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College degrees lose their mojo

Last year, the State of Michigan announced that it would stop requiring college degrees for most state jobs. The idea is that the lack of a college degree eliminates many otherwise qualified applicants from consideration. By removing degree requirements wherever possible, the State is attempting to increase the pool of applicants for its open positions.

The State of Michigan is not the only entity that’s relaxing degree requirements. Private employers like Google are also shifting their HR focus from academic credentials to skills wherever possible.

That movement may or may not be good news for community colleges. For many people, associate degrees don’t count as college degrees, so the movement may open doors for workers whose highest educational attainment is a two-year degree. For workers who don’t have the desire, time, or money to return to school, there may be fewer option to increase their earning potential.

Researchers from the Philadelphia and Cleveland Federal Reserve Banks analyzed employers’ most requested skills in 7 dozen of the largest metropolitan areas in the United States. The goal of the analysis was to create pathways for low skill workers to increase their incomes based on skills they already possess.

The result of the analysis is the Occupational Mobility Explorer. The tool, which is available online at the Philadelphia Fed, debuted I 2020. If you haven’t seen the tool, it’s worth taking the time to see how skills from one job may map to skills needed for higher paying work. Within 3-4 steps, a low-wage worker can often shift to a job that pays well enough to enter the middle class.

College degree not needed for economic mobility

This is the kind of career advising that students should be receiving in high school. Having a post-secondary plan is critical, regardless of whether or when the student plans to continue their education.

So, according to the Occupational Mobility Explorer, what’s a viable path from minimum wage to the middle class and how long will it take?

If our hypothetical worker starts out as a cashier in Southeast Michigan, the worker can expect to make about $16,000 per year. The tool assumes that the worker will not work full-time hours and will be paid Michigan’s minimum wage – currently $10.33 per hour.

If our objective is to transition our cashier from their current position to the highest-paying position that uses a cashier’s skill set, there are three possible position upgrades that immediately move the cashier into the middle class These jobs include Securities, Commodities, and Financial Services Sales Agent at $49,400; Sales Representative (for all other services) at $57,400; First-Line Supervisor of Non-Retail Workers at $79,150. The position whose required skillset is most similar to that of a cashier is the Securities, Commodities, and Financial Services Sales Agent at 68%. The skill set for the other two positions are 65% and 64% similar.

If we choose the position with the most similar skill set – even as the lowest-paying of the three middle class jobs – the cashier still increases his or her salary by more than 200% by taking that position.

The pressure is on community colleges to produce high-wage, high demand programs

The next step in our cashier’s career progression will allow the worker to earn even more money, but the connection to the existing still set becomes a little more tenuous. To ensure that our cashier has the highest likelihood of landing a new, higher paying position, we’ll aim to retain as much crossover in the required skill set as possible. From the cashier’s work in the financial sector, our worker can now transition to being a loan officer at a bank. That move will increase the worker’s salary by one-third and will still retain two-thirds of the skills needed for work in the financial services sector, and one-third of the skills needed to be a cashier.

The final step in the cashier’s progression leads to either sales or managerial positions and increases the cashier’s salary to somewhere in the range of $78,000-$103,000 per year. In a relatively short time frame, a worker can progress from minimum wage to an $80,000+ career without a college degree.

This kind of mobility is good for the worker but may not be as good for community colleges. This is especially true of the community college is heavily invested in training people for low-wage work. It raises the serious question of why anyone would want to earn a two-year degree when they can achieve relatively good economic mobility through skills alone.

It also puts additional pressure on community colleges, whose certificate programs are now subject to the Department of Labor’s gainful employment rules. If a high school graduate can make a middle class salary, that raises the bar all that much higher for certificate programs. The new and improved economic mobility of high school graduates also underscores the real need for community colleges to shift to high-wage, high demand programs.

Photo Credit: jpmatth , via Flickr