A study out today from the nonprofit Brookings Institution in Washington, D.C. looks at the extent to which weakness in education accounts for high jobless rates in metropolitan areas across the country. It turns out that cities with greater shortcomings in education also have greater unemployment. Moreover, areas hardest hit by the housing crisis seem to have some of the biggest gaps between workers’ education levels and the schooling required in advertised job listings.
To make the calculations, Brookings senior research associate Jonathan Rothwell looked at online job postings between 2006 and 2012 and measured the average number of years of education required for the openings in each of 100 metropolitan areas. Then he compared that with data on the average education level of the population in each of those places, to come up with an “education gap,” meaning the percentage difference between the average years of education in job postings and the average years of education in the area.
“Narrowing the education gap is particularly important for improving the long-term health of metropolitan economies,” Rothwell said in a statement. “Metro areas with wide education gaps have higher unemployment, but metro areas with narrow education gaps have lower unemployment, more job creation, and more job openings.”
Some of the biggest education gaps are in cities that have been most severely battered by the housing bust, like Stockton, Calif., Las Vegas and Phoenix. In Stockton, there is nearly a 10% gap between the average education for listed jobs and the average education of the area’s workforce. The unemployment rate in Stockton is 14.5%.
The narrowest education gaps are in places with highly skilled workers, like Raleigh-Cary, N.C. and Washington, D.C., which both have education gaps of two percentage points or less. In Washington, D.C., the education gap is just over 1% and the unemployment rate is 5.3%, while in Raleigh, the education gap is also just over 1% and the unemployment rate is 7.7%.
Rothwell also looked at which cities were most resilient, based on education gap, home prices and industry growth. Pittsburgh ranked first in those measures, in part because housing prices rose 7.3% there since 2006, while housing prices dropped by 15% in the average large metro area, according to the study. The education gap in Pittsburgh is just 3.1% and the unemployment rate is 6.6%. The Pittsburgh economy has been strong because of a growth in education and health care jobs, among the only two sectors that have kept expanding during the recession and beyond, the study says.
Among the least resilient metro areas, according to the study: the California cities of Sacramento, Riverside, Bakersfield, Stockton, Fresno and Modesto. Also the study named Miami-Fort Lauderdale-Pompano Beach the least resilient, given that housing prices there have fallen 44.6% since 2006. In Miami the education gap is 6.8% and the unemployment rate is 8.7%.
One possible contributing factor: Following the Great Recession, many employers have gotten such a flood of applications for open jobs, they have raised the education requirements for many of them, in order to find stronger candidates, figuring that more highly educated workers are easier to train. Also, as longtime workers age out of jobs, employers tend to replace them with more educated people.
The study concludes that in metro areas with higher education gaps, unemployment rates are about two percentage points higher than they would be if there were no education gap. The education gap for the nation as a whole is about five percentage points, according to the study.
The Brookings study underlines a Georgetown University study written about two weeks ago, showing that workers hardest hit by the recession are those with no more than a high school education. The Georgetown study showed that since the recession began in late 2007 until early 2012, those who had no degree beyond a high school diploma lost a total of 5.8 million jobs or 10% of the jobs they had previously held. For those with better educations, there was either no net job loss or a job gain during the same period.
Though college has become increasingly difficult for Americans to afford, these two studies together emphasize the value education can have in the job market. Whether or not it makes sense for employers to require a college degree, they are doing so in increasing numbers. For young people the message remains that it pays to get a college degree.
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