Labor Day is a time to salute the workers in our country. The people who are the labor force play a vital role in making America competitive in the global economy. They are the workers who face changes and challenges as new technology requires them to have new skills. They are the workers who often are earning and learning at the same time, as they continually seek higher education to meet employer demands. They are the workers who often find that the level of higher education they have attained determines their position in the labor force.
The labor force participation rate is the percentage of working age people who are actively participating in the labor force. It includes people who work for an employer or are self-employed and people age 16 or older who are available for work and have tried to find a job.
For both men and women, attaining higher education is a factor in being able to compete in the labor market and participate in the labor force. According to the Census Bureau, in 1940 only 5 percent of adults had a bachelor’s degree. But that has changed dramatically. The Congressional Budget Office reports that between 1990 and 2017:
• The share of men with at least a college degree increased from 27 to 33 percent
• The share of women with at least a college degree increased from 23 to 38 percent
To fully participate in the labor market individuals need to seek out and attain higher education. The CBO predicts that more people will continue to attain higher education, and that this will increase labor force participation more than if people didn’t attain higher education. “As more people participate in the labor force, firms are able to expand employment and increase production.”
People who have attained higher education and have the right skills to adapt to new technologies will expand employment and increase production.
Employer sponsored tuition assistance programs are a strategic vehicle for businesses to ensure their workers have the proper skills, avoid worker shortages and increase productivity. Employer TAP can make it possible for workers to fully participate in the labor market. Tuition assistance is important because with technological changes, the CBO states, there is a “tendency for advances in technology to enhance the productivity and wages of workers who have certain skills while reducing the demands for those who don’t. Unskilled workers are left with the choice of accepting the fact that labor force participation has fallen more for workers with lower levels of education attainment.”
During the recovery from the Great Recession most of the jobs created required higher levels of education than previous jobs. Workers need training and retraining so they can adapt to new demands and changes in their work environment. Workers’ education level often impacts their job opportunities and labor market participation. The CBO reports that in 2017:
• The participation rate of men 25-54 with at least a bachelor’s degree was 9 percentage points higher than for men without a degree.
• The participation rate for women 25-54 with a bachelor’s degree was 13 percentage points higher than for women without.
It is important for businesses to keep pace with new technologies, improve their production methods and maintain a workforce that is educated and has the right skills. It is equally important for individuals to be sure they have the education that will prepare them to be a vital part of the labor force. Employer tuition assistance plans are the most effective tool to make this happen and assure that both businesses and the labor force can thrive.
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