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The new labor market: No bachelor’s required?

More workers without degrees are landing jobs they’d have been shut out of before. Will it last?

Troy Groom, of Hyattsville, Maryland, was browsing social media this spring when he read something that made him perk up: Gov. Larry Hogan announced in March that the state government would strip bachelor’s degree requirements from thousands of job listings.

Groom, who was once enrolled at Bowie State University, left college when his first daughter was born. That daughter now has a college diploma. Groom still does not. But he had gained experience and credentials: a two-decade rise in retail from Giant cashier to CVS store manager, and a suite of computer networking certificates that led him to three years of information technology contracting gigs.

When Groom interviewed for his first IT job, he heard the dispiriting sentence that trips up so many careers: “I’m looking for someone with a bachelor’s degree.” But the hiring manager at that job looked past the unchecked box, and took Groom on as a configuration management analyst.

That was one position, and one hiring manager. Who knew what would happen with the next job search? With Hogan’s move, however, the lack of a degree was no longer an obstacle, at least for state jobs: It was a reason to be recruited.

“It means a lot,” Groom said of Hogan’s announcement. “There are a lot of companies limiting out a lot of talent. You can have a degree and not have the knowledge and skill sets.”

He followed a link to a job site called Stellarworx and applied for two IT positions with the state.

Thanks to a tight labor market, more good jobs are opening up to workers who lack a bachelor’s degree. A month after Maryland’s announcement, Colorado Gov. Jared Polis directed government agencies in his state to embrace hiring workers for skills, not degrees. Private sector employers have been rolling back B.A. requirements too.

While the pandemic labor shortage has prompted more employers to welcome applications from workers without degrees, workforce advocates have been pushing back for years against a surge of so-called degree inflation triggered by the Great Recession.

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When the economy tanked in 2008 and millions of laid-off workers began competing for scarce jobs, employers got pickier about who they hired and increasingly added four-year degree requirements to some “middle-skills” jobs that had frequently been filled by workers without degrees. (Middle-skills jobs, which include positions in fields such as health care, IT, and sales, require some training or education beyond high school, although not necessarily a B.A. — jobs like registered nurse, human resources assistant, or help desk technician.)

Even before COVID hit, advocates for accepting applicants who lack a college degree had found some success persuading employers that it is in their interest, no matter the labor market, to hire workers who have skills but lack a bachelor’s degree.

The increasing availability of good jobs for those without degrees coincides with a growing struggle for postsecondary education. Enrollment, already on a decade-long decline, dropped precipitously during the pandemic, emptying a million seats at two-year and four-year colleges. This convergence — fewer people pursuing diplomas, and more being recruited without one — raises the prospect of young workers putting less stock in obtaining a bachelor’s degree, for so long an unshakable aspiration for Americans of every background.

The lack of the credential has traditionally shut workers out of their desired professions and the wealth accumulation that comes with them. Sixty-two percent of Americans over 25 have no bachelor’s degree, and that number rises to 72 percent for Black adults and 79 percent for Hispanic adults. Any shift in the workforce to the advantage of workers without degrees carries obvious implications for economic mobility and equity.

However wide the door opens for workers without degrees, they won’t get through it without sufficient skills. Their success in the labor market depends upon finding an affordable pathway to develop those skills and the willingness of employers to keep prioritizing skills over degrees, even if a recession upends the job market.

Some workforce observers see reasons to believe employers will keep that door open for workers without degrees, even if the economy sends more college graduates their way.

When the Hogan administration heard how hard it was becoming for agencies to fill open positions, it partnered with a nonprofit organization called Opportunity@Work to recruit workers like Groom. Opportunity@Work calls such workers “STARs,” because they are Skilled Through Alternative Routes, like workforce training, community college courses and job experience.

Opportunity@Work connects STARs to training programs and works with employers to develop job listings for its Stellarworx employment website. The organization claims 70 million Americans are STARs. Maryland labor secretary Tiffany Robinson estimated that 47 percent of Maryland workers are, too.

“We had a flood of applications on the first tranche of postings,” Robinson said. She estimated that more than half of the state government’s 38,000 jobs could eventually substitute experience for a four-year degree.

Businesses like Google, IBM, and Accenture have also made high-profile moves to boost skills-based hiring and remove bachelor’s degree requirements. In a report on the “emerging degree reset” released earlier this year, the labor analytics firm Burning Glass found that just 9 percent of Accenture’s “computer support specialist” listings required a bachelor’s in 2021, down from 46 percent in 2017.

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During the pandemic, employers ditched degree requirements at an even faster pace. In January, the Federal Reserve Bank of Philadelphia examined a subset of middle-skill jobs and found that the proportion of job listings asking for a college degree dropped 4 percent between the first quarter of 2020 and the second quarter of 2021. In the Philly Fed’s estimation, that means 700,000 more of what it calls “opportunity jobs” — positions open to those lacking degrees that pay more than the U.S. yearly median of $36,660.

Employers could slap bachelor’s requirements on these kinds of listings again, if job seekers come flooding back. But Joseph Fuller, a professor of management at Harvard Business School, believes many of them likely won’t.

The Burning Glass “degree reset” report, which Fuller co-wrote, found that between 2017 and 2019, the number of positions requiring a B.A. dropped by more than 5 percent in roughly half of all middle-skills occupations. Though the labor market was already tightening, the report found that only a quarter of these changes were “cyclical,” or attributable to the labor market. Sixty-three percent of the changes were deemed “potentially permanent” shifts in hiring practices.

The trend toward degree inflation, the report concluded, has been reversed. If it sticks, Fuller and his co-authors believe 1.4 million more jobs could become available to workers lacking a B.A. between now and 2027.

Although degree requirements may disappear for many jobs, workers will still need some alternative way to build the skills required to get hired without a college degree, whether through workforce training, on-the-job experience, or the kind of short-term education and certifications provided by community colleges and other institutions. Many job seekers never get the chance to access these pathways because they are stuck in low-wage, low-skill jobs and, as Fuller put it, “can’t afford not to work.”

“They’re inhibited to seek training because they can’t give up what they’re doing now,” Fuller said.

Fuller points to the work of Social Finance, a nonprofit funded by “impact investors” that helps workers train without going under financially. Social Finance provides wraparound services such as an emergency aid fund for child care, rent or transportation. Workers pay back the cost of their training only when they reach a certain salary level.

In February, Google announced a $100 million partnership with Social Finance to help as many as 20,000 workers earn IT certificates. Social Finance will draw on nonprofit workforce groups such as YearUp and Merit America to train participants and counsel them toward employment. Merit America co-CEO Rebecca Taber Staehelin said these kinds of programs can help companies walk the walk after years of talk about diversity, equity and inclusion.

“The sad truth is, when you filter candidates based on college degrees, you’re closing out the vast majority of Black and Latino talent in the country,” Taber Staehelin said.Halid Hamadi, a 28-year-old Washington, D.C., resident, stumbled upon a Merit America IT training program on Indeed.com. “I was like, ‘Okay, that’s too good to be true,’” he said. “Because in bold they said, ‘We’re looking for minorities that don’t have a bachelor’s degree.”

Hamadi had withdrawn from Penn State University in 2016 for financial reasons and taken a minimum wage retail job back home in Montgomery County, Maryland. Merit America provided a stipend that helped him afford a bus pass to attend job counseling sessions while he completed a 13-week Coursera program to earn a Google IT certification. His first job was a $45,000 “tier one” tech support position with a health care software developer. Two promotions later, he was an integration engineer making $75,000.

Another Merit America participant, 32-year-old Amber Wallace Dekie of Manassas, Virginia, graduated from high school in 2008, just in time to hear the housing bubble pop. She chose a comparatively recession-resistant industry to work in: health care.

“I realized I’d find more work; it felt like there was job security in it,” she said. “I found out later they don’t pay very well — the lower-level jobs, at least.”

She worked as a nurse’s aide, clinical technician and pharmacy assistant, never earning more than $14 per hour. Then her boyfriend landed a good IT job, and she started looking for her own. Like Hamadi, she stumbled onto Merit America’s program browsing IT listings on Indeed.com, applied, and completed the training. With her new Google certification, she went to Stellarworx and found a $22-per-hour help desk job.

A bachelor’s degree still holds prestige as a ticket to the middle class, but its value has received increasing scrutiny. In the last several years, rising tuition has been reason enough to reconsider an investment in postsecondary education: Americans owe more than $1.7 trillion in student loans. When Gallup asked Americans in 2019 about the value of college degrees, just 51 percent answered “very important,” down from 70 percent in 2013. The pandemic has driven down four-year college enrollment by 4 percent and community college enrollment by 17 percent since spring 2020.

Whether even more Americans opt out of four-year college will depend in part on the quality of jobs available without that diploma. Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce, said that a decade from now, 4 out of 10 jobs will be reserved for people with at least a bachelor’s degree, and 3 out of 10 for people who lack the degree but do have some training or postsecondary education.

“Where the rubber hits the road is: Are they good jobs or not?” said Carnevale. For four-year degree holders, 75 percent of jobs will be good — which he defined as paying at least $40,000 per year by the time the worker reaches age 40. For those with no bachelor’s degree but more than a high school diploma, the share of good jobs drops to 40 percent. In other words, not everyone without a B.A. will be able to land a good job.

But, Carnevale said, “If you’re careful and make good choices, you don’t need a B.A.”

On Capitol Hill, where lawmakers are worrying about America’s competitiveness, Carnevale perceives a turn from higher education to workforce training. One bill currently in conference committee would make some short-term training programs eligible for federal Pell Grant funding, as long as their graduates demonstrate a 20 percent wage increase.

Still, the workers most likely to thrive, Carnevale said, will have accumulated both the general education and flexibility that come with a bachelor’s coupled withsome specialized training. Specialization alone can pay off in the short-term: Carnevale said that 30 percent of two-year degree holders earn more than those with four-year degrees. But a bachelor’s degree still pays off in the long run through a significant advantage in lifetime earnings.

“The American B.A. is superior in the postindustrial world, and the reason appears to be that it makes people more adaptable over time. In 20 to 30 years, there’s something of a recovery in terms of earnings power,” Carnevale said.

In other words, a B.A. in, say, the humanities might get workers off to a slow start. “But a substantial share [of workers] 20 years out will be fine,” Carnevale said. “If you get a certificate in HVAC, 20 years out you’ll fall back in the pack.”

Even if more young people recognize the short-term gains they can make by plunging into the workforce without a college degree, that degree has retained its potency as a symbol of economic advancement. “I can’t tell you there’s one student I’ve ever talked to that said, ‘What’s the point of getting a college degree?’” said Maureen Ponce, president-elect of the Maryland School Counselor Association. “I’m Latina. For Latino families, it’s about, ‘I never had a chance to get a college degree. If my kids can get one, they’re gonna get one.’”

Counselors like Ponce work under the banner of “college and career readiness,” but any focus on career at the expense of college still gets pushback from families — and not just from wealthy families with Ivy League dreams.

“The communities that don’t have the college background, they still want that for their kids,” Ponce said. “They’ve been told that’s the American dream.”

More workers may be accessing skills and finding good jobs without degrees, but not all of them have foreclosed on the idea of returning to school. Some, like Virginia resident and Merit America alumnus Wallace Dekie, worry they’ll hit a career ceiling without a college diploma, despite the gains they’ve made with alternative qualifications. Wallace Dekie knows the benefits of training — after moving into IT and developing specialized skills, she makes twice what she made as a nurse’s aide seven years ago — but she understands the power of the four-year degree.

“Certificates are huge in IT. A certificate will get you in the door. But if you’re gonna go anywhere, you need that [B.A.] in addition,” she said.

She’s currently looking into an online bachelor’s program at Western Governors University, an online-only private institution.

The strategy of earning certificates in the IT field has also worked out well so far for Groom, the former cashier, even if it depended on the good luck of having a hiring manager who looked past his lack of a college diploma. Groom has already earned six figures in one year. The Hogan administration’s move to hire for skills rather than degrees has opened another potential career path for him, and he hopes landing an IT job with the government will give him an entrée to a career in cyber security.

Nonetheless, like Wallace Dekie, he’s hoping to bolster his career prospects even further.

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Nearly three decades after leaving college the first time, he has enrolled at the University of Maryland Baltimore County to work toward his bachelor’s degree again.

This story about education requirements was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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Google is one of many that’s dropping bachelor’s degree requirements for certain jobs.