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Community College Degrees Put Graduates At Economic Disadvantage

A report released yesterday by Opportunity@Work suggests that half of the US workforce has experienced downward mobility as a result of not having a bachelor’s degree. The report calls people who develop employable skills without attending a university “Skilled Through Alternative Routes” (STAR). I should point out here that community college degrees are considered an alternate route for skill acquisition. In addition, military service, bootcamps, training programs and on-the-job training fall into this classification.

Opportunity@Work is a non-profit think tank that aims to connect skilled workers with tech jobs, with a special focus on non-degreed workers. According to Opportunity@Work, employers routinely screen out employment candidates who do not have at least a bachelor’s degree. This creates an “opportunity gap” for STARs and leaves tech industry employers without enough workers to fill open positions.

In prior work, the non-profit analyzed data showing that millions of STARs can perform at a high level. Since they lack a bachelor’s degree, which may be an arbitrary minimum qualification, they cannot find the higher paying jobs for which they are qualified.

The net result is that STARs miss economic opportunities that lead to higher wages and upward economic mobility. In the past two decades, the share of high-wage tech jobs filled by these candidates has fallen from 54% to 46%. That’s problematic because during this period, employers created more than 17 million new tech jobs. Candidates without bachelor’s degrees filled less than 10.5% of them, meaning that millions of skill-qualified workers exited the middle class.

Community college STARs Miss Out On Prime Earning Years

According to the report, it takes a STAR-qualified worker an average of 30 years to reach the starting wage of a recent university graduate. Under these circumstances, it is obvious why fewer people choose to enroll in a community college. In the US, workers typically achieve their prime earning potential between the ages of 35 and 54. If it takes a 20-year-old community college graduate another 30 years to make the same annual salary as a 22-year-old who just graduated from a university, the community college graduate misses a minimum of 15 years of “peak earnings.”

If that’s the case, community college graduates are at a significant economic disadvantage for most of their careers. That means lower annual earnings, lower asset accumulation and lower retirement savings. It also likely eliminates early retirement and generates a lower Social Security benefit when the worker is eligible to retire.

Cranking out thousands of minimally trained certificate holders when employers think they need candidates with bachelor’s degrees doesn’t help. In fact, it will consign those graduates to a literal lifetime of low-wage jobs.

Misclassifying the educational qualifications for a position all but guarantees that employers will overlook adequately skilled community college graduates. A better strategy is to work with employers to help them understand the skills their open positions require.

Clearly, employers value more education, not less. Community college administrators must do more work to create pathways for students to access high-wage jobs that enable economic mobility.

Photo Credit: Alvin Trusty , via Flickr