The College Question

A new report predicts a shortfall in the number of college graduates needed by employers in 2018. But many companies may be overemphasizing the value of college degrees at the expense of other forms of training, such as apprenticeships.

By Andrew R. McIlvaine

The number of jobs requiring at least a two-year associate's degree will continue to grow, with employers needing 22 million new workers with postsecondary degrees by 2018. However, the available workers with postsecondary degrees will fall short of that number by 3 million, according to the Georgetown University Center on Education and the Workforce.

"America needs more workers with college degrees, certificates and industry certification," says Anthony P. Carnevale, the Center's director. "If we don't address this need now, millions of jobs could go offshore."

According to the report , the economy won't start producing new jobs in any substantial numbers until next year, with the economy making up for the jobs lost during the recession by 2015. But by 2018, when the Center predicts that 63 percent of all jobs will require at least some postsecondary education, the nation's employers will be faced with a deficit of properly educated workers, according to the report.

Service industries will present the biggest demand for workers with more than a high school diploma, according to the report, with 75 percent to 90 percent of the jobs in industries such as information services, healthcare, finance, government services and education requiring some form of postsecondary education or training.

Others find the prediction of a looming shortfall of college grads dubious.

"I'm very skeptical -- in fact, I think we're going to have the opposite problem: too many college grads who can't find jobs," says Richard K. Vedder, an economics professor at Ohio University in Athens, Ohio and founder of the Center for College Affordability and Productivity in Washington.

Although skills-intensive industries such as life sciences are expected to grow substantially in the coming years, he says, the number of highly specialized jobs they'll generate will still be very small compared to the overall economy. Instead, jobs such as home healthcare aide, truck driver and retail worker will be among the fastest-growing occupations, according to the U.S. Bureau of Labor Statistics.

Indeed, of the 30 jobs projected to grow at the fastest rate over the next decade in the United States, only seven typically require a bachelor's degree, according to the BLS.

Carnevale is skeptical of the BLS' accuracy, however. He says the agency's projections for jobs that required postsecondary degrees for the period between 1998 and 2008 fell short by 47 percent.

He and his research team based their projections partly on the relative rise in wages for college graduates during the past 30 years. "Since the 1970s, we've quadrupled the number of people who go to college, and yet the demand still outstrips the supply," he says. "The wage gap between people with just a high school diploma and those with at least some college has continued to grow, which proves there's still a scarcity of such people relative to demand."

However, many employers require college degrees for jobs that once required only a high school diploma, says Vedder. He cites the Supreme Court's ruling in Griggs v. Duke Power in 1971, which put restrictions on the use of aptitude tests for employment decisions, as a big reason for this.

"Ever since Griggs, employers have shied away from aptitude testing," he says. "Instead, they look for credentials provided by outside institutions, such as colleges. It's led to employers overemphasizing the importance of a college degree."

Vedder and Robert I. Lerman, professor of economics at American University in Washington, both agree that companies need to offer more apprenticeships and joint training programs with community colleges as alternatives to baccalaureate and associate's degrees.

"The policymaking community in this country is too focused on college," says Lerman. "We have a lockstep approach in which students are pushed into going to college regardless of whether they're ready."

Indeed, according to the U.S. Dept of Education, only half the students who begin a four-year bachelor's degree program in the fall of 2006 will earn that degree within six years. And they'll be accruing more debt than ever: The average debt for college graduates has gone up by 50 percent within the past 10 years, according to the Project on Student Debt.

In contrast, students who complete apprenticeships gain valuable skills without going into debt, says Lerman. Countries such as Germany, in which nearly 70 percent of high-school graduates enter apprenticeships, have retained their manufacturing bases and have much lower youth unemployment rates than countries that lack strong apprenticeship programs, he says.

Apprenticeships suffer from a misperception among American business leaders that they're primarily union-sponsored, says Lerman. South Carolina -- hardly a union bastion -- has greatly expanded apprenticeship programs at companies throughout the state through its Apprenticeship Carolina program, he says. "Most sponsors of apprenticeship programs are non-union."

Moreover, apprenticeships aren't just for the manufacturing sector, he says. "Many white-collar positions, such as computer network administrator, can be taught via an apprenticeship," says Lerman.

Regardless of whether workers obtain their skills and knowledge via college or apprenticeships, their services will cost employers a premium by 2018, says Carnevale.

"Skilled workers will be in short supply," he says, "and for them it will be a seller's market."