By Kathleen Eischeid, Edcor Business Development Coordinator
During the best economic times workers benefit from the economic advantages of higher education attainment. Workers who have attained higher education have greater job stability, generally earn higher salaries and have better benefits than those who do not have postsecondary education. During an economic downturn the advantages of higher education attainment are even greater.
Unemployment rates are rising rapidly. In March, before the COVID-19 pandemic caused an economic crisis, the total unemployment rate was 4.4 percent. In April, one month later, the Bureau of Labor Statistics reported 20.5 million job losses; the employment rate reached 14.7 percent. Unemployment doesn’t affect all the population equally. Unemployment hits some population groups much harder than others. Workers with a high school education have unemployment rates of 17.3 percent and workers with some college have employment rates of 15 percent. Workers with a bachelor’s degree have employment rates of 8.4 percent.
These unemployment rates are five times worse that they were a year ago in April 2019 and the number of people unemployed is much higher than in the recession following the 2008 economic crisis. During that time unemployment for workers with a bachelor’s degree or higher was never higher than 5 percent or higher than 8.9 percent for people with some college or an associate’s degree.
The ability to continue working during a crisis is closely associated with levels of education, says Paul Harrington, director of the Center of Labor Market and Policy at Edcor partner school Drexel University. The rate of job losses for college graduates is about half of the rate of job losses for those with a high school education. Workers in fields such as finance, professional and technical services can adapt their work to remote locations, and do their work without the need for face-to-face interactions. These workers also see the advantages extend into recovery beyond the crisis.
A slow recovery could be in the US future, caused by fear of contracting the coronavirus. This may affect service industries that employ workers with lower levels of education. People may be hesitant to resume normal activities and engage face-to-face, says Madhavi Bokil, Moody’s Investors Service vice president. “Employment gains may be even slower than we anticipate as demand for leisure, entertainment retail and travel will not normalize quickly.” The coronavirus could also change many production jobs on a permanent basis. The Brookings institution predicts that automation will change food-service, production and transportation jobs. This will affect many low-wage workers that do not benefit from the economic advantages of higher education attainment.
Now is the time for all employers and workers to evaluate the advantages of higher education attainment. Workers will have more employment opportunities and stability. Businesses can also create strategic advantages and develop a prepared workforce by providing education benefits for their employees. Businesses generally automate and streamline work during recessions. Preparing workers to deal with new technology and changes will ensure that employees are effective and meet company goals. Tuition assistance that Edcor clients offer to employees will certainly help these businesses achieve economic recovery. Companies that offer assistance for varied degree and higher education certificates will have strong workforces. They will be at the forefront of applying strategic development tools and reaping the economic advantages of higher education attainment among their employees.
Matt Sigelman Burning Glass Technologies CEO says, “To be sure, the layoffs are widespread across multiple industries, but it is clear that lower-skilled jobs are among the first to be eliminated and, more than likely, they will be the last to return. We’re watching the need to retrain accelerate. “What we need to be doing, right now, is focusing on how we win the recovery. This is the time when we need to make sure that we have a tremendous investment being made in how we reskill people.”
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