryland work in unskilled jobs because they lack the essential English skills to enter high-demand jobs for which they are occupationally trained. 22 This evidence suggests that Maryland faces challenges in meeting the basic skill attainment levels needed to grow its middle-skill workforce. With the right basic skills training, many more Marylanders could prepare to enter and succeed in middle-skill training and middle-skill jobs. Recognizing these challenges and opportunities, Maryland s Governor Martin O Malley proposed moving the state s adult education system under the state s workforce system to align adult basic education and workforce skills training. In the spring of 2008, the General Assembly approved legislation that laid the groundwork for that realignment. The move will create a learning continuum that better aligns adult education, skills training and access to actual job openings. It also is expected to increase access to education and training for low-skill adults by leveraging the funds and resources available in both the adult learning and workforce systems. 18
CLOSING THE GAP The Face of Middle-Skill Education and Training Who provides training and education for middle-skill jobs? The good news for Marylanders is that there are many different options. While education for high-skill jobs is limited to college or post-graduate degrees, education for middle-skill jobs can come in many different forms (Table 5). The most commonlyknown setting is community and technical colleges, but they are not the only place. Middle-skill education and job training programs include occupational certificates, associate s degrees, apprenticeship programs and can be found in many different settings, including community and technical colleges, community based training organizations, private career schools, and workplaces. An associate s degree allows students to enter the workforce immediately upon completion of the degree. Associate s degrees are generally required for occupations such as licensed practical nurse, radiation therapist, and computer specialists. Vocational certificates guarantee certification of the knowledge and skills needed to perform the duties of a given occupation, according to regulations or nationally accredited standards. They generally require less classroom time than associate s degrees, offering a path for individuals to develop and verify specific skills sets. They are also extremely useful for individuals already in the workplace as a means of reinforcing existing skills sets and acquiring new skills. Examples of jobs where a vocational certificate could be valuable include dental and legal assistants, auto mechanics and fire fighters. Apprenticeships are supervised employment programs that combine classroom instruction and on-the-job training. Generally offered directly by employers or through labor/management partnerships, apprenticeships can be found in such high-demand careers as electrician, aircraft mechanic, or plumber. There are Many Different Pathways to Middle-Skill Jobs TABLE 5: Types of Training Programs for Middle-Skill Jobs Associate s degree Vocational certificate Apprenticeship Time to complete Two years, full time Up to a year Two to four years Availability Community college, Community college, Partnership between private career school community-based unions and employers organization, technical school, workplace Examples of Licensed practical nurse, Dental assistant, legal Electrician, aircraft types of jobs radiation therapist, assistant, auto mechanic, mechanic, plumber computer specialist firefighter 19
For workers whose basic skills are not at a level that allows them to enter these types of education and training programs, there are program options that teach English, basic reading and math skills in the context of occupational skills. These programs often connect to a specific job that is on a defined career ladder or else to further education that results in a middle-skill credential. In order to develop Maryland s middle-skill workforce to meet the demands of the economic recovery and beyond, the state should target resources toward a variety of middle-skill and basic skill training programs. Maryland can continue to build more flexible, demand-driven systems that allow working adults to return to training and education from time to time, to upgrade their skills and to earn additional certifications and degrees. Maryland has a number of exemplary middle-skill education and training opportunities that can serve diverse populations. These are just a few examples: To address the needs of adults with limited English as well as the state s nursing shortages, the Montgomery County Latino Healthcare Initiative, Holy Cross Hospital, Montgomery College and other local partners developed a pilot program for licensure of foreign-trained nursing professionals. Entry-level workers with limited basic skills can enroll in the Pre-Allied Health Bridge Program offered by several Baltimore hospitals in partnership with the Baltimore Alliance for Careers in Healthcare. The program provides basic skills instruction in the context of occupational learning. This allows participants to enter postsecondary training that results in recognized certifications in the allied health field. The BioTechnical Institute of Maryland s Laboratory Associates Program provides tuition-free training in basic laboratory skills to unemployed and under-employed Maryland residents, offering them a chance to be a part of the state s solution to STEM workforce shortages. For high school students interested in the possibilities of high-demand hands-on careers, Maryland s Career and Technical Education program in the state s high schools prepares students for both postsecondary education and careers in middle-skill occupations. CTE enrollment in Maryland grew by 7.6 percent between 2006 and 2007. A 21st-Century Skill Guarantee If Maryland is to realize its full economic potential, educational access must reflect the demands of a 21st-century economy and the realities of the 21st-century workforce. Given that the largest portion of Maryland jobs are at the middle-skill level and the majority of future workers are already in the workforce today: Every Marylander should have access to the equivalent of at least two years of education or training past high school leading to a vocational credential, industry certification, or one s first two years of college to be pursued at whatever point and pace makes sense for individual workers and industries. Every person must also have access to the basic skills needed to pursue such education. It s an ambitious goal, but not an unprecedented one. Throughout the nation s history, federal and state policymakers have elevated educational guarantees to meet the changing skill requirements brought on by economic and technological change. And, indeed, leaders in 20
Maryland have already taken some steps to address similar challenges in the 21st century. But there is more to be done. Historical Precedents As the nation transitioned from an agricultural economy to an industrial economy in the midnineteenth century, policymakers across the United States realized that a broader skill set was required from a much greater segment of the population. This was one important factor in the development of the high school movement to provide a free public education to all citizens. Between 1910 and 1930, the proportion of seventeen-year-olds in secondary education increased from less than 9 percent to 30 percent, fueling the expansion of America s great cities and industries. By the late 1990s, nearly 70 percent of U.S. students were graduating with a high school diploma. Universal secondary education is now understood as one of the fundamental guarantees the U.S. makes to its citizens. By the middle of the 20th century, society realized that postsecondary education and training would allow the United States to flourish. This was the atmosphere in which the GI Bill was passed in 1944. Between 1944 and 1956, nearly 8 million returning servicemen and servicewomen used the GI Bill. People pursuing four-year college degrees accounted for about a quarter (2.2. million) of those benefiting from the program. But a much larger and typically forgotten 6 million GIs pursued middle-skill training. As such, a broad-based investment in middle skills was a major part of America s post-war prosperity. State Skill Guarantees Unfortunately, more recent federal investments in postsecondary education and job training have been in decline. The Recovery Act makes significant contributions to those education and training programs, but it constitutes a one-time, relatively short term investment. The overall long-term trend has been downward. However, some forward-thinking states and policymakers have been making vital commitments to the skills and economic security of their citizens, recognizing that a new minimum level of skills and education should be made available to state residents. For example, the Georgia HOPE Grant program, funded with lottery proceeds, pays tuition, fees, and up to $300 for books for Georgia residents to earn a certificate approved by the state Department of Technical and Adult Education (or a comparable program of study approved by the Board of Regents) in a public technical college or public college or university. The HOPE Grant program does not have income- or merit-based criteria for eligibility (although recipients must make satisfactory academic progress while receiving it) and allows part-time attendance. According to the state Department of Technical and Adult Education, enrollment in public technical colleges has increased by 110 percent since the HOPE program began. In 2007, Michigan Governor Jennifer Granholm announced the creation of the No Worker Left Behind program in her State of the State address. The program, officially launched in August 2007, pays tuition of up to $5,000 per year for two years for 100,000 Michigan workers to pursue a degree or certificate at a community college, university, or other approved training program in a high-demand occupation (determined on a regional basis). The state reprogrammed $40 million in federal funds primarily from the Workforce Investment Act and Trade Adjustment Assistance programs to support the initiative. The separate Michigan Promise program guarantees every new high school graduate a $4,000 scholarship for completing two years of postsecondary education at an eligible state institution. 21
In Washington, the state legislature in 2007 authorized $11.5 million per year for the Opportunity Grant program, which covers tuition for up to 45 academic credits at any state technical or community college, and up to $1,000 per year for books and supplies. Any Washington resident student with a family income at or below 200 percent of the federal poverty level is eligible to participate in the program. The Opportunity Grant model was constructed to help nontraditional students advance into high-demand, high-wage job opportunities. Opportunity Grants can be used toward completion of credentials, certificates, and apprenticeship programs in occupations where local and regional employer demand exceeds the supply of qualified applicants. Eligible programs must be linked to educational and career pathways, and colleges must demonstrate that there are jobs available for program graduates that pay at least $13 per hour. In addition, schools must demonstrate that local businesses, labor groups, and other community stakeholders are active in supporting the creation or expansion of the program. For adults who cannot take advantage of the Opportunity Grant program because their basic skills are not at a sufficient level to immediately enter a postsecondary program, Washington State s nationally acclaimed IBEST initiative allows adults to learn basic skills while earning credentials for high-demand jobs with opportunities for educational and career advancement. The Benefits and Returns of a 21st-Century Skill Guarantee The potential benefits and returns of a 21st-century skill guarantee are widespread. Guaranteeing up to two years of postsecondary education and training will benefit the individuals who get that training, strengthen the productivity of the state economy, and could increase public resources. Simply put, more education means greater participation in the workforce and higher lifetime earnings. A recent examination of Maryland s adult learners found that about 85 percent of adults with an associate s degree and 83 percent of adults with some college (but not a degree) participated in the workforce, compared to only 79 percent of adults with a high school education and 62 percent of adults with less than a high school education. 23 In addition to higher work participation rates, Maryland adults with some college averaged about $301,000 more in lifetime earnings than those with only a high school education, and adults with an associate s degree averaged about $503,000 more in lifetime earnings. These findings are consistent with those of Holzer and Lerman who found that nationally, the median worker with an associate s degree earned about 33 percent more than a worker with only a high school degree, while workers with a bachelor s degree earned about 62 percent more than workers with only a high school degree. 24 These studies indicate not just that postsecondary education provides a significant earnings advantage for workers, but also that on a per-year basis, benefits for workers receiving a two-year degree are comparable to those receiving a four-year degree. More education also is associated with lower unemployment. Nationally, in December 2009 unemployment for workers with less than a high school diploma was nearly 15.7 percent. For those with a high school diploma it was 10.6 percent, while for those who d completed high school plus some college our middle-skill level the unemployment rate was 8.5 percent. 25 A guarantee of access to at least two years of postsecondary education for all workers would increase productivity and earnings in Maryland. According to the Organization for Economic Cooperation and Development (OECD), each year of postsecondary education leads to an increased per capita output of between 4 and 7 percent. 26 Increasing the average total schooling of a city s population by two years increases the wages of all workers by about 6 percent, 22