by James A. Bacon
Much of the unemployment in the United States is tied to cyclical economic factors like swings in housing starts and industrial production but some of it stems from a mismatch between the jobs available and the skills of unemployed workers, contends Brookings Institution scholar Jonathan Rothwell in a new article, “Education, Job Openings and Unemployment in Metropolitan America.”
On average, the jobs being created require more education than American workers possess. In an analysis of the nation’s 100 largest metropolitan statistical areas (MSAs), Rothwell also found that the mismatch was more acute in some MSAs than others. Indeed, the Richmond region ranked 72nd out of 100 in his “education gap” index (in which 1st represents the smallest mismatch). Virginia Beach (ranked 40th) and the Washington MSA (4th) fared considerably better.
The mismatch is of more than academic significance. “Metro areas with higher education gaps,” Rothwell writes, “have experienced lower rates of job creation and job openings over the past few years.”
Here is a closer look at the numbers. (Click on links to see regional profiles.)
Richmond MSA: 43.1% of all job openings in January/February 2012 required a bachelor’s degree or higher, compared to 21.8% of unemployed workers and 31.7% of all adults with B.A.s.
Hampton Roads MSA: 39.3% of all job openings required a bachelor’s degree or higher, compared to 15% of unemployed workers and 28.5% of all adults with B.A.s.
Washington MSA: 49.6% of all job openings required a bachelor’s degree or higher, compared to 30.3% of unemployed workers and 46.8% of all adults with B.A.s.
Bacon’s bottom line: To the extent that MSAs with high education gaps, like Richmond, tend to experience lower rates of job creation, Rothwell highlights a problem that needs to be solved. But I also see the gap as an opportunity.
The Richmond region has one of the highest education gaps in the country. But that’s not entirely a bad thing. It means that Richmond-area employers are creating jobs that require a high level of skills and, presumably, would command higher-than-average salaries. Turn the picture around. Would you rather live in a region where the jobs being created required less education? That would be an economy of proverbial hamburger flippers.
An education gap gives people a concrete reason to pursue higher education, even in the face of runaway tuition and fees. The message: The jobs are out there if you make the effort to acquire the skills.
From a public policy perspective, an education gap points the way to a different way of thinking about economic development. Economic development in Virginia is geared primarily to recruiting new businesses to the region, and secondarily to stimulating new business start-ups. Both of those approaches overlook the fact that existing businesses are creating lots of jobs that they can’t fill locally….
Which brings me back to a familiar theme: If the Richmond region (or Hampton Roads, Roanoke, Charlottesville or any other region) wants to stimulate economic development, it needs to create the kind of place where educated people want to move to and, once they get here, want to stay.
What attributes and amenities do educated people look for… other than a great paycheck? That depends significantly upon an individual’s (or family’s) stage of life. Young singles yearn for places where they can meet other young singles. Married couples with children look for good places to raise their kids. That’s basic. But what else?
Rothwell observes a tendency of college graduates to stay in the same state as their university. “Indeed, 70 percent of college graduates live in the same state at their college five years after graduation and 61 percent 10 years after. The share is only slightly less for tech entrepreneurs; 45 percent of the founders of large companies created their business in the same state where they attended school. This is one of the reasons why many of the metro areas with the highest college attainment rates also have large research universities, like Austin, Boulder, San Francisco, Boston, and Madison.”
Richard Florida, of creative class fame, says that educated Americans gravitate toward communities that are open to outsiders and have what he calls “authenticity” in its local culture. That’s all very good, but those concepts are hard to build public policy around. I have seen very little other research done on the subject, and what I have seen is several years old and probably outdated. The fact is, we really don’t know what people look for when they move to a new region. If we want our regions to become magnets for educated and talented workers, we need to find out.
Update: When I went back and re-read Rothwell’s piece, I saw that I missed a key point. America’s problem isn’t an inability to fill the jobs with higher educational requirements, as I suggested by focusing on the need to recruit communities that could recruit and retain educated members of the creative class. The problem is the lack of jobs for people with lower educational attainment. That calls for a different set of remedies than what I called for in my “bottom line” analysis.