College costs are up, but so are returns (opinion)

What is the biggest problem facing college students today? Cost is a big concern, of course, for good reason. But many can point to something that worries them in common—misconceptions about the value of a college degree. That’s not surprising when reasonable questions are raised about whether graduates are good for the job—and when too many jobs need diplomas unnecessarily.

There has long been a paper ceiling that penalizes unqualified applicants. And more and more companies are now taking a closer look at so-called STARs—people with skills in alternative routes.

The group Tear the Paper Ceiling says 61 percent of black workers, 55 percent of Hispanic workers, 66 percent of rural workers and 62 percent of veterans are considered Stars. They learn important job skills through military service, certification programs, on-the-job training and boot camps. But often, they have been unfairly excluded.

I applaud the work of this national team and its colleagues. Barriers to employment equity are real. Only half of the working-age population has quality degrees or other credentials beyond high school, just as millions of jobs go unfilled in part because applicants lack the necessary background or credentials. It makes sense to make sure we don’t leave behind neighbors who are talented but unqualified.

But take a deeper look to understand that this is not just about expanding the opportunity and filling today’s open jobs, but the jobs that the technology-driven, increasingly connected world will demand in the coming years. Talent-based hiring is a great idea, but it will not by itself come close to solving the nation’s talent crisis. Increasing the quality of higher education by ensuring that more people receive better credentials—information of value—is key.

The Basis for Growth

Higher education has always been about producing job-ready graduates, not just jobs. This is important because a person who has applied for a good position can now face the challenges of moving to better and higher paying positions because they do not have the foundation for job growth that is encouraged in postsecondary programs.

The American Association of Colleges and Universities has surveyed officials and hiring managers eight times since 2006. A recent survey, from 2023, found that 80 percent of employers strongly or somewhat agree that college prepares people for success in the workplace. Getting a degree is worth the time and money, respondents suggested, as the survey “found a strong correlation between liberal education outcomes and the knowledge and skills employers consider important for success in entry-level jobs and advancement in their careers.” companies.”

There will always be conflicting data points at times of change. For example, the push for skills-based employment, including at the state level, is opening the doors to many good jobs that historically required a college degree. However, research by Harvard Business School and the Burning Glass Institute shows that college graduates still have a good chance when it comes to finding jobs with higher salaries and better benefits.

It turns out that employers aren’t committing to skills-based hiring to the degree that recent headlines might suggest. A Harvard–Burning Glass report tracked more than 11,000 jobs where a bachelor’s degree is no longer required in the job description. It found only a 3.5 percent increase in the share of those without degrees employed in those roles—a seemingly low number that suggests the clamor for skills-based hiring may be more intense than usual.

Lifetime Payment

These and other signs reinforce the enduring importance of degrees: A recent report from Georgetown University’s Center for Education and the Workforce found that 72 percent of jobs in the United States will require education or training after high school by the year 2031. This center also. found:

• People with a bachelor’s degree earn, on average, $1.2 million more over their lifetime than those with only a high school education.

• Of the 18.5 million job openings we anticipate in the coming years, more than two-thirds will require at least a college education.
• Earnings for people without a degree have been rising for the past decade, but so has the pay for those with a degree. Although people without degrees earn more money, they are still not as good as those with diplomas.

Hard Skills Are Important

Employers often say they want “long-lasting” skills, such as critical thinking, communication and problem solving.

Someone looking to hire an entry-level software developer might consider a candidate with skills in Python or other programming languages ​​developed through informal learning. Many gifted techies are either self-taught or developed through coding boot camps or working at startups, for example.

But a college graduate with similar skills may stand out because of their experience working in teams to complete projects, their communication and presentation skills, analytical thinking, and other traits encouraged in college classes.

The takeaway: Everywhere, we need better definitions of what our credentials mean. What defines a price guarantee, exactly, and how do we ensure that people who receive books can do future work?

Indeed, our fast-moving, technology-driven economy increasingly rewards creative problem solvers. According to the World Economic Forum’s 2023 Future of Jobs report, employers estimate that 44% of workforce skills will be disrupted in the next five years.

“Cognitive skills are reported to be growing in importance very quickly, reflecting the increasing importance of solving complex problems at work,” the report said. “Businesses surveyed report creative thinking is growing in importance faster than analytical thinking.”

There are many implications for this change. Embedded in tuition fees is the problem of inequity when it comes to who goes to college and how we support them. The Georgetown Institute has long reported on the importance of college degrees and the persistent gaps in opportunity for women and people of color.

A Nation Ready to Change

Whatever the impact of skills-based hiring on the nation’s labor shortage, it shouldn’t stop there. Addressing long-standing inequalities in higher education and the workforce means ensuring that these skills-based pathways include opportunities for all workers, especially when it comes to further education and training after entering the workforce.

Skill-based employment and the drive for incremental gains are not opposing forces. They are aimed at ensuring that the nation grows and uses the talent it needs to be prepared for the workforce of the 21st century, and to reap the social and economic benefits that people with well-paying jobs bring to their communities.

Ultimately, this is about more than our students’ career readiness. We are talking about change readiness of our entire nation in a rapidly developing economy. It makes sense to update work requirements to meet the needs of the workforce, but there is no denying that we will need a more educated country to build if we are to bring fair opportunity and economic prosperity to all.