Apr 27, 2021 - Economy

The college degree barrier to work

Illustration of a man with a briefcase standing in front of a large wall made up of various university degrees.

Illustration: Aïda Amer/Axios

There are millions of Americans who have the skills to get higher-level, higher-paying jobs but aren't considered for those roles because they don't have college degrees.

Why it matters: Companies hire based on credentials, not skills — and that's limiting the economic mobility of millions of skilled workers without degrees and leaving firms with smaller pools of talent.

Among American workers without college degrees are 77 million that do have high school diplomas, according to an analysis by the research and advocacy organization Opportunity@Work, provided exclusively to Axios. 55% of Hispanic workers and 65% of Black workers fall into this pool.

  • And even though as many as 30 million of these workers have the skills to earn more, they're often stuck in lower-wage jobs because of degree requirements, says Byron Auguste, CEO of Opportunity@Work.
  • "It’s an enormous part of our talent pool, and it’s a pool that’s really undervalued to a damaging extent," says Auguste, who also served as deputy director of the National Economic Council in the Obama administration.

For example, someone who has worked as a customer service representative could transition to an IT support specialist with some training and earn tens of thousands more, says Papia Debroy, SVP of insights at Opportunity@Work.

  • Similarly, farmers have the skills to become purchasing managers, and food service managers can become health service managers.

Driving the news: Around 75% of the new jobs that were added to the U.S. economy between 2008 and 2017 required college degrees or higher, but nearly two thirds of the labor force is composed of workers without college degrees.

That's because making higher education a requirement has turned into a quick way for employers to find candidates with soft skills, like management or communication, even though these skills can be acquired elsewhere, per a Harvard Business School study.

  • Case in point: 41% of recent college grads are in roles that don't require college degrees, per the New York Fed.
  • College degree requirements stagnate millions of careers and make the labor market inefficient by keeping qualified people out of higher-level jobs, per the Harvard study.

But, but, but: Workers will face the college degree barrier when trying to climb the corporate ladder.

  • Opportunity@Work's analysis, which looked specifically at Hispanic workers, found that 1 in 4 Hispanic workers with just high school degrees have the skills to make career jumps based on their current occupations, but will be stopped by the degree barrier.

The stakes: During the pandemic, workers without college degrees have disproportionately lost their jobs, and many of those jobs — such as in food service and hospitality — won't come back. Those people will need to find new jobs in new fields, and that will be hard to do unless employers do away with degree requirements where they can.

The bottom line: Says Auguste, "People who have bachelor's degrees and people who don’t has become a major schism in our economy, in our society, and in our politics. And it doesn’t have to be that way."

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